Ivernia West, the Irish mining company which transferred its domicile and primary stock market listing to Toronto last year, will spend $2.2 million (#2.37 million) to buy the 8.4 per cent of the Magellan lead prospect in Australia that it does not already own. The outstanding Magellan stake will be bought in two tranches, the first in early 2002 and the second when Magellan begins production.
Ivernia said yesterday that the final feasibility study on Magellan had indicated an internal rate of return of 76 per cent from the prospect. The final feasibility study indicated that the capital cost of developing a mine at Magellan will be $26.1 million. This will be funded 7030 between debt and equity by Ivernia.
Once in production, Magellan will have a nine-year mine life during which one million tonnes of lead ore will be produced. The ore will be processed on site and will produce 55,000 tonnes per annum of lead metal.
Meanwhile, Ivernia is to take a $25 million charge in its financial results for the year to the end of December 2000 as a result of additional capitalised costs associated with the delayed start-up of Lisheen and a revision to its life-of-mine plan. Various measures have been taken to improve the performance of the mine and according to Ivernia chief executive Mr David Hough these will allow Lisheen reach full production by mid-2001, with 160,000 tonnes of lead-zinc concentrate being processed from 1.5 million tonnes of ore per annum.
