Minera IRL Limited T.IRL

News Out! Company has no Control over Gold Sales

[battleready]

LIMA, PERU--(Marketwired - Oct 21, 2015) - Minera IRL Limited ("Minera IRL" or the "Company") (MIRL.L)(MIRL.L)(IRL.TO) provides the following corporate and operational update. Gold sales The Company has to date used offtake arrangements whereby the proceeds from its gold produced at the Corihuarmi mine have been paid into a Jersey bank account operated by Minera IRL, a company incorporated in Jersey, via a Swiss refiner. This has allowed the Company to maintain full control of the proceeds from gold sales which can then be disseminated down to its operating subsidiaries as required. However, due to recent efforts by Mr. Diego Benavides, the former interim CEO of the Company, in his role as President and General Manager of the Company's Peruvian subsidiaries, to amend the existing offtake arrangements such that the proceeds from the sale of gold are directed straight to the Peruvian subsidiaries, the Company's existing offtaker has suspended receipt of shipments of gold in dor for refining and sale. Furthermore, the Company believes that Mr. Diego Benavides may be seeking alternative solutions for the sale of gold dor produced from the Corihuarmi mine, which would likely involve the proceeds being transferred directly to the Peruvian subsidiaries. The Company believes 1,070 ounces of gold are currently held in dor form which would be shipped for refining and sale. A further 1,000 ounces are expected to be capable of shipment shortly. The Company currently has no control over the counterparty for its gold sales from the Corihuarmi mine and is unable to specify the recipient of the proceeds. As previously announced, the Company is in the process of dismissing Mr. Diego Benavides from his role as President and General Manager of the Company's two Peruvian subsidiaries. This process is expected to take several months under Peruvian corporate law. Working capital As announced on 21 September 2015, the Company has significant working capital constraints caused primarily by recent lower gold prices adversely affecting the profitability of the Company's low-grade Corihuarmi mine, which has been in operation since 2008, but is nearing the end of its mine life. Furthermore, under the existing US$70 million bridge loan structured by the Peruvian state-owned development and promotion bank, Corporacin Financiera de Desarrollo S.A. ("COFIDE"), funds are not permitted to be used for general corporate working capital purposes. The Company has so far been unsuccessful in its attempts to reach an agreement with COFIDE pursuant to which the funds can be used for this purpose. Due to the Company's limited existing cash resources and the possibility that it will not receive the proceeds of near term gold sales, the Company expects that it may have difficulty meeting its obligations as they fall due until appropriate control of the Peruvian subsidiaries is re-established. In addition, the Company has limited visibility as to the financial position of the Peruvian subsidiaries. Consequently, the directors are considering the solvency of the Company as a whole and a further announcement will be made in due course. EGM requisition Pursuant to the announcement on 9 October 2015, the Company will shortly be convening an Extraordinary General Meeting (EGM) as requisitioned by a group of shareholders (the "Proposing Shareholders"). The Proposing Shareholders are seeking to requisition an EGM to consider special resolutions to appoint six new directors: Messers. Leonard Harris, Julian R. lngham, Diego Benavides, Jorge L. Ramos, Frank S. O'Kelly and Jesus A. Lema and to remove Messers. Robin Fryer, Douglas Jones and Jaime A. Pinto as directors of the Company. If successful, this would have the effect of removing all of the independent non-executive directors and replacing them with six appointees of the Proposing Shareholders. The circular convening the EGM will include the reasons for which the Proposing Shareholders have requisitioned an EGM as well as the directors' robust responses to these matters.

[battleready]

Mistake: IRL has Control of Gold Sales