Minera IRL Ltd Announces Upgraded Resource Estimate at the Don Nicolas Project

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LONDON, UNITED KINGDOM and TORONTO, ONTARIO--(Marketwire - Nov 21, 2012) - Minera IRL Limited (Minera IRL or the "Company") (IRL.TO) (MIRL.L) (MIRL.L), the Latin American gold mining company, is pleased to announce an upgraded resource estimate following step-out, extension and infill drilling at the Martinetas Vein Field, Don Nicolas Project, Santa Cruz Province, Argentina. The Don Nicolas Project has been permitted and is advancing toward development.

Highlights:

  • Highly successful resource upgrade at Martinetas in which gold-silver quartz vein envelopes surrounding the three main sub-parallel vein zones, Cerro Oro, Coyote and Lucia have now merged into one mineralized domain.

  • Measured and Indicated Resources have increased by 23% to 468,000 ounces of gold, an increase of 87,000 ounces compared to the resource published in 2011.

  • Inferred Resource has increased 14% to 165,000 ounces of gold, an increase of 20,000 ounces.

  • The increase in Measured and Indicated Resource is expected to extend the mine life of the Don Nicolas Project, which continues to move toward development. In addition, a substantial increase in the low grade category provides the catalyst for completing a heap leach feasibility study in 2013.

  • High potential for further resource additions.

"We are delighted with the results of our 2012 resource drilling programme which not only extended the Martinetas vein field but has demonstrated significant potential for future growth." said Courtney Chamberlain, Executive Chairman of Minera IRL. "The increased resource and merging of the three principal vein zones has important economic implications. These include extending the mine life of Don Nicolas and providing a strong incentive to complete a heap leach feasibility study in 2013 aimed at treating the lower grade material. This lower grade will be mined in conjunction with the high grade mill feed and a successful parallel heap leach circuit has the potential to significantly increase low cost gold and silver production with modest additional capital requirement."

The latest resource estimate supersedes the previous announcement in 2011. The 2012 resource drilling has added to the database 173 new drill holes and 16 extension drill holes with a combined total of 18,640 meters. Estimation techniques and parameters have not altered and the same 0.3g/t lower gold cut-off grade has been applied.

Two large epithermal vein field districts, La Paloma and Martinetas located approximately 40km apart, make up the Don Nicolas Project. The 2012 Martinetas drill programme expanded the gold-silver quartz vein envelopes surrounding the three main sub-parallel vein zones, Cerro Oro, Coyote and Lucia demonstrating high potential for mining these zones from one large open pit. These vein systems are open-ended to the south-west and at depth. Also at Martinetas, in September 2012 a new discovery was announced at Choique located only 1.6km from the proposed Don Nicolas plant site. Whilst the resource, at this stage, is modest the setting along the flanks of a rhyolite dome indicates excellent potential to expand this resource with further drilling.

Although no drilling was conducted at La Paloma in 2012, recent target generation studies have identified several highly prospective areas where brownfields drilling is now planned for 2013.

The following table summarizes the 2012 Don Nicolas resource estimate.

      Measured + Indicated Resource Inferred Resource
District
Deposit
Lower
Au

Cutoff
(g/t)
Tonnes
(kT)
Au
(g/t)
Au
(kOz)
Ag
(g/t)
Ag
(kOz)
Tonnes
(kT)
Au
(g/t)
Au
(kOz)
Ag
(g/t)
Ag
(kOz)
La Paloma Sulfuro1 0.3 1,192.3 4.5 171.9 16.1 617.3 535.0 1.2 20.6 5.4 92.5
1.6 498.4 9.2 147.2 28.1 450.2 47.3 7.0 10.7 18.7 28.4
Ramal Sulfuro3 0.3           134.8 1.9 8.3    
1.6           58.5 2.7 5.1    
Rocio3 0.3           89.2 4.1 11.9    
1.6           89.2 4.1 11.9    
Arco Iris1 0.3 36.8 1.7 2.1 2.2 2.6 262.4 2.3 19.4 2.1 17.5
1.6 18.0 2.4 1.4 2.8 1.6 164.0 3.0 15.7 2.5 13.2
Martinetas 
Cerro Oro, Coyote, Lucia2 0.3 7,002.0 1.2 270.6 3.6 812.9 2,416.8 1.1 83.4 3.8 293.1
1.6 1,090.8 3.7 131.0 5.8 201.4 308.7 3.6 35.7 6.3 62.6
Armadillo1 0.3 271.7 2.2 19.2 3.8 33.1 186.9 1.4 8.3 3.3 19.7
1.6 111.8 4.6 16.4 5.9 21.0 45.7 4.1 6.1 5.7 8.4
Choique1 0.3 84.3 1.6 4.4 17.7 48.0 389.2 1.0 11.9 6.6 82.6
1.6 40.5 2.9 3.8 17.9 23.2 85.0 2.8 7.7 9.3 25.5
Calafate1 0.3 4.0 3.2 0.4 10.8 1.4 3.4 5.8 0.6 11.7 1.3
1.6 4.0 3.2 0.4 10.8 1.4 3.4 5.8 0.6 11.7 1.3
 TOTAL All Resource 0.3 8,591.1 1.7 468.6 5.5 1,515.3 4,017.8 1.3 164.5 3.9 505.3
Plus 1.6g/t Cut-off 1.6 1,763.5 5.3 300.2 12.3 698.9 713.4 4.2 96.0 6.8 155.2
1 Ordinary Kriged Estimate
2 Multiple Indicator Kriged Estimate -with a Change of Support to an SMU block (5mE x 2mN x 2.5mRL)
3 Rocio and Ramal were not estimated by Coffey Mining. This Inferred Resource (gold only) is as previously reported by Hidefield in 2009 as estimated by Runge. Ramal was estimated by Runge but not included in the Hidefield estimate.

The resource estimation methodology applied to each vein system was appropriate for the particular mineralized deposit. Ordinary Kriging (OK) was used for the La Paloma deposits, as well as Armadillo, Choique and Calafate at Martinetas. No mine dilution was included in the resource estimate for these deposits. For Coyote, Cerro Oro and Lucia, the Multiple Indicator Kriging (MIK) method was considered more appropriate. This method includes dilution for an assumed mining scenario and Selective Mining Unit (SMU).

The new resource estimate at Martinetas is compared with the 2011 estimate in the following table. Of particular note is the increase in the potentially heap leachable resource to over 6 million tonnes at a grade of 0.7g/t Au.

      Measured + Indicated Resource Inferred Resource
District
Resource
Lower Au
Cutoff (g/t)
Tonnes
(kT)
Au
(g/t)
Au
(kOz)
Ag
(g/t)
Ag
(kOz)
Tonnes
(kT)
Au
(g/t)
Au
(kOz)
  Ag
(g/t)
Ag
(kOz)
Martinetas 2012 1.6 1,247.1 3.8 151.6 6.2 247.0 443.0 3.5 50.1   6.9 97.8
2011 1.6 944.1 4.3 131.2 5.9 178.5 384.5 4.2 51.4   6.3 77.8
Difference   303.0 2.1 20.4 7.0 68.5 58.5 - (1.3 ) 10.7 20.0
                         
2012 0.3 - 1.6 6,114.9 0.7 143.1 3.3 648.4 2,553.4 0.7 54.2   3.6 298.8
2011 0.3 - 1.6 3,464.9 0.7 76.3 3.1 348.1 1,662.5 0.6 33.3   3.0 158.8
Difference   2,650.0 0.8 66.8 3.5 300.3 890.9 0.7 20.9   4.9 140.0
                         
2012 0.3 7,362.0 1.2 294.7 3.8 895.4 2,996.3 1.1 104.3   4.1 396.6
2011 0.3 4,409.0 1.5 207.5 3.7 526.6 2,047.0 1.3 84.7   3.6 236.7
Difference   2,853.0 1.0 87.2 4.0 368.8 949.3 0.6 19.6   5.2 160.0

Preliminary metallurgical testing at the Ammtec Metallurgical Laboratory in Perth, Western Australia on low grade trench composites from Martinetas is encouraging and confirms that the ores are amenable to heap leaching techniques. Column leach tests have yielded gold extractions up to 73%. Whereas fairly fine crushing appears to be required, agglomeration has not been needed and reagent consumption is modest. Planning is progressing for an expanded test programme during early 2013 with the objective of completing a feasibility study on heap leaching during the second half of 2013.

The Martinetas and La Paloma districts are contained within a very large tenement holding of approximately 260,000 ha which host numerous precious metal occurrences, such as Microondas and Escondido, which provide further targets. For example, Escondido, discovered in 2010 by Minera IRL Patagonia approximately 35km to the north - west of Martinetas, hosts both high grade veins and bulk tonnage mineralization. Microondas, only 10km west of Martinetas, is hosted in a rhyolite dome and has historical good grade gold drill intersections. These and other deposits will be assessed for future feed to the Don Nicolas processing facilities.

With the recent approval of the Don Nicolas Environmental Impact Assessment and the granting of the Development Permit, the Company is investigating financing options and also completing plans to commence detailed engineering early in 2013. The objective is to commence production by early 2014 at Don Nicolas to produce an average of 52,000 ounces of gold and 56,000 ounces of silver per year from open pit mining and treatment by conventional processing techniques.

Resource Estimate Authorship and Methodology

The resource estimate was prepared by Mr Doug Corley, Member of the Australian Institute of Geoscientists, Associate Resource Geologist in Resource Modelling with Coffey Mining Pty Ltd. Doug Corley is recognized as a Qualified Person for the purposes of National Instrument 43-101.

On the basis of the confidence levels of the key criteria that were considered during the resource estimation, the mineral resource estimates provided in this press release have been classified and reported in accordance with CIM guidelines and National Instrument NI.43-101.

Including the 2012 drilling, the database used in this re-estimate now totals 545 drill holes for 44,620 meters plus 104 trenches for 7,807 meters. The resource estimates apply a 0.3g/t gold bottom cut for the global resource and a 1.6g/t bottom cut to provide the high grade component. Top cutting was applied as appropriate for each of the vein systems.

Mr Doug Corley conducted two field visits to the project site where he had the opportunity to interact with project geologists and related staff and to study the geology and associated mineralization in order to become familiar with the geological demeanour as well as continuity of grade distribution inherent to the Don Nicolas deposits.

Resource estimation methodology included completion using Ordinary Kriging or the Multiple Indicator Kriging method, whichever was the most appropriate.

Competent Persons Statement

The preparation of the technical information contained herein was supervised by Donald McIver, VP Exploration of the Company, MSc Exploration and Economic Geology, a Fellow of the Australian Institute of Mining and Metallurgy (FAUSIMM), as well as the Society of Economic Geologists (FSEG), who is recognized as a Qualified Person for the purposes of National Instrument 43-101, and who has reviewed and approved the technical information in this press release.

Conference Call

Following the release, Minera IRL plans to host a conference call at 10:00 am Toronto (EDT), 3:00 pm UK (BST), 10:00 am Lima (PET) on November 21, 2012. To participate in the call please dial:

Toll Free (North America): 866-696-5910
Local Toronto and International: 416-340-2217
Global: 800-8989-6336
Participant passcode: 3309410

A live webcast and archive will be available at: http://www.gowebcasting.com/4020

REPLAY:

Dial-in numbers: 905-694-9451 / 800-408-3053
The replay is available till November 28th, 2012
Passcode: 6727232

Minera IRL Limited is the AIM traded, TSX and BVL listed holding company of precious metals mining and exploration companies focused in Latin America. Minera IRL is led by an experienced senior management team with extensive industry experience, particularly operating in South America. The Group operates the Corihuarmi Gold Mine and the advanced gold projects Ollachea in Peru and Don Nicolas in Argentina. For more information, please visit www.minera-irl.com.

Some of the statements contained in this release are forward-looking statements, such as estimates and statements that describe the Company''s future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggestions herein. Except as required by applicable law or regulation, Minera IRL Limited does not intend to update any forward-looking statements to conform these statements to actual results.

Quality Assurance and Quality Control Procedures Disclosure

The Company has implemented and maintains a Minera IRL quality assurance/quality control (QA/QC) protocol on the Ollachea Project to ensure best industry practice in sampling and analysis of exploration and resource drill core samples. The insertion of field duplicates, certified standards and blank samples into the sample stream form part of the MIRL procedure (these act as an independent check on contamination, precision and accuracy in the analytical laboratory).

Assay results are reported once rigorous QAQC procedures have been approved.

Independent Audit Programs

Towards maintaining compliancy with international standards as they pertain to the minerals industry resource evaluation and estimation procedure, MIRL regularly contracts the services of industry experts to conduct detailed audits of established QAQC procedures.

Contact:
Minera IRL Limited
Trish Kent
Vice President, Corporate Relations
+511 418 1230
Canaccord Genuity Limited
(Nominated Adviser & Broker, London)
Adam Miller
+ 44 (0)20 7523 8350
finnCap (Co-broker, London)
Geoff Nash
Corporate Finance
+ 44 (0)20 7600 1658
finnCap (Co-broker, London)
Matthew Robinson
Corporate Finance
+ 44 (0)20 7600 1658
finnCap (Co-broker, London)
Joanna Weaving
Corporate Broking
+ 44 (0)20 7600 1658
RBC Europe Ltd (Co-broker, London)
Stephen Foss or Martin Eales
+44 (0)20 7653 4000
Buchanan (Financial PR, London)
Bobby Morse or Gordon Poole or Louise Mason
+44 (0)20 7466 5000
Hill+Knowlton Strategies (PR, Toronto)
Rick Harari
+1 416 413 4766

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