All Dollar Amounts are in U.S. Dollars Unless Otherwise Indicated
Ivernia Inc. ("Ivernia" or the "Company") (TSX:IVW) today reported its second
quarter 2011 financial results. The Company recorded revenue of $5.7 million for
the second quarter of 2011, compared with revenue of $15.0 million for same
period last year as the Magellan Mine entered into care and maintenance during
the quarter.
The Company recorded a net loss of $2.9 million, or ($0.00) per common share,
for the second quarter of 2011 compared with a net loss of $19.5 million, or
($0.10) per common share for the same period last year.
2011 SECOND QUARTER HIGHLIGHTS
Financial
-- Raised C$20 million (net C$19 million) in a private placement in May
2011 to strengthen Ivernia's financial position generally and to provide
working capital to fund Magellan Metals during the care and maintenance
period of the Magellan Mine including the end-to-end review process.
-- Revenue of $5.7 million on sales of 2,900 tonnes of lead carbonate
concentrate.
-- 10,100 tonnes of lead carbonate concentrate inventory with a carrying
value of $8.6 million as of June 30, 2011.
-- Net loss of $2.9 million for the second quarter of 2011 or ($0.00) per
share.
Operational
-- On April 5, 2011, the Company announced that it had voluntarily ceased
all operations as a result of the detection of lead bearing mud on one
of its shipping containers. Subsequently lead bearing mud was detected
on a limited number of other containers.
-- Completed a safe and orderly shutdown of operations at the Magellan Mine
and put the operation on care and maintenance.
-- Exported all remaining lead carbonate concentrate that was in transit
along the transport route at the time of entering care and maintenance.
All remaining inventory is at the Magellan Mine.
-- Commenced an end to end review of the effectiveness of Magellan Metals'
risk management and compliance systems.
-- The Western Australian government section 46 review process, which will
determine the Magellan Mine's future operating conditions, remains
ongoing. Magellan Metals has made submissions to the OEPA with respect
to amendments to its operating conditions.
-- Completed a drilling program during the quarter at the Prairie Downs
exploration project confirming a large mineralized lead-zinc-silver
system and high grade zone in the Wolf prospect.
FINANCIAL AND OPERATING HIGHLIGHTS
The following table is a summary of Ivernia's financial and operating highlights
for the three months and six months ended June 30, 2011 and 2010:
Three months ended Six months ended
June 30 June 30
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2011 2010 2011 2010
(in thousands of United States
dollars, unless otherwise indicated
and per share amounts) $ $ $ $
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Financial Highlights
Revenue 5,713 15,014 11,309 26,255
Operating costs (12,183) (18,164) (24,884) (33,564)
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Gross loss (6,470) (3,150) (13,575) (7,309)
General and administrative (3,116) (2,146) (6,065) (3,973)
Severance costs (1,127) - (1,127) -
Share based compensation (18) (41) (36) (81)
Foreign exchange 7,109 (14,953) 10,134 (11,075)
Other income (expenses) (357) (470) 385 (690)
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Operating loss (3,979) (20,760) (10,284) (23,128)
Interest income 184 109 326 215
Interest expense (27) (1,309) (401) (2,606)
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Loss before tax (3,822) (21,960) (10,359) (25,519)
Income tax recovery 884 2,454 2,805 4,130
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Net loss (2,938) (19,506) (7,554) (21,389)
Unrealized loss on investments (75) (31) (73) (31)
Foreign currency translation
differences (2,418) 6,019 (3,023) 4,885
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Comprehensive loss (5,431) (13,518) (10,650) (16,535)
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Basic and fully diluted loss per
share(1) (0.00) (0.10) (0.01) (0.11)
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Weighted average shares outstanding
- thousands 617,139 189,243 613,339 188,892
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Cash used in operations before
changes in non-cash working capital (8,936) (4,834) (15,829) (11,676)
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Cash flow used in operating
activities (12,773) (1,885) (24,155) (734)
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Operating Highlights
Ore milled - (000's tonnes) 16 268 161 300
Average head grade - (% lead) 7.1 6.2 6.9 6.3
Recovery - (%) 71 69 73 67
Concentrate produced - (000's dry
tonnes) 1.3 17.5 12.7 19.5
Concentrate sold - (000's dry
tonnes) 2.9 13.3 6.8 21.8
Lead metal in concentrate produced -
(000's tonnes) 0.8 11.4 8.1 12.6
Lead metal in concentrate sold -
(000's tonnes) 1.9 8.6 4.4 14.0
Concentrate inventory - (000's of
dry tonnes) 10.1 6.3 10.1 6.3
Average lead price - LME cash
settlement - ($ per pound) $ 1.16 $ 0.88 $ 1.17 $ 0.95
Ivernia's average lead sale price -
($ per pound) $ 1.06 $ 0.81 $ 1.13 $ 0.87
Cash cost per pound sold - ($ per
pound)(2) N/A N/A N/A N/A
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(1) Per share data was calculated on the basis of the weighted average
shares outstanding (basic and diluted) for the relevant period
(2) Cash cost per pound sold is a non-IFRS measure. Cash cost of lead sold
is not currently meaningful as the Magellan Mine worked through the
issues surrounding the Order, transportation delays and then care and
maintenance during the first and second quarters of 2011. Upon the
restart of operations of the Magellan Mine and once the Magellan Mine
achieves steady state production run rates information about the cash
cost of lead sold will be reintroduced.
OPERATIONS REVIEW - MAGELLAN MINE
Ivernia restarted operations at the Magellan Mine in late February, 2010. A
ramp-up of operations took place throughout 2010. On December 31, 2010, Magellan
Metals received a stop order from the Acting Minister for Environment of Western
Australia (the "Stop Order") relating to the transport of lead carbonate
concentrate from the Magellan Mine. Transportation operations from the Magellan
Mine were immediately halted upon receipt of the Stop Order. The Stop Order was
replaced by a subsequent order issued on January 3, 2011 from the Minister for
Environment of Western Australia (the "Order") with respect to cessation of
transportation of lead carbonate concentrate from the Magellan Mine. Magellan
Metals stopped mining operations at the Magellan Mine commencing January 5, 2011
until February 23, 2011 when the Minister for Environment announced the lifting
of the Order. Following the lifting of the Order, Magellan Metals commenced a
ramp up of operations. On April 5, 2011, Magellan Metals announced that it had
voluntarily ceased transportation and operations as a result of the detection of
lead bearing mud on one of its shipping containers at the Port of Fremantle. On
April 7, 2011, the Company announced that it had commenced placing the Magellan
Mine on care and maintenance.
Production for the second quarter of 2011 relates to the first five days of
April prior to the operations being shutdown, together with concentrate
recovered during the orderly shutdown of the processing plant. During the second
quarter of 2011, the Company treated 16,000 tonnes of ore at a head grade of
7.1%. The Company recovered 71% of the lead to produce 1,300 tonnes of lead
carbonate concentrate at a grade of 63% containing 800 tonnes of contained lead.
At the time that the transport operations were stopped there were 10,100 tonnes
of concentrate on site at an estimated average concentrate grade of 64% lead,
containing approximately 6,450 tonnes of lead. This concentrate is now all
bagged and protected from the weather.
Principal activities during the second quarter of 2011 focused on placing the
Magellan Mine on care and maintenance, completing the transportation of lead
carbonate concentrate that was in transit from the Magellan Mine at the time of
cessation of operations, cleaning and removing empty containers from the mine
site, advancing the internal inquiry into the source and extent of lead-bearing
mud on containers and advancing the internal end-to-end review of its risk
management and compliance systems.
The Company cannot, at this time, provide any specific guidance on when the
Company will restart operations at the Magellan Mine. The Company believes that
Magellan Metals must complete its internal end-to-end review and the Office of
the Environmental Protection Authority of Western Australia ("OEPA") must
complete its inquiry and review of Magellan Metals' operating conditions
(discussed further below), before the Company will be in a position to provide
guidance on the expected timing for a restart of operations. The Company cannot
provide guidance on the timing for completion of the OEPA's Section 46 Review;
however, as previously announced, the Company currently expects to complete its
internal end-to-end review by the end of October 2011. As a result, the Company
does not expect to make a decision on the restart of operations until at least
that time. Upon making the decision to restart operations, the Company expects
that it would take greater than three months for a ramp-up of operations to be
completed with an expectation that the longer the Magellan Mine is on care and
maintenance the longer the ramp-up period that may be required.
The table below summarizes quarterly mine production, process plant production,
shipments and inventories for the quarter and year to date.
Three months Three months Six months
ended ended ended
March 31, 2011 June 30, 2011 June 30, 2011
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Mining
Ore mined - 000's tonnes(1) 150 24 174
Low grade ore mined - 000's
tonnes(2) 34 8 42
Total ore and waste mined -
000's bcm 264 52 316
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Processing
Ore milled - 000's tonnes 145 16 161
Average head grade - % lead 6.8 7.1 6.9
Average recovery - % 74 71 73
Concentrate produced - 000's
dry tonnes 11.4 1.3 12.7
Concentrate grade - % lead 64 63 65
Lead metal in concentrate
produced - 000's tonnes 7.3 0.8 8.1
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Sales and inventories
Concentrate sold - 000's dry
tonnes 3.9 2.9 6.8
Concentrate grade - % lead 64 65 65
Lead metal in concentrate sold
- 000's tonnes 2.5 1.9 4.4
Concentrate inventory - 000's
dry tonnes 12.6 10.1 10.1
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(1) Ore mined does not include low grade ore
(2) Low grade ore is 1.5 to 2.5% lead
Developments Related to the Magellan Mine since December 31, 2010
Ivernia restarted operations at the Magellan Mine in late February, 2010. A
ramp-up of operations took place throughout the year and mining and processing
operations continued to January 5, 2011, when a temporary shutdown described
below was commenced. Mining and processing operations recommenced following an
announcement by Ivernia of February 23, 2011 of the lifting of the Order and
continued until shortly after a further announcement by the Company on April 5,
2011, stating that all transportation had been voluntarily halted and an orderly
shutdown of operations had commenced.
In mid-December 2010, Magellan Metals met and advised the OEPA that an internal
review of data showed that lead from the Magellan Mine, in amounts above a
baseline trigger level, may have been identified within a small number of sealed
containers. The OEPA had requested additional information from Magellan Metals,
which Magellan Metals was prepared to meet in the timeline agreed with the OEPA.
However, on December 31, 2010, Magellan Metals received the Stop Order relating
to the transport of lead carbonate concentrate from the Magellan Mine.
Transportation operations from the Magellan Mine were immediately halted upon
receipt of the Stop Order. Magellan Metals received the Order on January 3,
2011, from the Minister for Environment of Western Australia, which replaced the
Stop Order received on December 31, 2010.
On January 5, 2011, due to uncertainty surrounding the timeline to recommence
shipments, Magellan Metals commenced a temporary shutdown of mining and
processing operations.
On January 10, 2011, in connection with the issuance of the Order, Magellan
Metals received notice of an investigation by the OEPA into Magellan Metals'
compliance with the operating conditions imposed on it under the Environmental
Protection Act 1986 of Western Australia (the "EP Act"), particularly in
relation to the reporting requirements for sampling results. The Managing
Director of Magellan Metals was interviewed by the OEPA on March 29, 2011 and
although there has been no further communication from the OEPA on the matter
since that date, the investigation is still considered open.
From January 5, 2011, to February 23, 2011, while operations were temporarily
shutdown, Magellan Metals worked collaboratively with the Government of Western
Australia and the OEPA on matters relating to the Order. On February 23, 2011,
the Minister for Environment announced that the independent review commissioned
by the OEPA had confirmed that no lead in container air samples exceeded the
baseline of 20 micrograms of lead per cubic meter and lifted the Order. Mining
and processing operations recommenced shortly after lifting of the Order on
February 23, 2011.
On February 23, 2011, with immediate effect, the Minister for Environment also
issued interim implementation conditions ("Interim Implementation Conditions")
that apply to the transport process from the Magellan Mine through, to, and
within the Port of Fremantle. The Interim Implementation Conditions legally
supersede (but, in some cases, simply amend and restate) the conditions in
Statement 559 (as amended by Ministerial Statement 783) and also include new
interim conditions on Magellan Metals.
During the January 5, 2011, to February 23, 2011, temporary shutdown, Magellan
Metals kept its employees on full pay and conditions in order to retain the
skilled workforce that had been amassed. This approach was successful with only
one resignation through that period due to the long term job uncertainty that
the situation created. This decision by Magellan Metals to retain the workforce
was recognized by the employees and generated significant loyalty and engagement
within the Magellan Metals team. During this period the Company took a similar
approach with its open pit mining contractor by making suspension payments to
ensure the availability of their resources at short notice for operations to
restart. As a result the operations at the Magellan Mine were able to quickly
restart once the Order was lifted.
During March 2011, Ivernia voluntarily delayed the resumption of regular
transport operations from the Magellan Mine, as a result of information received
by the OEPA suggesting some trains carrying containers with bagged lead
concentrate may not have travelled along the usual rail route from the Magellan
Mine to the Port of Fremantle. During this period the Company continued at full
production rates and stockpiled concentrate at the mine site. Magellan Metals
investigated this matter and was advised by its rail transport contractor (the
"Contractor") that between November 10, 2010 and January 4, 2011 ten trains
carrying a total of 159 containers with lead concentrate were routed by the
Contractor to the Port of Fremantle along a 12 kilometer rail line that is not
part of the usual rail route. The decision to divert trains was made by the
Contractor without Magellan Metals' approval or knowledge. Magellan Metals
believes that the diversion was made by the Contractor in an attempt to reduce
the volume of rail shipments into the Port of Fremantle which has had issues
with congestion in the past. Magellan Metals has received assurances from the
senior management of the Contractor that steps have been taken to prevent the
repeat of such a diversion.
Magellan Metals completed and received the results of a voluntary program of
soil sampling for lead analysis and isotopic testing along the 12 kilometers of
rail line that was not part of the usual rail route. The samples were submitted
to an independent, NATA accredited laboratory and the results showed no evidence
of the Magellan Mine's lead in the environment along the 12 kilometer route. On
March 17, 2011, Ivernia announced the resumption of regular transport operations
from the Magellan Mine.
On April 5, 2011, Ivernia announced that Magellan Metals had voluntarily halted
all operations at the Magellan Mine in Western Australia. Magellan Metals
isotopically tested a sample of dried mud from underneath a shipping container
that was transported from the Magellan Mine to the Port of Fremantle. The result
showed a high probability that some or all of the lead in the sample came from
the Magellan Mine. Magellan Metals immediately informed the OEPA.
Magellan Metals immediately and voluntarily ceased transportation and commenced
an internal inquiry into the source and extent of the mud found on the container
and disclosed that mud was observed on a small number of other containers. When
transportation was disrupted there were a total of 71 containers in transit in
four locations along the transport route. Consistent with previous sampling by
Magellan Metals, and by the OEPA at the Port of Fremantle, there is no
suggestion the source of the lead is from the bagged lead carbonate concentrate
within the shipping containers, which is consistent with previous sampling
results along the transport route, and there is no evidence of risk to public
safety or to the environment. Samples of the mud on the containers were sent for
isotopic testing which indicated a high probability of lead originating from the
Magellan Mine. The shipping containers with lead bearing mud have been cleaned
in accordance with a protocol approved by the OEPA, and the mud disposed of by a
licensed contractor in accordance with waste disposal requirements. The process,
approved by the OEPA, did not pose any risk to public health or safety. The last
of the 71 containers were exported in the first half of June 2011.
Magellan Metals is in the final stages of completing an internal inquiry on the
source and extent of the lead bearing mud. Magellan Metals believes that the
source of the mud, at least in part, resulted from the shipping containers being
placed on the ground following extremely wet weather conditions experienced in
central Western Australia in March 2011. The risk of dried mud becoming affixed
to the underside of a container and potentially containing traces of Magellan
lead was not fully appreciated at the time. As part of the internal inquiry to
date, additional controls and procedures have been identified that will prevent
a recurrence of such incidents. It is important to note that testing of 293
sample sites along the transport route following the incident has not identified
any lead of Magellan origin.
In April 2011, with the uncertainty surrounding the results of the mud on
containers described in detail above and what would be the third transportation
disruption since December 31, 2010, the decision was made to undertake an
end-to-end review of Magellan Metals' business practices before the
recommencement of transportation would resume. As such, the Magellan Metals
workforce commenced an orderly shutdown of operations and the mine was placed on
care and maintenance.
As part of care and maintenance, Magellan Metals undertook a process of
retrenchment of its work force. Magellan Metals followed an open and engaging
process with its workforce over the retrenchments and received generally
positive feedback both from those who were retrenched and those who were
retained. The selection process was designed to retain the required skills and
numbers to conduct the necessary care and maintenance work as well as the
projects required to return the project to operation. Prior to care and
maintenance, approximately 220 employees and contractors were employed at the
Magellan Mine and an additional 15 people in the Perth office. After the
retrenchments, there are approximately 20 people at the mine site and 10 people
at Perth office.
Since entering into care and maintenance, Magellan Metals has amended its open
pit mining contract (the "Amended Contract") to suspend the services of its
mining contractor at the Magellan Mine. The Amended Contract requires that
Magellan Metals pay non-refundable suspension and demobilization fees and
certain fixed costs to the mining contractor as part of suspending its services
during the care and maintenance period. These payments were made in July 2011.
Other than these fixed payments, there are no ongoing or periodical payments
under the Amended Contract. Pursuant to the Amended Contract, Magellan Metals is
permitted to reinstitute the services of the mining contractor following notice
of re- commencement of work. Magellan Metals has issued notices of force majeure
on all of its sales contracts with its lead concentrate customers. In connection
with other suppliers, Magellan Metals has reduced the level of goods and
services requirements in line with an operation on care and maintenance.
On April 7, 2011, Magellan Metals had a significant container inventory at the
mine site with the majority of these containers containing lead carbonate
concentrate in sealed two tonne bags. To avoid incurring additional demurrage
charges, Magellan Metals unloaded some of the containers and stored the bagged
concentrate at the mine site. This unloading process took place during the
months of April, May and June; 250 empty containers were returned to the Port of
Fremantle. Magellan Metals also purchased 144 containers that were on site for
bagged concentrate storage purposes. As at August 15, 2011, Magellan Metals
continues to hold significant bagged lead carbonate concentrate stockpiles at
the mine site of approximately 10,100 tonnes.
Since entering the care and maintenance period, Magellan Metals has commenced a
comprehensive end-to-end review of all its compliance activities and response
systems related to the Magellan Mine, including over the mining, processing,
transporting and management of lead carbonate production and export functions.
Magellan Metals' internal end-to-end review is being assisted by external
expertise, and will include assessing its risk management processes with a focus
on compliance with a broad range of legal obligations and commitments associated
with the operations and concentrate transportation. The objective is to prevent
an ongoing pattern of temporary disruptions to operations and to further reduce
risks associated with the wide range of potential events that can impact on
compliance with what the Company believes are the most stringent transport
conditions placed on any Western Australian mining operation. The Company
currently expects its end-to-end review to be completed by the end of October
2011.
Section 46 Inquiry and Review of Magellan Mine Operating and Transport Conditions
Pursuant to the EP Act, the Interim Implementation Conditions will remain in
place pending a full inquiry and review of Magellan Metals' operating conditions
by the OEPA pursuant to section 46 of the EP Act (the "Section 46 Review"). At
the conclusion of the Section 46 Review, the OEPA will provide recommendations
to the Minister for Environment. These recommendations may include further
changes and the permanent implementation of the Interim Implementation
Conditions. The full text of the Interim Implementation Conditions is posted on
the Magellan Metals website at www.magellanmetals.com.au.
As part of working with the OEPA on its Section 46 Review, Magellan Metals has
made submissions to the OEPA with respect to proposed amendments to the Health,
Hygiene and Environmental Management and Monitoring Programs and the Interim
Implementation Conditions. In May 2011, officers of the OEPA attended the
Magellan Mine site to observe how Magellan Metals receives, stores, loads and
washes containers to prevent concentrate and mud from leaving the site.
At the request of the Minister for Environment and as part of the Section 46
Review, Magellan Metals has provided the OEPA with its position with respect to
smelting lead into ingots. Magellan Metals' submissions summarized the factors
affecting refinery viability and the studies which Magellan Metals has completed
to date which have shown that it was not cost effective to smelt or refine
Magellan Metals' lead concentrate at the Magellan Mine. While the Company has
not changed its historical position with respect to the feasibility of a smelter
or refinery, the Company is conducting a new study into the viability of
downstream processing of its concentrates given the significant increase in
mineral reserves at Magellan, the changing lead concentrate market and improved
economic climate since the last review was completed in 2008. For greater
certainty, the Company can provide no guidance on the expected conclusions of
the study and the Company cautions readers not to draw any conclusions from
Magellan Metals' decision to conduct the study.
At this point in time, the Company cannot provide any guidance as to the time
for completion of the Section 46 Review and what changes, if any, will be made
to Magellan Metals' operating conditions as a result.
As mentioned above, the Company is continuing its internal, comprehensive,
end-to-end review of its risk management and compliance procedures to help
ensure that all Interim Implementation Conditions and any conditions resulting
from the Section 46 Review will be met from the time of the recommencement of
operations. The Company currently expects its internal end-to-end review to be
completed by the end of October 2011.
Ivernia Financings
On May 27, 2011, in connection with the Magellan Mine being placed on full care
and maintenance, the Company issued 93,370,682 Common Shares to Green SEA
Resources Inc. ("GSR"), a private Canadian company wholly owned by the Sentient
Group of Global Resource Funds, at a price of C$0.2142 per Common Share. GSR was
paid a commitment fee of C$1 million, which was deducted from the gross
proceeds, resulting in net proceeds of C$19 million ($19.4 million). The Company
received written consents from shareholders representing a majority of the
disinterested common shares of the Company (the "Consenting Shareholders") in
support of the private placement. These Consenting Shareholders owned or
controlled approximately 28.05% of the Company's total outstanding shares or
approximately 53.67% of the outstanding shares held by shareholders other than
GSR and its associates and affiliates. The Company approached a number of
institutional and accredited investors who were existing shareholders in the
Company with respect to participating in the private placement. While the
overall response from such persons was supportive of the private placement, and
contributed to obtaining a majority of minority approval, the Company did not
receive any commitments to participate in the private placement from such
investors within the necessary timeline. Immediately following the closing of
this private placement, GSR's reported ownership was 371,318,610 Ivernia Common
Shares, or 54.96% of the total issued and outstanding Common Shares of the
Company. The proceeds of the offering will be used to strengthen Ivernia's
financial position generally and specifically to provide working capital to fund
Magellan Metals during the care and maintenance period of the Magellan Mine
including the end-to-end review process.
Prairie Downs
Under the terms of an earn-in agreement announced by the Company on June 14,
2010 a wholly-owned subsidiary of Ivernia may acquire up to 80% interest in the
Prairie Downs zinc-lead-silver project in Western Australia (the "Prairie Downs
Project") from Australian Stock Exchange listed Prairie Downs Metals Limited
("PDML"). The Prairie Downs Project, located 60 kilometers ("km") southwest of
Newman in Western Australia, is located within 250 km of the Magellan Mine.
A second phase of drilling by the Company was completed in the second quarter of
2011. The drilling was targeted at the Wolf prospect and confirmed a large
mineralized system and high grade zone in the Wolf prospect. The second phase
drilling program consisted of 20 holes at the Prairie Downs Project including
four diamond drill holes for 1,282 meters ("m") and 16 reverse circulation
("RC") drill holes for 2,457 m. Drilling was completed at four targets; at the
"West Hyena", "Anomaly A" and "C7" prospects targeting geochemical and
geophysical anomalies, and at the Wolf prospect to follow up the initial success
of the first drilling program. Only one incidence of minor mineralization was
encountered outside of the Wolf prospect, at the C7 prospect, although the style
of mineralization at the West Hyena prospect indicates further potential along
strike.
The detailed results of the phase one and phase two programs are presented in
Ivernia's news release dated January 20, 2011 and June 15, 2011, respectively,
and filed on SEDAR at www.sedar.com and are also available at www.ivernia.com.
Expenditure is on-track with the expenditure program required under the terms of
Ivernia's earn-in agreement with PDML. In July 2011, PDML confirmed that Ivernia
had spent the initial minimum A$2 million expenditure as required under the
earn-in agreement.
Capital Resources and Working Capital Requirements
As at August 11, 2011, the Company had approximately $13 million in cash to fund
the care and maintenance activities at the Magellan Mine including the
completion of the end-to-end review. The Company expects to continue to have
negative cash flows during the care and maintenance period. These negative cash
flows may be offset by any revenue generated from the sale of stockpiled lead
carbonate concentrate at the Magellan Mine which the Company anticipates could
potentially commence shipping at some point after the completion of the Section
46 review and the end-to-end review, but not before. The Company anticipates
that with the realization of such stockpile sales at current metal prices of
approximately $2,300 per tonne and US$/A$ exchange rates of approximately $1.03
it would have sufficient working capital to withstand a care and maintenance
period (including completing the end-to-end review) for at least the next 12
months from the date hereof. However, even with the foregoing assumptions, the
Company cannot make any assurances that it will have sufficient working capital
on hand to cover any material additional or unforeseen costs incurred in
restarting the Magellan Mine, if and when a restart decision is made. As a
result, the Company may still require additional financing during this twelve
month period.
Management's Discussion and Analysis and Consolidated Financial Statements
Ivernia's unaudited financial statements and management's discussion and
analysis for the quarter ended June 30, 2011 were filed today and will be
available on the Ivernia website at www.ivernia.com or SEDAR at www.sedar.com.
About Ivernia
Ivernia is an international base metal mining company and the owner of the
Magellan Mine, located in Western Australia.
Ivernia trades under the symbol "IVW" on the Toronto Stock Exchange. Additional
information on Ivernia is available on the Company's website at www.ivernia.com
and at SEDAR at www.sedar.com.
Forward-Looking Statements
Certain statements contained in this press release constitute forward-looking
information within the meaning of securities laws. All statements included
herein (other than statements of historical facts) which address activities,
events or developments that management anticipates will or may occur in the
future are forward-looking statements, including statements as to the following:
the duration of the suspension of the Company's transportation of lead carbonate
from the Magellan Mine, the duration of the period of care and maintenance
commenced in April 2011, future targets and estimates for production, capital
expenditures, operating costs, cash costs, mineral resources, mineral reserves,
life of mine, recovery rates, grades and prices, business strategies and
measures to implement such strategies, competitive strengths, estimated goals
and plans for Ivernia's future business operations, lead market outlook and
other such matters. Forward-looking statements are often, but not always,
identified by the use of words such as "seek", "anticipate", "contemplate",
"target", "believe", "plan", "estimate", "expect", and "intend" and statements
that an event or result "may", "will", "can", "should", "could" or "might" occur
or be achieved and other similar expressions. These statements are based upon
certain reasonable factors, assumptions and analyses made by management in light
of its experience and perception of historical trends, current conditions and
expected future developments, as well as other factors management believes are
appropriate in the circumstances.
However, whether actual results and developments will conform with management's
expectations is subject to a number of risks and uncertainties, including
factors underlying management's assumptions such as, the duration of the
suspension of the Company's transportation of lead carbonate from the Magellan
Mine, the duration of the period of care and maintenance commenced in April
2011, risks relating to the operations being placed on care and maintenance, the
need for additional financing, matters relating the restart of mining and
milling operations, matters relating to ramping up mining and milling throughput
and operations, regulatory compliance and approvals, metal price volatility,
lead carbonate concentrate treatment charges, exchange rates, regulatory
proceedings and litigation, the fact that the Company has a single mineral
property, resources and reserves, health and safety, environmental factors,
mining risks, metallurgy, labour and employment regulations, government
regulations, insurance, dependence on key personnel, constraints on cash flow,
the nature of mineral exploration and development, matters related to the order
to cease transport of lead concentrate and matters relating generally to the
transportation of lead carbonate; presence of a majority shareholder; matters
related to the Esperance settlement and shipments through the Port of Fremantle;
implications stemming from the Esperance inquiry; and common share price
volatility and the dilution of the Company's Common Shares. Additional factors
and considerations are discussed in the Company's MD&A for the interim period
ended June 30, 2011 and in other documents filed from time to time by Ivernia
with Canadian securities regulatory authorities. While Ivernia considers these
assumptions to be reasonable based on information currently available to it,
they may prove to be incorrect. These factors may cause the actual results of
the Company to differ materially from those discussed in the forward-looking
statements, and there can be no assurance that the actual results or
developments anticipated by management will be realized or, even if
substantially realized, that they will have the expected results on the Company.
Undue importance should not be placed on forward-looking information nor should
reliance be placed upon this information as of any other date. Except as
required by law, while it may elect to, Ivernia is under no obligation and does
not undertake to update this information at any particular time.
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