Iberian Minerals Corp.
TSX VENTURE : IZN

Iberian Minerals Corp.

August 27, 2009 09:00 ET

Iberian Minerals Reports Second Quarter 2009 Results

TORONTO, ONTARIO--(Marketwire - Aug. 27, 2009) - Iberian Minerals Corp. (TSX VENTURE:IZN) today announced financial and operating results for the second quarter ended June 30, 2009, with comparative figures for the second quarter ended June 30, 2008. The second 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 $ 45.6 million for Q2 2009, representing a loss per share of $0.15.

Highlights for the Second Quarter Ended June 30, 2009

During the three months ended June 30, 2009:

  • Iberian reported a net loss of $45.61 million for the three months ended June 30, 2009, compared with a net loss of $59.29 million for the corresponding period in 2008.
  • the main reason for the consolidated loss in the current quarter was an unrealized loss on derivative financial instruments of $68.14 million. This loss is a notional loss that must be recorded in accordance with Canadian GAAP. It is not an economic obligation of the Company and it does not estimate future losses to be realized
  • the Company announced the completion of a financing by way of special warrants. The Company issued 76,925,000 Special Warrants for gross proceeds of $40,001,000. Each Special Warrant was exercised into one common share of the Company.
  • the shareholders of the Company approved a special resolution authorizing the re-domiciling of the Company by way of corporate law continuance from being governed by the laws of Canada to those of Switzerland, which continuance was effective on June 17, 2009.

Overview of the Three Months Ended March 31, 2009

During the three months ended June 30, 2009, the Company continued the ramp-up at Aguas Tenidas, and maintained steady state operations at Condestable.

Iberian reported a net loss of $45.61 million for the three months ended June 30, 2009, compared with a net loss of $59.29 million for the corresponding period in 2008. The main reason for the consolidated loss in the current quarter was an unrealized loss on derivative financial instruments of $68.14 million. This loss is a notional loss that must be recorded in accordance with Canadian GAAP. This loss is not an economic obligation of the Company and it does not estimate future losses to be realized. The loss was partially offset by CMC's gross margin of $6.91 million, future tax recovery of $17.11 million and a foreign exchange gain of $4.80 million.

Condestable Mine

The following are the highlights of Condestable for the second quarter of 2009:

- Revenues were approximately $29.73 million.

- Production for the three months ended June 30, 2009 was:

 
ProductionUnitThree months ended
    June 30, 2009
ConcentrateDMT24,309
Contained coppert5,973
Fine goldoz4,414
Fine silveroz59,502
  
  • An average head grade of approximately 1.23% Cu, and a recovery rate of 91%.
  • Operating costs for Q2 (C1 and C3) were US$0.49 and US$1.11 per pound of copper produced (or US$11.96 and US$27.24, respectively, per tonne of ore processed).

As described in Note 3 of the June 30, 2009 unaudited interim consolidated financial statements, the results for the second quarter ended June 30, 2008 have been restated to recognize the future tax asset related to CMC's unrealized losses on its derivative instruments due to a change in Peruvian tax law.

Aguas Tenidas Mine

At Aguas Tenidas, capitalized expenditure for the three months ended March 31, 2009, amounted to approximately $58.05 million, of which $5.55 million was for mining interest, $45.68 million for construction in progress and $6.82 million for machinery and equipment

Aguas Tenidas produced 7,911 tonnes of copper concentrate and 1,912 tonnes of zinc concentrates for revenues of US$8.5 million during the second quarter of 2009. Since the facilities have not achieved commercial production for accounting purposes, all expenses and sales have been capitalized.

Outlook

Iberian continues to expect 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. It is expected to continue to produce copper at similar levels to 2008.

At Aguas Tenidas, as noted, unanticipated events have further negatively affected cash flow, including acquisition of the Insersa underground contractor and continued delay of receipt of the approved government grant. Delays in production due to modifications to the polymetallic circuit, together with on-going ramp-up issues, both of which have been and are being addressed, have also affected the financial condition at MATSA.

While the Company has undertaken to roll forward out of the money hedges to maximize cash in 2009, together with other cash conservation measures, the Company foresees a further potential cash shortfall as a result of the MATSA operation. Management is currently examining all factors relevant to determining the extent of such a shortfall, and is taking all available measures to minimize the amount in issue. Based on current information and assumptions, the indicated cash shortfall to the Company could be in the range of $20 to $30 million. As such, the Company is also actively pursuing non-dilutive external financing options, but there can be no assurance that any financing will be obtained, or the terms on which any financing will be obtained.

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