BUSINESS
06/14/2011 12:17 EDT | Updated 08/14/2011 05:12 EDT

Ivernia Inc. First Quarter Report: Loss Doubles to $4.6M, Revenues Plummet After Shutdown Of Magellan Mine

CP

THE CANADIAN PRESS -- TORONTO - Ivernia Inc. (TSX:IVW) said its first-quarter loss more than doubled to US$4.6 million as revenues plummeted due to the temporary shutdown of its flagship Australian Magellan lead mine.

The Toronto-based company, which reports in U.S. dollars, lost one cent per share for the period ended March 31. That's unchanged from a year ago when the net loss was $1.9 million.

Revenues decreased to $5.6 million on sales of 2,500 tonnes of lead carbonate concentrate, compared to $11.2 million a year earlier.

Ivernia raised C$38 million in two private placements in January and May to provide working capital to fund Magellan Metals during the temporary shutdown of the Magellan Mine.

The mine shut after lead bearing mud was found on one of its shipping containers, raising environmental concerns.

Lead is a metal with a variety of industrial purposes, including in conventional car batteries, some types of paint, and formerly in gasoline. Its use was curtailed in many countries after lead-poisoning was linked to certain health problems.

Employment at the mine and office decreased to 30 from 250 before the shutdown.

A restart will be determined following an internal and Environment Protection Authority reviews on the extent of lead bearing mud.

The internal review is expected to be completed by the end of October, but a ramp up of operations would take more than three months.

The Magellan mine had been shut down for several years, beginning in 2007, over environmental concerns.

After getting permission from Australian authorities, Ivernia had been ramping up production at Magellan since February 2010.

On the Toronto Stock Exchange, Ivernia's shares fell to a new 52-week low, losing one cent of five per cent at 19 cents in morning trading.