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Minera IRL (MIRL.L) ( Team Hodges tries and fails to cause problems in the community (from IKN340)

This is today's piece on Minera IRL ( (MIRL.L) in The IKN weekly issue 340, out this evening. Subscribers know it's going on the open blog.

If it's all TL:DR for you, just pay attention to the letter sent by the Ollachea community to Minera IRL, dated November 13th. It's in block caps, you can't miss it. The rest is just me ranting but that bit is important.


Minera IRL (MIRL.L) ( Team Hodges tries and fails to cause problems in the community

Please note: This article will also feature on the IKN blog

Back in “A policy statement on Minera IRL” featured in IKN337 dated October 25th, the first bullet point was “it’s going to be dirty”. Last week provided plenty of that, particularly in the Team Hodges news release on Friday (19) so I’m going to take as read that mud-slinging on both sides is part and parcel of this whole process and restrict my comments to things from last week that are actively interesting. Though I will state at the top here by way of reply to a few mailers that Team Hodges’ idea of “initiating legal proceedings” (yes, that means against me, big surprise) is probably the very same as the “start of legal action” they called against Diego Benavides. Let’s note that to this day, Benavides has not been charged with a single count of wrongdoing. Not one. A whole truckload of rumours and whisper campaigns for sure, August, September, October and November, but you have to wonder why they haven’t moved forward and made the charges public or formal. So these jokers can “initiate” all they want against me, it’s worth precisely zero and is pure BS lawyer-spiel.

So to real matters and first, it’s interesting to note in passing that of the eleven points out of Team Benavides (20) about false and misleading statements made by Team Hodges...

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.

...the current board of directors (i.e. Team Hodges) chose to address just one of them in their NR on Friday (21). As stated previously, what this band of snakes doesn’t say is just as important as what it says. 

But the most interesting part of the Team Hodges NR was at the beginning, specifically this bit:

Developments concerning Ollachea Community
Comuneros (persons with voting privileges) from within the Ollachea community recently met with the Company and the Company's external community relations consultant in Lima. During this meeting the Comuneros informed the Company of their concern about the events which led up to the suspension of support for the Ollachea project from the President of the Ollachea community, as announced in a press release on August 17, 2015. Additionally, the Company understands that a community information meeting took place in Ollachea on 7 November at which this matter was discussed in front of representatives of Minera IRL SA (Minera IRL Ltd's 99.99% percent owned subsidiary in Peru) and the providers of the bridge loan, COFIDE.

The Minera IRL Limited board (the "Board") is discussing these developments with the Company's community relations consultant and is awaiting detailed minutes of the meeting. The Board expects to be in a position to provide further information on community support for the Ollachea project next week.

What’s clear here is that Jaime Pinto and his band are trying to sow discord, or what to the world may look like discord, in the ranks of the Ollachea community. The tactics aren’t difficult to guess at either, the idea being that they try to call into question the veracity of the Ollachea community’s position as stated in the official letters sent to Minera IRL in August and try to make out that the community is split, rather than united as one.

The problem is that they’ve gone about this dirty tricks campaign in such a clumsy and ignorant way that it’s about to explode in their faces again. What went down last week is that on the morning of November 11th, Jaime Pinto sent some lackeys into town with flyers to distribute to the locals in the town square, this happening at the same time as him sending a copy of the same letter to the community president, Sr. Valeriano. Summing up the flyer, was something along the lines of:

  • My name is Jaime Pinto, I’m the maximum authority in Minera IRL
  • My job is to finish the process of kicking Diego Benavides out the company
  • Please tell me whether the letters you sent to the company in August were written by you, or were they faked by somebody else.
  • I look forward to working with the community and will honour all agreements previously made.

Not only has Pinto never set foot in Ollachea, his name wasn’t even known to the locals as the company chair until that flyer appeared because all agreements and deals Ollachea has with IRL are via its subsidiary, Kuri Kullu SA, and its president is not Pinto but still (much to Team Hodges’s chagrin) Diego Benavides.

But back to the point in hand and once again we see Team Hodges people doing exactly the same thing that got them into hot water with the town’s authorities back in August; refusing to follow the correct channels of communication and talk with Ollachea’s elected authorities, preferring to hand out flyers on the streets to the rank and file in order to sow discontent. And to be clear, the act of handing out flyers in this way is a criminal offence in Peru, called (literally) “Perturbation of Public Tranquility”. Aside from this being a direct insult to the people who make the decisions in the town (you may have noted by now how Ollachea’s run like a democracy; that’s because it is a democracy), it once again shows the complete tone-deafness of the people who’d be running the community relations in Ollachea if they were to win on November 26th. People, you just cannot treat communities in Peru like this! It’s like watching something from the era of Spanish rule and we can point a whole list of examples of soured community relations that have scuppered mining projects in Peru. This idiotic way of treating locals is what got Daryl Hodges into trouble back in July and August, but lo and behold, Team Hodges are sowing it all over again.

Therefore it will come as no surprise to learn that the town of Ollachea has already replied to Jaime Pinto via the letter you’re about to read (translated by your author). Not only that, but this communique will appear in the Monday edition of Peru’s newspaper of record, El Comercio (in the original Spanish of course) so that the whole of Peru clearly understands the position of the town of Ollachea.

Declaration of the Rural Community

Signed by the community directive and all other organizations of the Ollachea community.

First: Backed by our community, we are extremely offended by the expressions and lack of respect for our community, for which we ask for full respect for our lands, people and especially our organizations.

Second: To this end, we informed that the transitory President of the Minera IRL directors, Mr. Daryl Hodges, disturbed (our community) by handing out leaflets that disrespect our community authorities. The same thing has again happened, this time on November 11 via another leaflet handed out by Señor Edwin Huanca Rosel and signed by Mr. Jaime Pinto and we demand that he abstains from declarations about the community to media channels. It is a serious accusation and an insult against the dignity of the community and because of that we find ourselves extremely offended by the expressions distributed by the documents handed out.

Third: If Mr. Pinto continues with his declarations and his intent to divide us, the whole community will make the decision to permanently stop the project.

Fourth: The rural community has maintained a relationship for over eight years with the Kuri Kullu S.A. Mining Company. We wish this to continue, and that also our Honorary Community Member Dr. Diego Benavides Norlander is also respected, who we look to in order to continue our established relationship in compliance with established commitments and agreements.

Fifth: The community of Ollachea is in favour of the development of the project and solicited the presence of COFIDE in order to know more about the financing deal. Being satisfied with the presentation, we trust the in the near future all the financing will be raised in order to start the project.

Sixth: The community, as shareholders and partners with the Kuri Kullu S.A. Mining Company, supports the election of the new directorate of Minera IRL on 26th November to move forward and develop the Ollachea project. We underscore that the Rural Community of Ollachea is characterized by being always open to dialogue and public and private investment with full respect.

Ollachea, November 13th 2015

IKN340 back. The letter is then signed by four of the Ollachea community brass, including community president, vice-president and treasurer.

But that’s not all! My ground-level Ollachea source tells me that tomorrow Monday evening the community of Ollachea has convened an emergency meeting, at which the person or persons from the community who met with Jaime Pinto’s people last week in Lima without the knowledge of the wider town will be asked why he/they did such a thing. They will also explain to the general population what was going on behind the scenes when Pinto’s people handed out the leaflets on Wednesday November 11th. They will then take a town-wide vote on the position to be adopted by Ollachea regarding last week’s events and on anything that Team Hodges may try to say or do in order to pretend the community of Ollachea is fractured in its opinion. And once that’s all done we’re going to get another official letter from the people of Ollachea.

You want that in simple terms? Okay, it means that if Team Hodges wins the EGM vote, the mine at Ollachea will never be built. Ever. Short of sending in the army and evacuating the whole of the town’s population, at least. It’s impressive how these Team Hodges people ruin their relationships so rapidly with the Ollachea community, it’s almost as if they have something in common...

But irony aside, it’s difficult to put into words the rank stupidity of the way Team Hodges has treated and continues to treat the town of Ollachea but in the end it’s also going to be their downfall. What I believe has happened is that Team Hodges treats them as ignorant and pliable because that’s how they see other people, as mirrors of themselves. The reality is that Ollachea is populated by honest and intelligent people who see right through the deceitful members of our world.

Back in IKN337 I wrapped up that policy statement with a paragraph that included these words. It’s as true now as it was back then.

People, in the end I just want the mine to be built at Ollachea and my shares to go up. That’s the bottom line of all the bottom lines. You may be less supportive of Diego Benavides than I, but the plain fact is that the community at Ollachea has made its position crystal clear on this matter and that without Benavides heading up the project, there’s not going to be a mine built. Period.

Somehow and for some reason, people backing Team Hodges think that all they need to do is get rid of an Honorary Community Member of Ollachea, Diego Benavides, and that afterwards all their problems are over. It’s crazy. They’re crazy.