Ivernia to raise $1.95m

Ivernia West, the Irish mining firm now listed in Toronto, plans to issue convertible notes to raise up to $1.95 million (€1.99 million) for general corporate purposes.

The notes, which will be underwritten by its 15 per cent shareholder Resources Investment Trust, will mature in three years.

"Ivernia is very pleased to have the support of one of its major shareholders in underwriting these notes, which are convertible at a level significantly above the current share price," said Ivernia's chief executive, Mr David Hough.

He said Resources Investment Trust would probably buy some of the notes, while there were a number of new investors interested in coming on board.

The trust will also receive a fee equal to 5 per cent of the gross proceeds of the convertible notes, to be paid in Ivernia shares. As a result, Resources Investment Trust's stake in Ivernia will increase further, although Mr Hough said it was not interested in a takeover and would not exceed the 25 per cent level that would lead to an offer.

The notes, which bear interest at a rate of 10 per cent, can be converted into common shares of Ivernia at a price of $0.065 at any time on or before maturity. Each note also carries a warrant for one share, exercisable at $0.065 up to December 31st, 2003. If all the warrants are exercised, this would raise a further $1.95 million.

Meanwhile, the company said it had carried out completion tests to determine how well its Lisheen zinc mine was performing. The rates achieved over the past three months were equivalent to processing more than 1.65 million tonnes per annum, 10 per cent above the original design capacity.

Mr Hough said he believed a key turning point had arrived for Ivernia. "Having had to report many setbacks and disappointments at Lisheen over the past three years, it is a remarkable turnaround that the completion test parameters have been satisfied so emphatically," he said.

The mine was making an operating profit, although once banking costs were factored in it was loss-making, he said.

However, he was hopeful that by the end of the year there would be an uplift in the US economy, which should have a positive effect on zinc prices.