Ivernia Inc.
TSX : IVW

Ivernia Inc.

November 14, 2006 06:00 ET

Ivernia Inc. Reports Third Quarter 2006 Financial Results

TORONTO, ONTARIO--(CCNMatthews - Nov. 14, 2006) -

Higher Lead Prices, Production and Sales Improve Earnings and Operating Cash Flow; Optimization Projects Delivering on Expectations

All Dollar Amounts are in U.S. Dollars Unless Otherwise Noted

Ivernia Inc. ("Ivernia" or the "Company") (TSX:IVW) today reported net income of $1.2 million, or $0.01 per common share, for the third quarter of 2006. The Company generated $4.6 million of operating income and $4.4 million of cash from operating activities, before changes in working capital. Results for the quarter benefited from higher lead prices, production and sales of lead concentrate compared to the preceding second quarter.

THIRD QUARTER HIGHLIGHTS

- Recorded revenue of $20.0 million from the sale of 14,000 tonnes of lead metal in concentrate

- Completed the commissioning and started regular operations of the secondary ball mill which is delivering on design expectations

- Produced 17,200 tonnes of lead metal in concentrate; the highest quarterly production to date and over 30% ahead of the second quarter reflecting the positive impact of the secondary ball mill on operations

- Began construction and installation of the gas pipeline; scheduled for completion in the first quarter of 2007

- Completed preliminary design work for installation of the Metso pressure filter; project on schedule for installation in the second quarter of 2007

Commentary

"This was an important quarter for Ivernia and I am pleased with the production and operating results," commented Alan De'ath, President and CEO.

"The operation of the new ball mill has, as planned, provided a major step change in our milling capacity which has resulted in the Company's highest quarterly production to date. We have continued to build on this transition to a higher operating platform in October and November. The production performance in those six weeks, of 8,500 tonnes of lead metal in concentrate, indicates we are on track for another strong quarterly production performance in our ramp-up, despite a 7-day maintenance shutdown in October."

"I fully expect the benefit of our higher production levels now being achieved to start to flow through to stronger financial results over the next three quarters as our shipping and sales schedule increases and we begin to monetize our currently high lead concentrate inventories. As a first step, we have currently scheduled fourth quarter sales of approximately 20,000 tonnes of lead metal in concentrate as we start to run down those inventories."

"The positive developments in the lead industry were also very reassuring with lead prices increasing throughout the quarter triggered by strong demand, inventory draw-downs and the Chinese government's removal of the tax rebate on lead exports. Furthermore, consumption, especially in China, continues to grow at a very strong pace to support the increase in vehicle production and infrastructure development. So far during the fourth quarter, lead prices have surged forward to new record highs in the $0.70 to $0.80 per pound range."

"We believe, as we did earlier in the year when lead was trading at low levels, that lead's strong near-term fundamentals will come to the fore allowing it to participate more fully in the base metals rally. Our team sees the unprecedented growth in China and the developing world continuing for some time yet driving and supporting demand above historical levels. We will continue our work to ensure that Ivernia is well positioned to capitalize and benefit from these strong fundamentals."



Financial and Operating Summary

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($ thousands, except earnings per Three months Nine months
share) ended ended
September 30, September 30,
2006 2006
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Unaudited
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Revenue 20,018 50,129
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Operating income 4,593 6,734
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Income/(loss) 1,214 (973)
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Basic earnings/(loss) per share $0.01 $(0.01)
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Cash flow from operating activities
before changes in working capital 4,393 6,714
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Changes in working capital (3,865) (3,792)
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(thousands of tonnes, except percentages)
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Ore mined 297 796
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Ore milled 302 739
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Average head grade 7.6% 8.0%
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Recovery 74.9% 75.9%
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Concentrate produced 27.1 70.1
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Lead metal in concentrate produced 17.2 44.7
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Lead metal in concentrate sold 14.0 41.2
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Revenue for the quarter benefited from the strengthening lead price, increasing over 54% from the preceding second quarter. The Company realized an average price of $0.68 per pound on the sale of 14,000 tonnes of lead metal in concentrate. The comparable average realized price in the second quarter was $0.46 per pound.

Production of 17,200 tonnes of lead metal in concentrate was the Company's highest quarterly production since the start-up of its wholly-owned Magellan lead mine in the fourth quarter of 2005. The performance also exceeded our forecast by almost 15%.

During the quarter, the Company's second key optimization project, the secondary ball mill, was successfully commissioned and brought into operation. In the 43-day period following commissioning to September 30, mill throughput averaged 182 tonnes per operating hour and provided an early indication of Magellan's new operational capability. This step change in performance is a 52% improvement when compared to the average January to July performance that preceded the start of commissioning of the secondary ball mill. The target steady-state throughput rate has been set at approximately 180 tonnes per operating hour. The new mill capacity is expected to complement the expanded filtering capacity, which will be provided by the new Metso pressure filter project currently underway and due to be commissioned in the second quarter of 2007.

Optimization Projects Update

Construction of the 35-kilometre gas pipeline was started towards the end of the quarter. The project is on track to be operational in the first quarter of 2007. Conversion from diesel to natural gas will reduce Ivernia's operating cost and exposure to the volatile oil markets and minimize the potential for energy-supply disruptions. The estimated capital investment for the project is approximately $7 million.

Preliminary design work for the installation of the new Metso pressure filter has been completed. The filter is on schedule for delivery in the first quarter of 2007 and completion of installation and commissioning in the following quarter. The new filter will increase filtering capacity to a maximum of 125,000 tonnes per annum of lead metal in concentrate, which is comfortably beyond current planned production levels. It should also enable the operation to consistently achieve transportable moisture levels while maintaining the current non-dusting nature of the concentrate, eliminate the use of the temporary solar drying pad and reduce operating costs and working capital requirements. The estimated capital investment for this project is approximately $5 million.

Exploration Program

Ivernia's 2006 exploration program is focused on tenements both in areas adjacent to the Magellan mine and in the surrounding regions. The current year's objective is to rationalize the existing licenses and pursue new exploration or acquisition opportunities.

Drilling to date has met the program's objectives and yielded a mixture of results that are summarized below:

The program consisted of 299 drill holes for 9,841 metres with approximately 50% on mature prospects, 20% on near-mine areas and the remaining 30% on scout drilling.

The Pizarro prospect returned some encouraging results with intersections of shallow, high-grade mineralization. Further closely-spaced rotary collar drilling is planned to better define the core zones and outer limits of the main mineralization to enable the completion of a reliable resource estimate.

At the Magellan East prospect, follow-up infill drilling is planned for a limited number of targets.

Regional drilling at the Yandil tenement led to a downgrade of the prospect after no significant results were returned.

In 2007, the program will be focused on further defining resources and areas of mineralization in areas adjacent to the Magellan mine and existing tenements, expanding and exploring regional ground holdings and expanding the program to include suitable opportunities in Australia and overseas.

2006 Outlook

The fourth quarter and full year 2006 results are expected to be positively impacted by several fundamental changes to the Company's operating platform. Production is expected to be favorably impacted by higher mill output provided by the secondary ball mill, improved performance from the belt filters and more efficient solar drying due to the onset of warmer weather in Western Australia. Higher sales volumes and revenue are also expected compared to the third quarter as a result of a planned increase in the Company's sales and shipping schedule and higher lead prices achieved during the fourth quarter to date.

Conference Call and Webcast

Ivernia invites you to join its third quarter conference call on Tuesday, November 14, 2006 at 10:00 am. Eastern time. The call is open to all investors and the media. Toronto area and overseas participants may access the call at (416) 695-7848. Other North American participants should dial the toll-free number (1-877) 323-2091. The call will also be broadcast live on the internet at www.ivernia.com.

If you are unable to participate during the live webcast, the call will be archived on Ivernia's website at www.ivernia.com and will also be available via telephone until midnight on Tuesday, November 28, by calling (416) 695-5275 or (1-888) 509-0081 and using the passcode 632373.

Management's Discussion and Analysis and Consolidated Financial Statements

Ivernia's consolidated financial statements and Management's Discussion and Analysis for the third quarter and nine months ended September 30, 2006 are available on the Company's website www.ivernia.com and at SEDAR at www.sedar.com.

About Ivernia

Ivernia is an international base metals, operating, development and exploration company. The Company is the sole owner and operator of the Magellan lead mine in Western Australia. When in full production, Magellan is expected to be one of the top five lead-producing mines in the world producing close to 3% of total world lead mine production.

Ivernia trades under the symbol "IVW" on the Toronto Stock Exchange. Additional information on Ivernia is available on the Company's web site at www.ivernia.com and at SEDAR at www.sedar.com.

Forward-Looking Statements

This document may contain forward-looking statements within the meaning of Canadian securities law. These forward-looking statements reflect the current internal projections, expectations or beliefs of Ivernia based on information currently available to the Company. Forward-looking statements are subject to a number of risks and uncertainties, including those detailed from time to time in filings made by Ivernia with securities regulatory authorities, that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company. The reader should not place undue reliance on them. Some factors that could cause actual results to differ materially from those set forth in the forward-looking statements include: resources and reserves, metal price volatility, exchange rates, single mineral property, metallurgy, environmental factors, mining risks, insurance, labour and employment regulations, health and safety, and government regulations, dependence on key personnel, constraints on cash flow and nature of mineral exploration and development. Other risks and factors that could cause actual results to differ are described in Management's Discussion and Analysis ("MD&A") for the year ended December 31, 2005 under the heading "Risks and Uncertainties". Our MD&A and additional information on Ivernia are available on the Company's web site at www.ivernia.com and on Ivernia's SEDAR profile at www.sedar.com. All of the forward-looking statements made herein are qualified by the foregoing cautionary statements. Ivernia undertakes no obligation to publicly update or revise any forward-looking statements or information whether as a result of new information, future events or otherwise.

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