Ivernia nets €111m on sale of stake in Lisheen zinc mine

Exploration group Ivernia West has sold its 50 per cent interest in Lisheen zinc mine to South African conglomerate Anglo American in a deal valued at $125 million (111 million).

Anglo American, which holds the other 50 per cent of the Co Tipperary mine, is buying all Ivernia subsidiaries that hold an interest in Lisheen.

It has agreed to pay $1.8 million in cash and to assume all the Irish company's debts associated with the development, including loans of $73.2 million to Ivernia Lisheen Finance Ltd. It is understood the deal will cost the company about $125 million.

Lisheen mine produces lead and zinc ore and includes a milling facility that can process 1.5 million tonnes of ore a year. Development began in 1994 and reached full production in the second half of 2001. The mine employs 300 people. Ivernia's chief executive, Mr David Hough, said yesterday that no jobs would be affected by the deal. "Anglo is simply consolidating its interests in Lisheen. The agreement will not make any difference to operations," he said.

Ivernia, which is quoted on the Toronto Stock Exchange, also reported a net loss of $560,000 for the first quarter of 2003, compared with a $1.41 million loss during the same period last year. Its net loss per share was zero, compared with $0.01 last year.

It generated $774,000 net from investing activities, compared with €520,000 during the same period in 2002. Financing activities during the quarter generated $604,000 net, less than half the return of $1.23 million in 2002.

At the end of March, it had a working capital deficiency of $24.61 million, slightly down on its December 31st shortfall of $24.74 million.

Its cash balance was $89,000, but this had increased to $1.25 million by the end of June, mainly as a result of raising cash to finance its involvement in the Magellan lead deposit in Western Australia.