Iberian Minerals Reports Q2 Net Income of $25.46 Million

TORONTO, ONTARIO--(Marketwire - Aug. 14, 2012) - Iberian Minerals Corp. (TSX VENTURE:IZN) today announced financial and operating results for the three and six month periods ended June 30, 2012, with comparative figures for the three and six month periods ended June 30, 2011. The condensed interim consolidated financial statements and related notes, and Management Discussion and Analysis may be found on www.sedar.com. Unless stated otherwise, all reported figures are in U.S. dollars. The Company reported net income of $25.46 million for Q2 2012, representing $0.05 per share.

Financial highlights:

Three months ended June 30, 2012

• Recorded net income of $25.46 million or $0.05 per registered share which included:
  
  
  • Sales of $124.25 million and gross gain of $31.40 million;
    
    
  • A realized gain of $4.75 million on commodity hedges (included in sales) which contributed to the gross gain;
    
    
  • An unrealized non-cash gain of $29.08 million on derivative financial instruments outstanding, principally as a result of commodity hedging positions in copper and zinc that were delivered into during the period and were thus retired.
    
    
• Cash flow provided by operations before changes in working capital items was $38.7 million.
  

Six months ended June 30, 2012

• Recorded net income of $13.17 million or $0.03 per registered share which included:
  
  
  • Sales of $210.78 million and gross gain of $37.87 million;
    
    
  • A realized loss of $11.44 million on commodity hedges (included in sales) which partly net off the gross gain;
    
    
  • An unrealized non-cash gain of $13.71 million on derivative financial instruments outstanding, principally as a result of commodity hedging positions in copper and zinc that were delivered into during the period and were thus retired.
    
    
• Cash flow provided by operations before changes in working capital items was $66.03 million.
  

Operational highlights - MATSA:

Three months ended June 30, 2012

• MATSA processed 533,717 tonnes of ores in 2012 versus 466,444 tonnes of ores in 2011 (increase of 67,273 tonnes or 14.4%).
  
  
• Produced 29,091 DMT of copper concentrate (2011 - 28,300 DMT), 15,200 DMT of zinc concentrate (2011 - 15,236 DMT) and 4,614 DMT of lead concentrate (2011 - 5,970 DMT). Contained metal production was 6,941 FMT of copper (2011 - 6,216 FMT), 7,204 FMT of zinc (2011 - 7,307 FMT), 1,037 FMT of lead (2011 - 1,064 FMT) and 256,555 ounces of silver (2011 - 213,806 ounces).
  
  
• The Cash Operating Cost (non-IFRS measure - refer to section 6) was $1.15 per payable pound of copper (2011 - $1.73 per payable pound of copper). Cash Operating cost was substantially reduced in 2012 due to the combined effect of higher payable copper production (6,650 FMT in 2012 versus 5,933 FMT in 2011), lower operating cost realized at Matsa and higher by-product metal production (US$13,46 million in 2012 versus US$11,49 in 2011).
  
  
• During the three months ended June 30, 2012, the Company terminated an agreement with Cadillac Venture Inc. which extinguishes their 90% interest on 14 of MATSA's properties located in the Iberian Pyrite Belt of southern Spain. The consideration for the transaction was CAD$2.50 million. The transaction was accepted by TSX Venture Exchange. As of June 30, 2012, the transaction was paid.
  

Six months ended June 30, 2012

• MATSA processed 1,079,530 tonnes of ore in 2012 versus 980,528 tonnes of ore in 2011 (increase of 99,002 tonnes or 10.1%).
  
  
• Produced 57,196 DMT of copper concentrate (2011 - 55,708 DMT), 35,031 DMT of zinc concentrate (2011 - 32,602 DMT) and 11,321 DMT of lead concentrate (2011 - 16,245 DMT). Contained metal production was 13,288 FMT of copper (2011 - 12,357 FMT), 16,597 FMT of zinc (2011 - 15,774 FMT), 2,861 FMT of lead (2011 - 2,998 DMT) and 529,445 ounces of silver (2011 - 486,068 ounces).
  
  
• The Cash Operating Cost was $1.16 per payable pound of copper (2011 - $1.73 per payable pound of copper). Year-to-date Cash Operating cost was substantially reduced in 2012 due to the combined effect of higher payable production and higher by-product metal production. This improvement has been consistent in the two quarters included in the six months period ended June 30, 2012.
  

Operational - CMC:

Three months ended June 30, 2012

• The average copper ore grade was 0.93% in 2012 versus 1.11% in 2011.
  
  
• CMC processed 626,799 tonnes of ore in 2012 versus 593,290 tonnes of ore in 2011 (increase of 33,509 tonnes or 5.6%).
  
  
• Copper concentrate production in 2012 was 23,093 DMT versus 24,491 DMT in 2011 (decrease of 1,398 DMT or 5.7%).
  
  
• Contained copper production in 2012 was 5,313 FMT versus 5,931 FMT tonnes in the prior year (decrease of 617 FMT or 10.4%).
  
  
• The Cash Operating Cost in 2012 was $1.83 per payable pound of copper versus prior year of $1.08.
  

Six months ended June 30, 2012

• The average copper ore grade was 0.95% in 2012 versus 1.11% in 2011.
  
  
• CMC processed 1,226,102 tonnes of ore in 2012 versus 1,172,028 tonnes of ore in 2011 (increase of 54,074 tonnes or 4.6%).
  
  
• Copper concentrate production in 2012 was 45,666 DMT versus 47,878 DMT in 2011 (decrease of 2,212 DMT or 4.6%).
  
  
• Contained copper production in 2012 was 10,526 FMT versus 11,699 FMT in the prior year (decrease of 1,173 FMT or 10.0%).
  
  
• The Cash Operating Cost in 2012 was $1.77 per payable pound of copper versus prior year of $1.09.
  

Summarized Financial Results

The following table presents a summarized Statement of Operations for the three and six months ended June 30, 2012 with comparatives for the three and six months ended June 30, 2011.

		Three months ended June 30,						Six months ended June 30,
(thousands of U.S. Dollars)		2012			2011			2012			2011
		$			$			$			$
Gross sales		119,502			146,108			222,218			241,976
Realized gains on derivative financial instruments held for trading		4,752			(59,965	)		(11,436	)		(118,604	)
Sales		124,254			86,142			210,782			123,372
Costs and expenses of mining operations		92,885			93,504			172,912			153,305
Gross gain / (loss)		31,369			(7,362	)		37,870			(29,933	)
Expenses
Administrative expenses and other		13,744			1,625			22,547			3,071
Foreign exchange (gain) loss		(1,125	)		22			1,385			3,163
Contingent consideration fair value		-			-			-			-
Unrealized gain on derivative instruments		(29,079	)		(65,362	)		(13,706	)		(128,440	)
Total expenses (other income)		(16,460	)		(63,715	)		10,226			(122,206	)
Operating income		47,829			56,353			27,644			92,273
Net finance costs		867			2,042			1,840			8,273
Income before taxation		46,962			54,311			25,804			84,000
Current income tax expense		4,749			238			3,730			1,081
Future income tax expense		16,758			6,277			8,901			4,961
Net income		25,455			47,796			13,173			77,958
Basic earnings per share ($)		0.05			0.13			0.03			0.21
Diluted earnings per share ($)		0.05			0.12			0.03			0.20

Key operating statistics
CMC:
	CMC operating statistics
						Three months						Six months
	Periods ended June 30,		Unit			2012			2011			2012			2011
	Ore mined		t			641,691			591,530			1,273,982			1,179,485
	Ore processed		t			626,799			593,290			1,226,102			1,172,028
	Copper ore grade		%			0.93			1.11			0.95			1.11
	Concentrate grade		%			23			24			23			24
	Copper recovery rate		%			90			90			90			90
	Copper concentrate		DMT			23,093			24,491			45,666			47,878
	Copper contained in concentrate		FMT			5,313			5,931			10,526			11,699
	Gold contained in concentrate		oz			3,251			3,626			6,201			7,031
	Silver contained in concentrate		oz			69,822			83,424			146,182			161,264
	Payable copper contained in concentrate		FMT			5,057			5,658			10,029			11,164
	Payable gold contained in concentrate		oz			2,943			3,283			5,592			6,366
	Payable silver contained in concentrate		oz			68,605			74,706			131,125			144,412
	Cash Operating Cost per lb of payable copper		USD		$	1.83		$	1.08		$	1.77		$	1.09

MATSA:
	MATSA operating statistics
					Three months				Six months
	Periods ended June 30,		Unit		2012		2011		2012		2011
	Copper ore
	Ore mined		t		269,243		316,274		552,469		620,961
	Ore processed		t		277,744		287,355		554,994		593,103
	Copper ore grade		%		1.95		2.23		2.05		2.21
	Concentrate grade		%		24		22		23		22
	Copper recovery rate		%		85		85		86		86
	Copper concentrate		DMT		19,605		24,854		42,297		50,609
	Copper contained in concentrate		FMT		4,615		5,439		9,710		11,231
	Silver contained in concentrate		oz		91,876		76,500		178,746		155,200
	Payable copper contained in concentrate		FMT		4,419		5,191		9,287		10,725
	Payable silver contained in concentrate		oz		72,967		52,505		137,950		106,416
	Polymetallic ore
	Ore mined		t		259,911		200,377		523,707		414,557
	Ore processed		t		255,973		179,089		524,536		387,424
	Zinc ore grade		%		4.05		5.86		4.49		5.91
	Zinc concentrate grade		%		47		48		47		48
	Zinc recovery rate		%		70		70		71		69
	Copper ore grade		%		1.35		1.09		1.17		1.05
	Copper concentrate grade		%		25		23		24		22
	Copper recovery rate		%		68		40		68		28
	Lead ore grade		%		1.17		1.73		1.33		2
	Lead concentrate grade		%		22		18		25		19
	Lead recovery rate		%		34		34		40		43
	Zinc concentrate		DMT		15,200		15,236		35,031		32,602
	Copper concentrate		DMT		9,486		3,446		14,899		5,099
	Lead concentrate		DMT		4,614		5,970		11,321		16,245
	Zinc contained in concentrate		FMT		7,204		7,307		16,597		15,774
	Copper contained in concentrate		FMT		2,327		777		3,578		1,126
	Lead contained in concentrate		FMT		1,037		1,064		2,861		2,998
	Silver contained in concentrate		oz		164,679		137,306		350,699		330,868
	Payable zinc contained in concentrate		FMT		5,988		6,088		13,795		13,163
	Payable copper contained in concentrate		FMT		2,232		743		3,429		1,075
	Payable lead contained in concentrate		FMT		899		884		2,521		2,510
	Payable silver contained in concentrate		oz		102,902		80,707		211,492		205,362
	Cash Operating Cost per lb of payable copper		USD		1.15		1.73		1.16		1.73

About Iberian Minerals Corp.

Iberian Minerals Corp. is a Canadian listed global base metals company with interests in Spain and Peru. The Condestable Mine, located in Peru approximately 90 km south of Lima operates at 2.4 million tonnes per year producing copper, and associated silver and gold in a concentrate. The Aguas Tenidas Mine is in the Andalucia region of Spain approximately 110 km north-west of Seville and operates a 2.2 million tonnes per year underground mine and concentrator that produces copper, zinc and lead concentrates that also contain gold and silver.

Note 1 - The Cash Operating Cost per pound of payable copper is a non-IFRS performance measure. It includes cash operating costs, including treatment and refining charges ("TC/RC"), freight and distribution costs, and is net of by-product metal credits (zinc, gold and silver). The Cash Operating Cost per pound of payable copper indicator is consistent with the widely accepted industry standard established by Brook Hunt and is also known as the C1 cash cost.

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", "expect", "project", "intend", "believe", "anticipate", "estimate", and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward looking information may include, but is not limited to, statements with respect to the future financial or operating performances of the Corporation, its subsidiaries and their respective projects, the timing and amount of estimated future production, estimated costs of future production, capital, operating and exploration expenditures, the future price of copper, gold and zinc, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the costs and timing of future exploration, requirements for additional capital, government regulation of exploration, development and mining operations, environmental risks, reclamation and rehabilitation expenses, title disputes or claims, and limitations of insurance coverage. 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. Many of these assumptions are based on factors and events that are not within the control of the Corporation 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 section entitled "Risk Factors" in the Corporation's annual information form dated March 29, 2010. Although the Corporation 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. The Corporation 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.