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11/6/15

Minera IRL (IRL.to) (MIRL.L): The lawyers try again

A great big looong news release from Team Hodges this morning, which you can read on this link. The usurpers cover many angles and aspects, but as usual from these people it's a classic of lawyer-speak, so what they don't say about each subject and the way they carefully craft their sentences is important.

Take for example this, in which Team Hodges shows their...errr...respect?...for this humble corner of cyberspace:

Eric Olson, Chief Operating Officer

Minera would like to confirm that Eric Olson, Chief Operating Officer, has not had permission to enter Peru
revoked by the Peruvian immigration authorities as speculated, nor has he broken any immigration rules. In
common with most expatriates who work in the global mining industry, Mr. Olson works on a rotation system which
includes 6 weeks in Peru, and 2 weeks outside Peru.

What they don't mention are:

1) The two official appointments with the immigration authorities that he failed to attend
2) The way he left the country rather than face the music.
3) That Olson cannot have his permits revoked until he sets foot on Peruvian soil again. Right now here today what they say may be technically true, but it's pure lawyer-speak and my stars, it's going to be fun to see how he gets on at the airport when he decides to show his face in Lima again.

Then there's this, what they write about Daryl Hodges' payments from IRL, direct quotes

The Company and Mr. Hodges have agreed to the following payments in
settlement of all obligations due to him: $15,000 a month from November 2015 to April 2017 followed by a
payment of $10,000 in May 2017. 

The Company would like to reiterate that subsequent to the August 27, 2015 AGM, Mr. Hodges has not provided any
services to Minera IRL Limited, and is not involved in any matters related to the Company's current situation.

Does anyone else see the glaringly obvious in those two statements? One about getting paid, the other about not doing a scrap of work? You'll also note that not a word is said about the $500,000 golden parachute payment aside from "it was triggered" and "change of control" because, as noted above, what these fork-tongue merchants don't say is every bit as interesting as what they do say. So is there still a bonus in place, Daryl?


Anyway, go have a look at the spindoctoring yourself. There's going to be so much more to get from this work of art.

PS: And one thing that's really really interesting is the way they haven't mentioned the name Brad Boland, not in this NR and not in the previous one, either. Oh what fun to come.

UPDATE: Here's what London-based Shore Capital and its analyst, Yuen Low, had to say about the linked NR today. Interesting how he's noted the Hodges pay stuff too.


MINERA IRL^ (MIRL, NR, CNP) – Minera soap opera: ex-Executive Chairman Daryl Hodges will get US$280k payoff, rather than US$680k. We continue to put aside our Dallas analogy while we consider the matter of former Executive Chairman Daryl Hodges financial arrangements with Minera. Earlier this month, we called on the company to fully disclose the details and the company today obliged.

· It emerges that Mr Hodges was indeed paid US$15k/month over March to September 2015 (US$105k total), which we view as fine on the basis that his basic salary was US$180k/year.

· However, it also turns out that there really was a gobsmacking US$0.5m ‘change of control’ clause (i.e. ‘golden parachute’) which was deemed “triggered” (along with a full year’s pay as a lump sum) as a result of his being voted of Minera’s board.

· Minera is attempting to justify this by comparison with Mr Chamberlain’s terms, which included a similar provision – but we see this as inappropriate given that Mr Chamberlain built up the company over many years, whereas Mr Hodges only joined in 2014.


Minera’s and Mr Hodges’ legal counsels have since concluded discussions on the termination of his contract.

· Mr Hodges is now to be paid US$280k, comprising US$15k/month from November 2015 to April 2017 and US$10k in May 2017.

· We are encouraged that this is significantly less than the aforementioned US$680k, although we still view US$280k as excessive under the circumstances.


Minera also reiterated that Mr Hodges “has not provided any services” to it nor been involved “in any matters related to [Minera’s] current situation” since being voted of the board.


Meanwhile, Minera is still “in the process” of dismissing former interim CEO Diego Benavides from his positions in the company’s operating subsidiaries, which could take several months. Minera reiterated that the principal cause for dismissal was Mr Benavides failure to co-operate with Mr Hodges as Executive Chairman, and his “resistance to changes” that Mr Hodges and Minera’s board wanted to implement. In a press interview, one of Minera’s directors also claimed that Mr Chamberlain “never saw fit” to propose Mr Benavides for a board position, and that it was Mr Hodges who elevated him to position of interim CEO “to try him out”.


We understand that Mr Benavides has a very different story, and we call on Minera to release the minutes of its meetings to put this issue to bed. We understand also that Minera has to be registered in Peru in order to be able to properly call for a shareholder meeting of its subsidiaries, and that this apparently isn’t the case. We therefore also call on the company to clarify this issue.