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10/28/15

Latest from SP Angel on Minera IRL (IRL.to) (MIRL.L)

With the news that the Hodges asset-strippers running Minera IRL are applying to de-list from the TSX, effective November 10th, here's what SP Angel thinks of the move in its follow-up note this morning. Link here.

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Minera IRL (MIRL LN) SUSPENDED – Please vote to sack the board of Minera IRL Limited.  We believe they are not working in the best interest of shareholders
  • We view today’s statement as potentially disingenuous and potentially misleading for investors who might not know more about the current situation at Minera IRL.
  • The board of Minera IRL Limited report that the company has applied to delist from the TSX in Canada.  TSX are to initiate an expedited delisting review for failure to comply with the TXS’s continued listing criteria.
  • It is our view that news of this review plays very neatly into the hands and strategy of the Minera IRL Limited board who appear unusually keen to allow the company to delist in each market on any regulatory pretext.
  • The statement also points out that the company’s admission to AIM will also be automatically cancelled should the shares be suspended for a period of six months.  While this is strictly true, we believe the board should be focussed on making more effort to reinstate the shares and to prevent delisting on AIM and the TSX. 
  • Today’s statement claims that “due to the actions undertaken by the manager of its Peruvian operating subsidiaries, there was a temporary compromise of control of those entities”.
  • It is our view that Diego Benavidez, who runs Minera IRL SA, is acting in the best interests of Minera IRL’s shareholders and the Peruvian community, whose support is essential.  Mr Benavidez has sold gold held by Minera IRL SA with funds being used to ensure that Minera IRL SA and Limited meet its obligations in Peru in order to  prevent a potential default situation.  There is no sense of any shortage of cash within the business.
  • We also view the statement of cancelling the admission to AIM as scaremongering and potentially misleading as we, again, view the situation as eminently resolvable.
  • We believe that the Board of Minera IRL Limited are not working in the best interest of shareholders to resolve the issues which might lead to the cancellation of its listings. 
Conclusion:  We conclude that shareholders should post their votes at the forthcoming EGM in favour of changing the board as petitioned.
* SP Angel analysts are expressing their own views and opinions in this analysis.  SP Angel has no corporate connection with Minera IRL or its subsidiaries.  SP Angel holds no shares in Minera IRL and does not have any current financial arrangements with the company.