News

June 11, 2009

What Courtney Chamberlain Did Next: Minera IRL Marches On

By Alastair Ford

Shares in Minera IRL hit an all time high of 79p at the end of May, after the Latin American-focused miner issued an update on mine-life and production at its Corihuarmi mine in Peru. When you consider that this is the company that was the best performing of all the London-listed miners in 2008, such a strong performance in the first half of 2009 almost takes your breath away. How long can such a spectacular run last? The answer to that question may be: a while yet. One real test that can ascertain the depth of market support is to raise money through the issue of equity on the back of good news. Subsequent discounting in response to dilution and the general increased availability of shares gives an indication of how little, or how much leeway, a market is prepared to offer a company.

So it was a fascinating moment when, shortly after issuing the update on Corihuami, Minera IRL raised US$15 million at 67p per share, roughly the level at which the company’s shares were trading before the update, but at a clear double digit percentage discount by the time the placing was announced, approximately two weeks later. What happened was that the market didn’t bat an eyelid. On the day of the announcement of the placing the shares dipped a modest penny or so, which could have...