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The latest Minera IRL SA (Team Benavides) news release

Gotta love this one. Team Benavides returns the criminal charge stupidities to Team Hodges, with interest.


Regarding the request for a criminal investigation by Minera IRL Limited

Lima, 18 November 2015: In response to the news release from Minera IRL Ltd dated today, November 17th 2015, Minera IRL S.A. states the following:

The Board of Directors of Minera IRL Ltd today announced that it has filed a request for a criminal investigation against Diego Benavides and others in relation to the US$70m bridge credit agreement with COFIDE
- The Public Ministry of Peru (El Ministerio Publico del Perú), the authority charged with receiving and formalizing charges in order to determine if there has been a crime committed, has begun the process of evaluation of the alleged criminal charges.

-          The announcement of the Board of Directors shows its interest in unduly influencing shareholder opinion with just nine days to go before the Extraordinary General Meeting (EGM), to be held on November 26th 2015. 

-          Regarding the events described in the alleged charges, the recent actions by Mr Jaime Pinto, non-executive chairman of Minera IRL Ltd, are designed to create division and unrest in the Community of Ollachea and to discredit COFIDE. 

-          Why is there such interest to create divisions in the Community of Ollachea or to discredit COFIDE? These are questions that shareholders should ask the current Board of Directors.

Regarding the Bridge Loan from COFIDE, we state the following:

-          COFIDE is the State Development Bank of Peru, has assets of over US$3.5Bn and has participated in the financing of many public sector and private sector projects. Examples include US$715m to electricity generating projects and the North Peru Gas Pipeline, US$445m for road and transport projects, US$115m to mining and agricultural projects, US$97m to water and shipping port projects, among others.

-          COFIDE is the only public institution in Peru that has been recognized for three consecutive years by the Lima Stock Exchange (Bolsa de Valores de Lima (BVL)) for its excellence in corporate governance.

-          The agreement between Minera IRL SA and COFIDE was signed on June 5th 2015 after due diligence of 14 months, in which Goldman Sachs participated.  Sherpa was also subject to extensive due diligence by COFIDE and by Goldman Sachs before the deal was approved.
-          Minera IRL SA contracted Sherpa due to the extensive experience of Jose Cabia, a well recognized, long standing member of the Peruvian financial community and member of the Lima Stock Exchange (BVL).
-          Sherpa is a legally constituted Company that acted as financial advisor consulting to Minera IRL SA, the Peruvian subsidiary.  Sherpa was not contracted to the parent company, Minera IRL Ltd, as COFIDE does not fund foreign companies.  Sherpa’s services were required in order to set up the bridge loan between Minera IRL SA and COFIDE in order to finance the Ollachea Project.
-          All parties, including Minera IRL Ltd under Daryl Hodges and Goldman Sachs, were satisfied that the fee for the structuring agent was fair given market conditions. 
-          The finance agreement was approved by the Board of Directors of Minera IRL Ltd and signed off by Mr. Daryl Hodges, ex-Executive President of the company, who despite not having participated actively in the process and only having been named Executive President in March 2015, awarded himself a bonus commission of up to US$250,000 for the conclusion of the final US$240m credit agreement.

-          With the US$70m Bridge Loan Agreement, Minera IRL Ltd avoided bankruptcy as it allowed the Company to pay its US$30m debt with Macquarie Bank due on June 30th 2015.
-        The bridge loan funds were also used to pay the US$12m owed to Rio Tinto, the main shareholder of the company.

The financing deal was fully approved at the time.  It is only now, with one week to go before an EGM in which the current Board of Directors fear for their positions, that the Board raises objections to the deal it had previously approved.  

For further information please go to: