Ivernia Inc.
TSX : IVW

Ivernia Inc.

November 14, 2007 06:00 ET

Ivernia Inc. Reports Third Quarter 2007 Results

TORONTO, ONTARIO--(Marketwire - Nov. 14, 2007) -

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

Ivernia Inc. ("Ivernia" or the "Company") (TSX:IVW) today reported an operating loss(1) of $2.1 million and a net loss of $5.8 million, or $(0.04) per common share for the third quarter of 2007. Results for the quarter were adversely impacted by the suspension of lead concentrate bulk shipments through the Port of Esperance on March 12, 2007, which resulted in the temporary suspension of operations at the Magellan mine effective April 6, 2007. Resumption of operations is pending regulatory approval for containerized lead concentrate shipments through the Port of Fremantle in Western Australia. During the quarter, costs associated with maintaining the Magellan mine during the temporary suspension of operations were $1.8 million.

(1) Operating loss is comprised of care and maintenance costs and amortization

THIRD QUARTER HIGHLIGHTS

- Submitted formal application to the Western Australian Environmental Protection Authority ("EPA") for approval to ship lead concentrate in containers through the Port of Fremantle

- Started comprehensive consultation and information program on containerized shipments with the communities along the proposed transport route to the Port of Fremantle and in the Fremantle area

- Closed C$20 million equity issue; provided additional financial resources and flexibility for the planning and implementation of changes at the mine site and on the proposed transport route to facilitate the new containerized shipping and to implement a phased restart and ramp-up of operations

- Started detailed planning for phased restart and ramp-up of operations following receipt of the requisite approvals:

-- preparing the mine site to accommodate containerized lead concentrate shipments - current

-- test and commission recently-ordered bagging equipment and commence bagging of mine site stockpile - anticipated late fourth quarter 2007

-- shipment of mine site stockpile over a three to four month period as Company optimizes the logistics processes - post receipt of approvals

-- employee recruitment and training program to support production restart and ramp-up over a three to four month period towards full production - by the middle part of 2008

- Lead concentrate inventory of 27,000 dry tonnes ("dmt"), with net realizable value of approximately $45 million using a lead price of $1.50 per pound; currently stockpiled at the Magellan mine site (19,000 dmt) and a storage shed at the Port of Esperance (8,000 dmt)

- Further advanced the proposal for the shipment in sealed bags of the stranded lead concentrate at the Port of Esperance

- Parliamentary Inquiry report on the cause and extent of lead contamination in Esperance tabled and released; Company commented on the report in a news release dated September 7, 2007

Events subsequent to September 30, 2007

- Received results from independent consultant's tests of the transport route from the Magellan mine site to the Port of Esperance; confirmed no meaningful increase in lead levels in the soil sampled compared to previous tests in 1999 and 2005 (October 19)

- Public comment phase in formal EPA review of application to ship lead concentrate in containers through the Port of Fremantle completed (November 5); Magellan is preparing responses to comments received.

- Announced appointment of Dr. John Yeates as General Manager - Corporate and Social Responsibility, with primary responsibility for overall management of all health, safety, environmental, regulatory and community matters for Ivernia and Magellan (November 7)

Commentary

"Good progress was made in several areas during the quarter," commented Alan De'ath, Ivernia's President and Chief Executive Officer.

"The most important was the formal submission of the proposal for containerized shipments of lead concentrate through the Port of Fremantle. This submission put in motion the process that we are confident will lead to the resumption of operations. We base this on the quality of the proposal - its many levels of safeguards make it a safe, prudent and feasible method to transport lead concentrate in Western Australia or any other part of the world."

"We also started detailed planning for the implementation of changes in equipment, logistics and procedures necessary at the mine site to accommodate containerized shipment. Our intention is to be prepared for an orderly and efficient restart and ramp-up as soon as the necessary approvals are granted. Orders for the key bagging equipment have already been placed and delivery is expected in late fourth quarter 2007. Our plan is to commission the bagging equipment on site and bag the stockpiled lead concentrate so we will be ready to begin shipment once requisite approvals are received. We expect the shipment of the stockpiled material to occur over a three to four month period as we optimize the logistics processes. The recruitment and training program for new employees is planned to be launched immediately following receipt of requisite approvals to enable a phased ramp-up to full production over a three to four month period while generating cash inflow for the Company."

"The independent confirmation of no meaningful increase in lead levels in the soil tested along the transport route previously used from the mine site to the Port of Esperance is a significant reassurance to the Company and the communities along the route. Our commitment to implementing and maintaining best environmental practice, and continuously improving our environmental performance through review, assessment and reporting is unwavering," he concluded.

Suspension of lead concentrate shipments

Effective April 6, 2007, the Company's Magellan operation was placed on temporary care and maintenance following the March 12, 2007 suspension of lead concentrate shipments through the Port of Esperance. A core team of employees has been retained to carry out site care and maintenance until requisite approvals are received, and to plan and implement the on-site and transportation route changes for containerized shipment and execute the phased restart of operations.

Update on progress toward the resumption of lead concentrate shipments

Proposal for containerized shipments through the Port of Fremantle for export

The formal submission of the proposal for future containerized lead concentrate shipments through the Port of Fremantle for export was made to the EPA on September 14, 2007. The proposal includes recommendations from the Parliamentary Inquiry report on the cause and extent of lead pollution in Esperance, where appropriate. Under the proposal, lead concentrate will be loaded into two tonne UN-approved bulk bags which will be sealed then loaded into steel shipping containers at the Magellan mine site. The shipping containers will in turn be bolt sealed, washed down and independently inspected before departing the mine site. From the mine site, the containers will be trucked approximately 400 kilometres to a designated secure holding area in Leonora, Western Australia where they will then be transported by train directly into the Port of Fremantle for export to customers overseas. The proposal includes a number of risk identification, minimization and avoidance measures to ensure that the concentrate is handled and transported in a safe, efficient manner at every stage of the process.

The proposal is available on Ivernia's website at www.ivernia.com and Magellan's website at www.magellanmine.com.

The Company believes that its proposal, developed by leading Australian environmental consultants Coffey Natural Systems (formerly Enesar), in partnership with the Magellan operations management team, raises the bar and creates new standards of industry best practices for the handling and transport of lead concentrate going forward. The move to sealed and containerized transport is a complete departure from the current industry standard of bulk transport.

Containerization gives the Company control over critical aspects of the handling system, for which it previously relied on contractors, and ensures a clear line of responsibility for the handling and transport of its lead concentrate.

The EPA assessment process included an initial four-week public comment period, which finished on November 5, 2007. According to updated guidance received from senior regulators and government officials, the Company anticipates the Ministerial decision on the proposal to be issued during the first quarter 2008. However, there is no fixed or guaranteed timeline and no certainty on the outcome.

Consultation program

A comprehensive consultation and information program with communities along the proposed transport route to the Port of Fremantle and in the Fremantle area was started on July 7, 2007 and continues to date. The program's objective is to explain and seek comments on the proposal to export lead concentrate in sealed shipping containers through the Port of Fremantle. The Company has contacted, or delivered information to, a number of individuals and groups including elected representatives, local government officials, businesses and residents in the communities along the proposed transport route.

Details of the program were included in the Company's proposal and formal submission of September 14, 2007.

Plan for initiation of shipping and phased restart and ramp-up of operations

Planning and initiation of the preparation of the mine site to facilitate containerized shipments and an orderly and efficient restart and ramp-up of operations, as soon as the requisite approvals are received, was started during the quarter. Orders have been placed for the UN-approved bulk bags and an automated bagging machine. Commissioning of the machine is planned to begin shortly after delivery, which is expected in late fourth quarter 2007. Negotiations with road and rail haulage operators for the transport of containers from the mine site to the Port of Fremantle are underway.

The Company anticipates shipment of the current lead concentrate stockpile at mine site will take between three to four months to complete. The recruitment and training program for new employees will commence immediately following receipt of the requisite approvals. This arrangement is expected to generate more than sufficient cash flow to fund the phased restart and ramp-up of operations over a three to four month period as the Company achieves full production levels by the middle part of next year.

Shipment of lead concentrate stockpile at the Port of Esperance

The proposal for the removal of approximately 8,000 dry tonnes of Magellan's lead concentrate currently being held in a storage shed at the port is being finalized following several meetings between the Esperance Port Authority, regulators and Magellan during the third and fourth quarters.

The proposal will form part of the Esperance Port Authority's application to the Department of Environment and Conservation ("DEC") for authorization to proceed with the shipment. As the application to resume shipment of lead through the Port of Esperance is not within Magellan's control, the anticipated timing for and costs involved in that operation cannot be determined at this time.

A full community consultation and information program regarding the proposal has been conducted by Magellan in the Esperance community. Management believes that all stakeholders, including the Esperance Port Authority, the community of Esperance and the Company will benefit from the timely and safe removal of the stranded lead concentrate. Going forward, Ivernia does not intend to seek (other than the removal of the stranded lead) approval for any further shipments through the Port of Esperance.

The proposal is available on Ivernia's website at www.ivernia.com.

Western Australian Parliamentary Inquiry

The Parliamentary Committee commissioned to inquire into the cause and extent of lead pollution in the Esperance area tabled its report on September 6, 2007. The Company subsequently issued a news release commenting on the report on September 7, 2007.

Inquiries by the Parliamentary Committees are conducted as Parliamentary proceedings, as opposed to judicial processes, without formal rules of evidence, sworn testimony or the opportunity for evidence to be tested by way of cross-examination.

The report itself does not have binding effect, but serves to inform the Parliament of the Committee's view of what happened at Esperance, who may be responsible and recommended action for the Government to take.

The Government has three months from the tabling of the report to respond to the recommendations - which it can accept, reject, modify or adapt.

Copies of Magellan's submissions during the Inquiry, the tabled report and the Company's subsequent news release are available on the Ivernia website at www.ivernia.com. Additional information relating to the Inquiry can also be obtained from the Parliament of Western Australia's website at www.parliament.wa.gov.au.

Transport route sampling results

Subsequent to the end of the third quarter, the Company received the results of sampling conducted along the transport route from the Magellan mine site to the Port of Esperance. The sampling was undertaken by CSA Australia on behalf of Magellan in August, 2007. The results indicate that the levels of lead recorded along the route are well under the Department of Environment guideline level of 300 milligrams per kilogram and that there was no meaningful increase in lead levels in the soil sampled compared to previous tests conducted in 1999 and 2005.

Other developments

In November, 2007, the Company appointed Dr. John Yeates as General Manager - Corporate and Social Responsibility. Dr. Yeates will join the Company in mid-December and will be based at the operating office in Perth, Australia. He will be a key member of the senior management team with primary responsibility for overall management of all health, safety, environmental, regulatory and community matters for Ivernia and Magellan.

Dr. Yeates has over 35 years of experience in all aspects of environmental management across a wide range of industries within Australia and in the Asia-Pacific region.

Prior to joining Ivernia, he was a senior executive at LandCorp, the Western Australian Government's land and property developer, where he provided corporate leadership and managed environmental risk assessment, compliance and management for all the company's projects. He led the development and implementation of environmental due diligence and risk management procedures and programs.

An infill drilling program on the Pinzon and Magellan East areas was commenced during the quarter and continued into the fourth quarter. The data is being analyzed and the results will be included in the next reserve and resources statement expected late in the first quarter of 2008.

A new 10-month environmental license was issued by the DEC for the Magellan operation. This license replaces the three-month, short-term license noted in the Company's second quarter report.



Financial Summary

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($ millions, unless otherwise Three months ended Nine months ended
indicated and per share amounts) September 30, 2007 September 30, 2007
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(unaudited)

Revenue - 20.0
Operating loss (2.1) (3.9)
Net loss (5.8) (14.5)
Basic loss per share (0.04) (0.11)
Cash used in operating activities
before changes in working capital (4.3) (11.4)
Changes in working capital 1.0 (13.8)
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Concentrate inventory - 000's
dry tonnes 27.0 27.0
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Strengthening the balance sheet

On August 1, 2007, the Company closed a C$20 million bought deal financing which provided additional financial resources and flexibility for the planning and implementation of changes at the mine site and on the transport route to facilitate the new containerized shipping and to implement a restart and phased ramp-up of operations after the requisite approvals are received. The underwriters of the financing purchased 12,125,000 common shares ("Common Shares") of the Company at a price of C$1.65 per Common Share for gross proceeds of C$20 million. The positive outlook for the lead market provided good conditions for the financing to be undertaken. Ivernia is expected to be one of the world's leading suppliers of lead concentrate following the resumption of operations.

Lead market fundamentals

The lead price continued its record-breaking run in the third quarter underpinned by tight market conditions. Supply has been impacted by disruptions at several producers, including Ivernia's Magellan mine and lower year-over-year exports from China following export restrictions imposed by the Chinese government.

Demand nevertheless continues to grow strongly. Compared to the same period in 2006, refined consumption in China and the rest of Asia is estimated to have increased 22% and 9% respectively, according to data available up to August. Each 1% change in world demand equates to approximately 84,000 tonnes of lead - the equivalent of a major mine the size of Magellan.

The 3-month lead price averaged $1.40 per pound in the third quarter - including a high of $1.57 per pound. This level was exceeded with transactions over $1.70 per pound in October 2007. The average for the first nine months of 2007 was $1.07 - a 100% increase over the $0.53 recorded for the same period in 2006.

Conference call and webcast

The Company will host a conference call and webcast at 9:00 a.m. Eastern time on Wednesday, November 14, 2007.

Toronto area and overseas participants may access the call at 416-340-8010. Other North American participants should dial the toll-free number 1-866-540-8136. 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 Wednesday, November 21, 2007 by calling 416-695-5800 or 1-800-408-3058 and using the passcode 3240850.

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. Upon recommencement of production Magellan will be the world's largest pure lead mine accounting for approximately 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 website at www.ivernia.com and at SEDAR at www.sedar.com.

Forward-Looking Statements

This document contains certain "forward-looking statements". All statements included in this document (other than statements of historical facts) which address activities, events or developments that management anticipates will or may occur in the future are forward-looking statements, including statements as to the following: the duration of the suspension of the Company's mining and milling operations, the proposal to ship lead concentrate through the Port of Fremantle, the implications of the government of Western Australia's continuing investigations into the matters resulting in the suspension of mining operations, the possibility of legal or regulatory action (and any resulting costs or liabilities) which may be taken in connection with the matters being investigated, the estimated timing of the receipt of required regulatory approvals to resume shipment of the stranded lead concentrate at the Port of Esperance and further lead shipments from Magellan (such approvals are not anticipated to be received until, at the earliest, during the first quarter of 2008), the Company's ability to repay the Secured Facility should the lenders elect not to convert the debt into equity, future targets and estimates for production, capital expenditures, operating costs, cash costs, mineral resources and ore reserves, recovery rates, grades and prices; business strategies and measures to implement such strategies; competitive strengths; estimated goals and plans for Ivernia's future business operations; and other such matters. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "contemplate", "target", "believe", "plan", "estimate", "expect", and "intend" and statements that an event or result "may", "will", "can", "should", "could" or "might" occur or be achieved and other similar expressions.
These statements are based upon certain assumptions and analyses made by management in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances such as the resources and reserves, metal price volatility, lead concentrate treatment charges, exchange rates, single mineral property, metallurgy, environmental factors, mining risks, insurance, labour and employment regulations, health and safety, government regulations, dependence on key personnel, constraints on cash flow and nature of mineral exploration and development. These factors may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements, and there can be no assurance that the actual results or developments anticipated by management will be realized or, even if substantially realized, that they will have the expected results on Ivernia. The reader should not place undue reliance on them. Other risks and factors that could cause actual results to differ are described in Management's Discussion and Analysis ("MD&A") for the quarter ended September 30, 2007 and for the year ended December 31, 2006 under the heading "Risks and Uncertainties" and in the Company's final Short Form Prospectus filed on July 25, 2007 ("Short Form Prospectus") under the heading "Risk Factors". Our MD&A, Short Form Prospectus and additional information on Ivernia are available on the Company's website at www.ivernia.com and on Ivernia's SEDAR profile at www.sedar.com. All of the forward-looking statements made in this document are qualified by the foregoing cautionary statements. The Company expressly disclaims any obligation to update or revise any such forward-looking statements.

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