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The Minera IRL SA (i.e. Team Benavides) news release in English

This is my translation of the original Spanish language NR from Minera IRL SA (Team Benavides) today, the people who want to kick out the current board of usurpers, that you see in the post below (or here).

For what it's worth, even if I say so myself it's a good translation and faithful to the original.



Shareholders recommend to VOTE IN FAVOUR during the Extraordinary General Meeting to be held on November 26, 2015.

The Board proposed by Minera IRL Limited shareholders
will resume the financing process with COFIDE to develop Ollachea

Ø     Ollachea Community considers that the allusions made by the current Board in the Circular to convene the Extraordinary General Meeting (EGM) are offensive.
Ø     Minera IRL S.A. responds to FALSE statements included in the EGM Circular.

Lima, November 11: The Board proposed by Minera IRL Limited shareholders will resume the mandate signed with COFIDE Peruvian development bank to structure a senior debt facility of up to US$ 240 million aimed to build the Ollachea gold Project in the South of Peru, and which includes the payment of the Bridge Loan that amounts to US$ 70 million, complying with the commitments to the Community and the financial recovery of the Company.

The Company shareholders convened an Extraordinary General Meeting (EGM), to be held on November 26, and recommended to VOTE IN FAVOUR of appointing 6 new Directors and removing the 3 current Directors. The new Board commits to shorten the financing terms to develop Ollachea project, to resume the good relationship with the Community and renew the Company value for the shareholders.

The Board proposed by the shareholders includes: Jorge Luis Ramos, CEO of COFIDE; Julian Bavin, former CEO of the Americas of Rio Tinto; Leonard Harris, former CEO of Minera Yanacocha (Newmont); Frank O'Kelly, former member of JP Morgan; Armando Lema, Partner in Estudio Thorne, Echeandia & Lema; and Diego Benavides, Company co-founder and President of Minera IRL S.A. and Compañia Minera Kuri Kullu S.A.

Regarding the EGM Circular, the recent press releases of Minera IRL Limited, the subsidiary, Minera IRL S.A., states the following:

·        False statements and comments in EGM Circular
·        Ollachea Community Statement
·        Chronology of events occur in the Company from March to October 2015
·        Process of removal of president in the subsidiaries and sale of Corihuarmi gold
·        Financing alternatives and risk of shares dilution

False statements and comments in EGM Circular

The board of directors of Minera IRL Ltd, via a request of a group of concerned shareholders, has called an Extraordinary General Meeting (EGM), to be held in Toronto on Novembers 26th 2015. The EGM was announced by a news release which explained the actions of the current board of directors of Minera IRL Ltd, led by ex-executive president Daryl Hodges, harmed relations with the community of Ollachea and caused a serious company management crisis, putting at risk the development of the Ollachea project.

The news release also contained points of view and commentaries from the current board of directors, to which he following comments are addressed, as we recommend that shareholder VOTE FOR the proposed new board of directors and remove the current board.

It is FALSE that Mr. Hodges recommended Mr. Benavides for the position of Interim CEO. Mr. Benavides was appointed to this position by the Company's co-founder Courtney Chamberlain, before he announced his medical leave in March 2015.

It is FALSE that Mr. Benavides refused to cooperate with Mr. Hodges. The capacities and responsibilities of Mr. Benavides as Interim CEO of MIRL and the Peruvian subsidiaries were usurped by Mr. Hodges in July 2015 through his re-organization plan, which started 30 days after the Company signed COFIDE mandate and debt facility. These events resulted in criminal charges being brought by Mr. Benavides against members of the current board of directors, certain officers of the company and Mr. Daryl Hodges. These charges are currently under investigation by the relevant Peruvian ministry.

It is FALSE that Mr. Benavides took the de facto control of the Peruvian subsidiaries. Mr. Benavides has been President and General Manager of Minera IRL S.A. for 13 years, with total transparency and the permanent control of the Board, and has held similar positions for 9 years in Compañia Minera Kuri Kullu S.A.

It is FALSE that Mr. Benavides prevented officers of the company from doing their jobs or from entering the company offices. The COO of Minera IRL Ltd, Eric Olson, worked in Peru for over a year. The Peruvian Migratory authorities asked him to present his work visa via two official citations, to which Olson refused to appear, preferring to flee from the IRL offices in Lima and subsequently from Peru on both occasions. The Management and Finance VP, Carlos Yrigoyen, was physically present in the Lima offices of IRL in the period between July and September 2015, at which point  until he was renamed as Controller of Minera IRL Ltd in Toronto.

It is FALSE that there exists a process to remove key personnel for no apparent reason. There is enough evidence that the Company's personnel affected the relationship with the Community and misused the Company's assets. The evidence and legal procedures will be duly submitted in compliance with the Peruvian laws.

It is FALSE that the information to publish the Financial Statements was not submitted. Minera IRL S.A. sent the documents on August 06, 2015 to the CFO, Brad Boland, who resigned his post on September 28, 2015, irrevocably and immediately, leaving the Company without the signature requested by the TSX for its publication. MIRL Board changed the facts. It informed on September 29 that there was a delay in the publication because the documents were not received, and on October 01 it informed on the CFO resignation, three days after the date it happened.

It is FALSE that Minera IRL S.A. and its directors failed to convene a Shareholders Meeting. Minera IRL Ltd presented its request for a meeting on October 27th after complying with the necessary accreditation. The EGM of the Peruvian subsidiary will take place on December 3rd 2015.

It is FALSE that Mr. Armando Lema, proposed as Director by the shareholders has any debt with SUNAT, which is the Peruvian tax authority. Mr. Lema ceased to be a partner of Estudio Lema, Solari, & Santivañez a few years ago, and therefore such firm is in charge of fulfilling the obligations with SUNAT. Mentioning this subject is unethical and evidences the interest of the Non-Executive President, Jaime Pinto, who was also partner of said Firm from 2008 to 2010, to discredit Mr. Lema.

It is FALSE that COFIDE declined a meeting with the Company. The Deputy Minister of Economy and President of COFIDE, Mr. Enzo Defillipi answered the meeting request stating the COFIDE management issued were responsibility of the CEO Jorge Ramos, who had a meeting with Mr. Pinto on August 21, 2015, after he submitted his letter stating he was appointed as Director on August 19, 2015 by Mr. Hodges. According to the press release, Mr. Pinto was "announced" as Director on August 27, and "appointed" on September 03. Mr. Pinto had access to confidential information and represented the Company before his official appointment as Director.

It is FALSE that Mr. Jorge Ramos is not qualified to be member of the Board or there is any conflict of interests. Mr. Pinto's interpretation of the Peruvian Corporate Law is not appropriate since COFIDE is a development bank; therefore it has no direct connection with the economic sector (mining) in which Minera IRL operates. Moreover, Mr. Ramos will participate as Director on a personal basis, not as a representative of COFIDE.

It is FALSE and biased to alert about a situation of permanent de-listing of AIM shares if the nominated adviser (NOMAD) resigns. The company and/or its newly elected directors after the EGM are in position to replace the NOMAD before the 30 day period indicated by AIM lapses.

Other statements from the Circular will be responded in the Community Statement and Chronology of events.

Ollachea Community Statement

Ollachea Community Board of Directors informed the subsidiary, Compañia Minera Kuri Kullu S.A., that they consider the manipulation allusions, made by the Board in the EGM Circular, to be offensive and also that the statements made by the Non-Executive President, Jaime Pinto,  regarding Community support for his position inappropriate. The Community has requested a meeting with COFIDE to learn about the status of the credit granted to the Company. After said meeting they will issue a statement regarding their position in relation with the project development and the Company.

Chronology of events from March to October 2015

Regarding the events that took place in the Company from March to October 2015, they include the plans of Mr. Hodges to take over the position of CEO, and obtain extraordinary benefits through a contract with his consulting firm, which includes becoming a second structurer of the financing agreement that fails to acknowledge the express exclusivity of the Mandate signed with COFIDE as sole structurer until May 2016.

It is necessary to specify that the management of Mr. Chamberlain and Mr. Benavides, Company founders, was thoroughly assessed by more than 20 companies from around the world, that between 2012 and 2014 visited the projects in Peru and had full access to the accounting information as part of their interest to be part of the financing or development of Ollachea project. Also, from February 2014 to June 2015, COFIDE and Goldman Sachs performed a Due Diligence in the Company.

Mr. Hodges, after COFIDE bridge loan was secured, failed to acknowledge all these processes of corporate legal review and started a re-organization that included the Ethics Hotline that served the Board to justify the dismiss of Mr. Benavides as CEO due to alleged inaccuracies that are still unknown up to this date, three months after Mr. Benavides' removal, on August 24, 2015.

These and other facts described below led Mr. Benavides to file a criminal complaint due to acts of Management Fraud, Defamation and Misrepresentation against Daryl Hodges, Douglas Jones, Robin Fryer, Jaime Alberto Pinto Tabini and Carlos César Yrigoyen Elejalde. They will be summoned by the Peruvian justice system through mechanisms of international criminal cooperation and Interpol, in order to clarify the criminal offenses attributed to them.

Chronology of events:

On March 4, 2015, the Company's CEO, Courtney Chamberlain, before his medical leave, refused to accept the proposal of Mr. Daryl Hodges to be appointed CEO, and held to his original decision to assign the co-founder, Diego Benavides, for this position. On March 5, 2015, the Board appointed Mr. Hodges as Executive President and Mr. Benavides as Interim CEO. The due diligence on Mr. Benavides performed by the Company's nominated advisor, Canaccord Genuity, was satisfactory, and his appointment as Interim CEO was announced on May 5, 2015.

After his nomination as executive president of the company, Mr. Hodges signed an indefinite-term contract with his own company Ladykirk Capital Advisors Inc., which set an annual salary of US$ 180,000, fees of up to US$ 250,000 regarding the bridge loan and mandate with COFIDE, and a bonus of US$ 680,000 in the event of any change in the structure and functions of the Company. A summary of the contract, plus other percentage benefits detailed below, were included in the Shareholders General Meeting Circular dated August 27, 2015.

On June 8, 2015, Minera IRL Ltd. announced, by means of a press release, that it had secured a bridge loan from COFIDE of up to US$ 70 million and the commitment to include COFIDE in Minera IRL Board, subject to regulatory approvals. All the documents approving the management and transparency of the Company, which allowed securing COFIDE loan, were signed by Mr. Hodges, as well as the specified commitments.

On July 8, 2015, Mr. Hodges and the Board approved a change in the structure and functions of the Company. Mr. Hodges proposed himself as CEO and to move Mr. Benavides to the position of Vice-President of Communities, Press and Legal Affairs. On July 14 Eric Olson was appointed as COO, and the position of Vice-President of Management and Finances of Minera IRL S.A. was created and Mr. Carlos Yrigoyen was appointed for this position, and Mr. Hodges granted him the functions and responsibilities that belonged to Mr. Benavides as President and Manager of the Peruvian subsidiaries.

On July 15, 2015, a letter from Mr. Hodges to COFIDE stated that the Company's responsibility is to the shareholders and not to the lenders. This was a response to COFIDE’s request to discuss with the Board of Minera IRL Limited the planned changes and the inexplicable statements of disapproval of Mr. Hodges regarding the management of the Company's founders during a meeting held with COFIDE's CEO, Jorge Ramos. Mr. Hodges never agreed to the communication request between COFIDE and the Board.

On August 10, 2015, Mr. Hodges introduced himself as Executive President and CEO of the Company during the presentation made with Ernest & Young (EY) to announce the implementation of the Ethics Hotline. According to the manual of this anonymous system, EY receives and assesses the veracity of the message, then it is sent for investigation to the Board, and if the Board confirms the information, the necessary corrective measures are implemented. The manual also states that it is necessary the Company's personnel are aware of the Code of Ethics. A draft of this document was distributed by Mr. Hodges on August 19, 2015.

On August 24, 2015, the Board removed Mr. Benavides from the position of Interim CEO on the ground of inaccuracies received through the Ethics Line. E&Y managed to "review and validate" the "anonymous" complaints in a record time: only 2 working days after the distribution of the draft of the Code of Ethics (Wednesday, August 19). Likewise, the Board had "enough time" to assess, investigate and decide on the dismissal of the Interim CEO. It is worth noticing that Mr. Benavides' dismissal was announced 14 days after Mr. Hodges introduced himself as Company CEO.

On August 27, 2015, during the Shareholders Annual General Meeting, 92% of the votes were in favour of removing Mr. Daryl Hodges from the position of Director. A few hours later, Mr. Jaime Pinto was appointed as his replacement, and was ratified on September 3rd. As informed above, Mr. Pinto approached COFIDE with his appointment as Director signed by Mr. Hodges on August 19. What was the purpose of Mr. Hodges and the Board of hiding the truth and the actions of Mr. Pinto before his official appointment? Among other facts that the Board intentionally hid is the intended early closure of Corihuarmi gold mine for November 1, 2015.

On September 21, 2015, the de-listing of the shares was announced, as well as the process to remove Mr. Benavides from the position of President of the Peruvian subsidiaries. Information regarding said matters will be released later on.

On September 29, 2015, the Company informed about the delay in publishing the Half Year Financial Statements due to the compromise of control of the company’s subsidiaries. As stated above, this information is FALSE.

On October 9 2015, the group of concerned shareholders requested an EGM.

Process of removal of president in the subsidiaries and sale of Corihuarmi gold

Mr. Benavides has been the President and General Manager of Minera IRL S.A. since August 19, 2002, and holds similar positions in the subsidiary Compañia Minera Kuri Kullu S.A. since August 15, 2006, according to the corporate books from both subsidiaries and Peruvian Public Registries. There has not been any takeover of the Peruvian subsidiaries as wrongly stated by the Board. The statement that Mr. Benavides has manipulated Peruvian laws to his advantage, an accusation made by Jaime Pinto, Robin Fryer and Douglas Jones, is also false and without any basis.

Regarding the gold sale, Minera IRL SA has protected the company from insolvency and from sanctions that would have been incurred by the current board of Minera IRL Ltd, who refused to comply with the commitments of the Peruvian subsidiary with Scotiabank Lima and Peru’s Ministry of Energy and Mines (MEM), related to the closure guarantees of the Corihuarmi mine.

On January 19, 2015, Minera IRL S.A. signed an agreement with Scotiabank Peru, whereby it granted letters of guarantee in order to guarantee the closure of Corihuarmi mines and Ollachea Project, for a total of US$ 3,908,275.67.    

Minera IRL S.A., the subsidiary, has the obligation to submit, within 12 working days each year, an Environmental Guarantee to cover the estimated cost of closure of the Corihuarmi mine. If this is not done the MEM will sanction the company with a mine paralyzation of two years. On January 19 2015 Scotiabank Peru granted Minera IRL SA letters of guarantee totalling US$ 3,908,275.67 as guarantee for the closure of Corihuarmi mines and the Ollachea gold project.

To comply with this guarantee, Minera IRL SA committed to deposit 100% of its revenues from gold sales form the Corihuarmi mine in its account in Scotiabank Peru after July 30 2015, so that the credit be debited by U$325,689.63 per month until the total of U$3.9m of the guarantee had been reached.

The refineries Metalor and Auramet deposited in the name of Minera IRL SA in the Royal Bank of Scotland (RBS) in London, the  corresponding payments gold purchases from Corihuarmi. Minera IRL SA asked them to change the destination of their deposits to the account in Scotiabank Lima, who repied that they would now continue the commercial relationship. Minera IRL Ltd refused to comply with the commitments to Scotiabank and pressured the refinery companies not to change the destination ot the deposits.
Minera IRL SA sought new buyers, a process that was blocked by the Board. Finally the Company signed a sales contract with Kaloti Metals & Logistics LLC, though which the company managed to fulfill its commitments to Scotiabank, as well as paying the workers' salaries, suppliers and asignments to the company headquarters.

Financing alternatives and risk of shares dilution

Among the grounds for convening the EGM, shareholders believe that the current Board does not have the capacity to properly manage the development of the Ollachea project and that there is a risk of loss of value of their shares.

Mr. Hodges, who inexplicably continues to be paid diverse benefits as well as a salary of U$15,000 per month from the company until 2017, proposed in August 2015 to implement a 10-1 share consolidation which would leave open the possibility of a large share dilution via a financing through the sale of new shares.

Mr. Hodges’ consulting company Ladykirk Capital would be in charge of this process, for which it has been granted the following commissions:

  • 0.25% of the new value of the pro-forma value of the “newco” after a successful fusion or acquisition which raises the share price of the company. The acumulative value is defined as the value of the newco company minus the value of Minera IRL Ltd at market close before the closure of the transaction.

  • 0.5% of the gross proceeds of any financing, via the emission of shares or financing convertible into shares.

  • 0.25% of the gross proceeds of any debt financing unrelated to the COFIDE financing for Ollachea, or a refinancing of all or part of the COFIDE structured financing.

The share consolidation was not approved by shareholders at the Annual General Meeting in August, but the director Robin Fryer, in recent declarations to the Global Mining Observer in the UK, said that the current board of directors planned to get financing via share placement. This warns of the intention to ignore the current mandate with COFIDE and run a share placement that, considering the current market conditions and current share price, would conclude in the dilution of share price value.

All the information contained in this news release has all necessary legal support and corresponding proofs. We recommend that you VOTE FOR all the options in the proxy. In the event that you have already cast your vote, you have the option to change your vote and VOTE FOR until the closing of vote in Peru, November 20th, and in the rest of the world, November 24th. Results will be announced on November 26th

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