Iberian Minerals Corp.
TSX VENTURE : IZN

Iberian Minerals Corp.

November 18, 2008 09:02 ET

Iberian Minerals Corp. Reports Third Quarter 2008 Results

TORONTO, ONTARIO--(Marketwire - Nov. 18, 2008) - Iberian Minerals Corp. ("Iberian") (TSX VENTURE:IZN) announces the release of financial results for the third quarter of 2008. A link to the Company's interim consolidated financial statements for the three and nine month periods ended September 30, 2008 and 2007 and related Management's Discussion and Analysis is provided at the end of this release. The Company prepares and files its interim consolidated financial statements in accordance with Canadian generally accepted accounting principles ("GAAP"). The currency referred to in this document is the Canadian dollar, all holdings in foreign currencies by Iberian or its subsidiaries have been converted to Canadian dollars in accordance with foreign currency translation accounting as disclosed in Note 2 (c) of the September 30, 2008 unaudited interim consolidated financial statements.

Highlights for the nine months ended September 30, 2008

1. For the three months ended September 30, 2008, the Company reported a net income before taxes in the amount of $225.60 million. The revenue for the three months was $27.50 million and costs of expenses of mining operations were $19.04 million, this resulted in a gross margin of $8.46 million. The main factor that contributed to the consolidated net income in the three months ended September 30, 2008 was an unrealized gain on derivative financial instruments of $225.93 million.

2. For the nine months ended September 30, 2008, the Company reported a net income before taxes in the amount of $94.64 million. The revenue for the nine months was $75.47 million and costs of expenses of mining operations were $47.24 million, this resulted in a gross margin of $28.23 million. The main factor that contributed to the consolidated net income in the nine months ended September 30, 2008 was an unrealized gain on derivative financial instruments of $106.48 million.

On November 5, 2008, pursuant to a tender offer made to the minority shareholders of CMC, the Company paid approximately US$9.19 million for 2,927,723 shares of CMC at a price of New soles 9.67 (approximately US$ 3.13) per share, This price was established in accordance with the requirements of the Lima Stock Exchange and the Peruvian securities authorities. Trafigura provided a bridge loan to facilitate the completion of this transaction. As a result of this acquisition, the Company now owns 42,404,752 shares of CMC (98.73%) with 546,565 outstanding as minority shares. On November 6, 2008, the shares of CMC were delisted from the Lima Stock exchange, resulting in CMC becoming a private company.

During the nine months ended September 30, 2008, the Company and its subsidiaries accomplished the following:

- Acquired approximately 92% of Compania Minera Condestable S.A. ("CMC" or "Condestable") effective January 31, 2008. As a result of this acquisition, Iberian became a producing company.

- Condestable raised a US$ 70.00 million loan facility which was used to fund the construction at the Minas Aguas Tenidas project ("MATSA").

- Completed a US$ 210.00 million project finance facility to fund the construction at the Minas Aguas Tenidas project. To September 30, 2008 a total of US$ 109.91 million has been drawn down.

- Completed the hedging requirements of the US$ 210.00 million facility. These hedges were completed on June 24, 2008.

During the nine months of 2008, Iberian continued construction and development of the Aguas Tenidas project, held by Iberian's wholly owned Spanish subsidiary Minas Aguas Tenidas S.A. ("MATSA") and also completed, (i) the acquisition of Compania Minera Condestable S.A. ("CMC" or "Condestable"), an operating copper producing mine, (effective January 31, 2008), (ii) arranged a US$ 70.00 million syndicated loan with Societe Generale as the lead lender. This loan was fully advanced on May 21, 2008. The loan is repayable quarterly in equal amounts of US$ 6,363,636 starting August 29, 2008 until fully repaid on February 28, 2011. The loan bears interest at three months Libor plus 2.25%.The proceeds of this loan were used to fund construction at the Aguas Tenidas Project (iii) On June 24, 2008, completed a US $210.00 million Project Finance Facility (the "Facility") for the Company's Aguas Tenidas Project in Spain. The lead lenders are Investec Bank (UK) PLC, BNP Paribas and Societe Generale. The Facility comprises of three parts: US$ 170.00 million as a term facility; US$ 10.00 million as a convertible loan; and US$ 30.00 million as a cost overrun facility. This Facility is guaranteed by Iberian until the completion date as defined in the Facility. Note 9 (d) of the September 30, 2008 unaudited interim consolidated financial statements detail the terms and repayment schedule.

For the three months ended September 30, 2008, the Company reported a net income before taxes in the amount of $225.60 million. The revenue for the three months was $27.50 million and costs of expenses of mining operations were $19.04 million, this resulted in a gross margin of $8.46 million. The main factors that contributed to the consolidated net income in the three months ended September 30, 2008 were an unrealized gain on derivative financial instruments of $225.93 million, a foreign exchange gain of $5.76 million and interest income of $0.05 million. These were partly offset by: (i) amortization of the mining interest gross up of $12.24 million (see Note 5 and 7 of the September 30, 2008 unaudited interim consolidated financial statements); (ii) administration costs of $1.05 million; (iii) Condestable's employee legal profit participation future benefits of $0.69 million; and (iv) finance charges of $0.88 million.

For the nine months ended September 30, 2008, the Company reported a net income before taxes in the amount of $94.64 million. The revenue for the nine months was $75.47 million and costs of expenses of mining operations were $47.24 million, this resulted in a gross margin of $28.23 million. The main factors that contributed to the consolidated net income in the nine months ended September 30, 2008 were an unrealized gain on derivative financial instruments of $106.48 million, a foreign exchange gain of $0.71 million and interest income of $0.80 million. These were partly offset by: (i) amortization of the mining interest gross up of $32.64 million (see Note 5 and 7 of the September 30, 2008 unaudited interim consolidated financial statements); (ii) administration costs of $3.55 million; (iii) Condestable's employee legal profit participation future benefits of $2.29 million; and (iv) finance charges of $1.67 million.

The Company continued construction at its Minas Aguas Tenidas project in Spain. For the nine months of 2008, the Company spent approximately $167.82 million on the construction of the mine and plant facilities.

To view the Management's Discussion and Analysis, please click the following link:

http://media3.marketwire.com/docs/IberianMDAQ3.pdf

To view the Financial Statements, please click the following link:

http://media3.marketwire.com/docs/INTERIMq3Iberian.pdf

About Iberian Minerals Corp.

Iberian Minerals Corp. is a Canadian-based global copper and zinc company with developing and producing interests in Spain and Peru. The Company operates the 6,000 tonnes per day Condestable mine in Peru approximately 90 km south of Lima that produces copper and associated silver and gold in a concentrate. The Aguas Tenidas mine is a major copper-zinc project in the Iberian Pyrite Belt in Andalucia region of Spain approximately 110 km west of Seville. Construction is nearing completion on a 1.7 million tonne per annum underground mine and concentrator that will produce copper and zinc concentrates that also contain gold, silver and lead. Iberian Minerals Corp. is well-funded with a strong, experienced management team and a significant partner in its largest shareholder, Trafigura Beheer B.V.

This press release does not constitute an offer of the securities in the Unites States, Canada or elsewhere. The securities of Iberian have not been registered under the United States Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States or to U.S. persons unless registered or exempt there from.

FORWARD LOOKING STATEMENTS:

This news release contains certain "forward-looking statements" and "forward-looking information" under applicable securities laws. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan", "except", "project", "intend", "believe", "anticipate", "estimate", and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Assumptions upon which such forward-looking statements are based included that all required third party regulatory and governmental approvals will be obtained. Many of these assumptions are based on factors and events that are not within the control of Iberian and there is no assurance they will prove to be correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions and other risk factors discussed or referred to in the management information circular of Iberian dated November 20, 2007 and in the annual Management's Discussion and Analysis for Iberian filed with the applicable securities regulatory authorities and available at www.sedar.com. Although Iberian has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Iberian undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • Iberian Minerals Corp.
    Victoria Vargas
    Vice President Investor Relations & Corporate Communications
    (416) 815-8558