What follows is a translation of a letter sent to Frank O'Kelly and the board of Minera IRL, yesterday November 20th, by a large shareholder of the company (he has over a million shares personally and is closely connected to other Peruvian shareholders with many millions more). His name is omitted from this translation, but both I and Mr. O'Kelly are fully aware of his identity. He has given me permission to reproduce this translated version here on the open blog. Here we go.
8. To authorise the directors in accordance with Article 6.4 of the Articles of Association of the Company to allot up to a maximum of 115,567,514 ordinary shares (on a pre-consolidation basis), being 50% of the ordinary shares issued by the Company as at the date of the Notice of Meeting.
Special Resolution 9. To authorise the directors in accordance with Article 6.4 of the Articles of Association of the Company to allot up to a maximum of 115,567,514 ordinary shares (on a pre-consolidation basis) for cash, being 50% of the ordinary shares issued by the Company as at the date of the Notice of Meeting.
Special Resolutions 8. That the Articles of Association in the form attached as Schedule 1 to the Company’s Information Circular dated October 25, 2016 (the “New Articles”) be and are hereby adopted as the Articles of Association of the Company to replace the existing Articles of Association of the Company (the “Existing Articles”).9. If the New Articles are not adopted, that the Board of Directors be authorized, in accordance with Article 5.1 and 6.4 of the Existing Articles, to allot up to 115,567,514 ordinary shares, for cash and free of the pre-emptive rights provided for in Article 6.1 of the Existing Articles.
“Step one, which Daryl Hodges had started to work on, but was blocked, was to have an equity raising in all three markets, maybe a rights issue,” Fryer says. “It’s a pretty small enterprise in the London market, even in the AIM side, but in Peru, it’s a big deal
The Existing Articles were tailored to conform to the requirements of two trading markets - the AIM market of the London Stock Exchange and the Canadian Toronto Stock Exchange (or TSX) - but the Company is no longer listed on the AIM market and has no intention of seeking to renew that listing.
But its flagship project is a major advanced new gold mine development, Ollachea, located in Puno in the South of Peru. This project is fully funded by a Peruvian State Development Bank ($240 million facility of which $70 million has been advanced). The mine is fully permitted and has subscribed a 30 year social license with the local community. The mineral resource exceeds 2.40 million ounces Au and M+I reserves of 1 million ounces, which will sustain a production of 100,000 ounces of gold per annum for a decade. The company is presently drilling off an already constructed 1.2 km access tunnel with a target of adding an additional 600,000 ounces to the resource. The down dip extension which is currently being drilled reports intersections up to 20 m with grades from the only 3 holes for which so far have assays reporting 5 g/t Au, some 40% better grade than the main ore body which was delineated with 82,000 m of drilling. AMEC has filed a NI 43-101 compliant feasibility study.
On a final note regarding information appearing on social media stating that the Directors do not own any stock in the Company, I would like to clarify that the new members of the Board, including me, were appointed during the period of the CTO and as a consequence were and currently remain unable to buy shares in Minera IRL. Please be assured that the Board members are dedicated to restore the fortunes of the Company and I have no doubt that they will confirm that sentiment by purchase of stock once trading resumes.”
O’Kelly goes on to note that companies like Dalradian command a market cap ten times that of MIRL, whilst possessing comparable resources but still have permitting and financing challenges ahead. Meanwhile MIRL has a producing gold mine, a fully funded project with all the permits in place, a 1.2 km access tunnel, an EPC fixed price contract with Peru’s largest mine construction company and a 30 year social license for the local community. One can count on one hand, he says, the number of gold projects as advanced as Ollachea. His short term target is to get the stock price over CAD $0.30.
*A Spanish expression. I decided to translate it literally.