Iberian Minerals Corp.
TSX VENTURE : IZN

Iberian Minerals Corp.

June 02, 2009 16:30 ET

Iberian Minerals Reports First Quarter 2009 Results

TORONTO, ONTARIO--(Marketwire - June 2, 2009) - Iberian Minerals Corp. (TSX VENTURE:IZN) today announced financial and operating results for the first quarter ended March 31, 2009, with comparative figures for the first quarter ended March 31, 2008. The first quarter 2009 unaudited consolidated financial statements and related notes, along with the Management Discussion and Analysis may be found on www.sedar.com. The Company reported a net loss of $ 60.5 million for Q1 2009, representing a loss per share of $0.24.

Highlights for the first Quarter Ended March 31, 2009

During the three months ended March 31, 2009, the Company and its subsidiaries accomplished the following:

- On January 22, 2009, Compania Minera Condestable S.A. ("CMC"), of which the Company has 98.7% ownership, signed a collective labour agreement for three years with its workers.

- During the first quarter of 2009, CMC received both ISO 14001 and OHSAS 18001 certifications concerning environmental management systems, and occupational health and safety management systems for employees. These qualifications, along with a continuous record of excellent safety, led to the mine recently being chosen as winner of Peru's Annual Safest Mine Award in the underground category.

- Both the copper circuit and polymetallic circuits at Aguas Tenidas project, held by Iberian's wholly owned Spanish subsidiary Minas Aguas Tenidas S.A. ("MATSA"), were put into production.

Overview of the Three Months Ended March 31, 2009

During the three months ended March 31, 2009, the Company was in the final stages of the completion of the paste plant at MATSA. Capitalized expenditure for the three months ended March 31, 2009, amounted to approximately $47.44 million, of which $3.68 million was for mining interest, $39.62 million for construction in progress and $4.13 million for machinery and equipment.

Iberian reported a net loss of $60.49 million for the three months ended March 31, 2009, compared with a net loss of $50.06 million for the corresponding period in 2008. The main factors that contributed to the consolidated loss in the three months ended March 31, 2009: (i) an unrealized loss on derivative instruments of $88.00 million, the majority of which was CMC; (ii) administration costs of $1.62 million; (iii) finance charge of $0.96 million; (iv) convertible debenture interest and accretion of $0.46 million; (v) foreign exchange loss of $1.45 million and (vi) current tax expense of $4.13 million. These were partially offset by CMC's gross margin of $8.03 million and future tax recovery of $27.40 million.

MATSA produced 1,288 tonnes of copper concentrate and 847 tonnes of zinc concentrates for revenues of $3.05 million during the first quarter of 2009. Since the facilities have not achieved commercial production for accounting purposes, all expenses and revenue directly related to MATSA have been capitalized. A total of 830 meters of horizontal development and 459 meters of vertical development were completed during the first quarter of 2009.

The following are the highlights of CMC for the period January 1, 2009 to March 31, 2009:

- Revenues were approximately $31.24 million.

- Production for the three months ended March 31, 2009 was:



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Production Unit Three months ended
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March 31, 2009
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Concentrate DMT 24,339
Contained copper t 6,114
Fine gold oz 4,658
Fine silver oz 61,697
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- The cash operating cost "C3" at CMC is estimated at US$ 1.05 per pound of copper produced. This is computed using all of the cash costs(1) for the Peruvian operations which include total production costs, including mining, processing, site administration and refining, depreciation and amortization, royalties, related head office and interest costs net of by-product credits.

(1) Cash cost is a non-GAAP measure. Non-GAAP measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies. There is no direct comparable GAAP measure to this measure.

- CMC has a recovery rate of approximately 93% and an average copper grade of approximately 1.23%.

- On January 22, 2009, CMC and its workers signed a collective labour agreement for three years.

As described in Note 3 of the March 31, 2009 unaudited interim consolidated financial statements, the results for the first quarter ended March 31, 2008 has been restated to properly recognize the future tax asset related to CMC's unrealized losses on its derivative instruments.

Outlook

Iberian expects a number of challenging quarters ahead as the effects of the global recession play out in the world economy. The Company's operations are subject to the fluctuations in the market prices of copper, zinc and lead and to some extent those of gold and silver.

CMC has been in continuous production since 1998. The outlook for CMC is positive in that it will continue to produce copper at similar levels to 2008. CMC is authorized to process 2.2 million tonnes of ore per year.

Construction activities at MATSA were nearing completion at the end of the first quarter of 2009. The paste fill plant, which will provide cemented paste fill for the underground operations, was the remaining major project to be completed at the end of the first quarter of 2009. It is expected to be completed and commissioned during the second quarter of 2009.

About Iberian Minerals Corp.

Iberian Minerals Corp. is a Canadian-based global base metals company with interests in Spain and Peru. The Condestable Mine located in Peru approximately 90 km south of Lima operates at 2.2 million tonnes per year producing copper concentrates that also have associated silver and gold. The Aguas Tenidas Mine is in the Andalucia region of Spain approximately 110 km north-west of Seville. Ramp-up continues on a 1.7 million tonnes per year underground mine and concentrator that will produce copper, zinc and lead concentrates that also contain gold and silver.

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 annual Management's Discussion and Analysis and Annual Information Form 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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Iberian Minerals Corp.
    Laura Sandilands
    Investor Relations and Corporate Communications
    416-815-8558