Interim Results

Date : 09/30/2011 @ 2:00AM
Source : UK Regulatory (RNS & others)
Stock : Minco (MIO)
Quote : 2.65  0.0 (0.00%) @ 1:39AM
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Interim Results

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Minco PLC

30 September 2011

Minco Reports Interim Results for the Six Months Ended 30 June 2011

Dublin, 30 September 2011 - Minco Plc (AIM/MIO), the AIM quoted exploration and development company is pleased to report its interim results for the six month period ended 30 June 2011.


Minco is involved in exploration and development activities in Ireland at its Pallas Green zinc-lead project, a Joint Venture with Xstrata Zinc, and in exploring and developing silver and zinc projects in Central Mexico through its 29.0 per cent. shareholding in Xtierra Inc. (Toronto Stock Exchange TSXV/XAG).

The Pallas Green Project

Minco holds a 23.6 per cent. interest in the Pallas Green zinc-lead exploration project, near Limerick, Ireland, with Joint Venture partner, and project Manager, Xstrata Zinc, one of the world's largest zinc production companies.

Minco announced on 13 July 2011 that it had entered into a conditional agreement, subject to approval of Minco shareholders and receipt of other regulatory approvals and consents, for the sale of Minco's interest in the Pallas Green Project to Xstrata for a cash payment of US$19.4 million. The proposed sale is subject to a number of conditions, including satisfactory due diligence by Xstrata, approval by the Board of Xstrata Zinc, approval by Minco's shareholders and receipt of other regulatory approvals and consents.

An Extraordinary General Meeting of the Company is being convened for 11:00 a.m. on 24 October 2011 at the D4 Ballsbridge Court Hotel, Ballsbridge, Dublin 4, Ireland, for the purpose of considering and if considered appropriate, approving the sale.

For the year 2011, Xstrata Zinc proposed a EUR13 million (US$18 million) budget comprising additional exploration and infill drilling as well as a pre-feasibility study. The pre-feasibility study and related costs are budgeted at about EUR3 million, while the proposed EUR10 million drilling programme is split about two thirds infill definition drilling and one third exploration drilling.

Minco has not agreed to this proposed 2011 programme and budget and particularly to the allocation between infill/definition and exploration drilling. Minco has contributed US$648,000 (EUR450,000) of the 2011 exploration costs but, due to the absence of agreement on the 2011 programme and budget, has not paid all of its cash calls made by Xstrata for 2011.

Discussions with Xstrata on the resolution of the technical aspects and direction of the proposed 2011 work programme have been ongoing during 2011. These discussions eventually evolved into a proposal by Xstrata to purchase Minco's interest in the Joint Venture. Further negotiations led to a conditional agreement for the sale by Minco to Xstrata of all of Minco's interest in the Pallas Green Joint Venture for a consideration of US$19.4 million.

In the event shareholders do not approve the sale at the EGM and Minco continues to participate in the Joint Venture, it will need to raise additional funding. In order to fully participate in the 2011 programme, as proposed by Xstrata, Minco would be required to finance an additional EUR2.6 million plus a further amount for working capital. If the Company does not participate in some or all of the proposed 2011 programme, or subsequent programmes, the Company's interest in the Pallas Green Joint Venture will be diluted.

Minco has the option not to contribute to any further work programmes at Pallas Green and allow its participating interest to be diluted as Xstrata contributes 100 per cent. of the budget expenditures. According to the dilution formula in the Joint Venture Agreement, Minco's participating interest would be diluted to approximately 16.25 per cent. by the end of 2011 and to approximately 8.36 per cent. by the end of 2013 (based on estimated budgets for 2012 and 2013). At the point at which Minco's participating interest reaches 5 per cent., it would be ceded to Xstrata and Minco would then have carried a 15 per cent. net profits interest from production in eight of the ten Prospecting Licenses. Minco would not have carried a 15 per cent. interest in Licenses 3268 and 3647 as such interest is held by Cominco (now Teck).

Should Shareholders not vote in favour of the disposal at the EGM, the Directors believe that the Company will have no alternative but seek to raise equity finance, or to be diluted in accordance with the terms of the Joint Venture. The Directors have no indication that any such financing would be possible or on what terms it could be executed.

Review of Operations

For the year 2011, Xstrata Zinc proposed a EUR13 million (US$18 million) budget comprising additional exploration and infill drilling as well as a pre-feasibility study. The pre-feasibility study and related costs are budgeted at about EUR3 million, while the proposed EUR10 million drilling programme is split about two thirds infill definition drilling and one third exploration drilling.

Minco believes that the lead/zinc deposits at Pallas Green have not yet been fully delineated and has proposed that the drilling in 2011 should focus on ongoing exploration in the prospective Caherconlish area, and particularly exploring for higher grade and larger tonnage parts of the overall deposit.

Xstrata has not agreed with Minco's proposals and, as part of the pre-feasibility study, wants to concentrate on infill/definition drilling of the already defined Tobermalug zone which Minco considers to be the peripheral, more discontinuous part of the mineral deposit.

Twenty one drill rigs continue to operate in the vicinity of Caherconlish. To the end of August 2011, one hundred and forty four drill holes were completed and 64,093 metres drilled to further define the mineralisation within Tobermalug and the Northwest Extension, to continue definition and exploration of the Knockroe area, and to continue exploration of sparsely explored areas adjacent to and between resource lenses. In addition, eighteen holes were lost.

                                                                      % of 
                                  Number of drill holes                holes 
TBM/NWEX Definition drilling                                           drilled 
   50m infill/step-out                                   59              41.0% 
   100m infill/step-out                                  33              22.9% 
                              -----------------------------  ----------------- 
                                                         92              63.9% 
 drilling                                                37              25.7% 
Other Exploration drilling                               15              10.4% 
                              -----------------------------  ----------------- 
Total                                                   144             100.0% 

Ninety two holes were drilled to further define the Tobermalug and the Northwest Extension inferred resource with the objective of increasing the confidence in the current resource as part of a pre-feasibility study being undertaken by Xstrata and due for completion by year end. Fifty nine holes at 50 metre spacing and thirty three holes at 100 metre spacing have been completed, infilling between existing holes or stepping out from known resource grade mineralisation.

Thirty nine of these definition holes (42 per cent.) have intersected mineralisation exceeding 3 metres in width, with an average grade in excess of 4 per cent. combined lead and zinc. Twenty three holes (25 per cent.) intersected mineralisation exceeding 3 metres in width with an average grade in excess of 6 per cent. combined lead and zinc and these have an average grade close to the 10.68 per cent. combined lead and zinc equivalent average of the 31 December 2010 inferred resource.

Assay results have been received for fifteen of the thirty nine definition holes that have intersected mineralisation exceeding 3 metres in width with an estimated average grade in excess of 4 per cent. combined lead and zinc:

                 From      To      m    Zn%   Pb%  Zn+Pb%  Lens 
    636-249    372.50  381.80   9.30  17.74  2.73   20.47   NWX 
    2529-133   406.00  409.25   3.25  16.88  1.56   18.44   TBM 
    636-269    363.95  368.95   5.00  11.09  5.89   16.98   NWX 
    2529-153*  395.30  399.50   4.20  10.62  5.85   16.47   TBM 
    636-248    341.25  352.50  11.25  11.35  1.91   13.26   NWX 
    2529-139   389.60  398.10   8.50   8.91  2.70   11.61   TBM 
    636-245    350.40  353.95   3.55   7.10  2.57    9.67   NWX 
    636-229    376.20  380.65   4.45   6.91  0.85    7.76   TBM 
    636-247A   361.90  368.90   7.00   6.62  1.11    7.73   TBM 
    636-260    355.50  373.40  18.35   5.98  1.14    7.12   TBM 
    636-231    370.80  376.70   5.90   5.11  1.44    6.55   NWX 
    and        398.45  401.85   3.40   4.04  0.68    4.72   TBM 
    2529-17    444.45  448.35    3.9   4.75  0.59    5.34   TBM 
    636-264    326.10  337.00  10.90   3.98  0.49    4.47   TBM 
    636-271    367.95  371.80   3.85   3.50  0.55    4.05   TBM 
    636-246    361.90  368.90   8.90   3.67  0.32    3.99   TBM 

Bold type denotes results not previously reported.

Thirty seven holes, 26 per cent. of the total completed to date, have further defined the Knockroe mineralisation or expanded exploration in the Knockroe area. Sixteen of these holes have intersected mineralisation exceeding 6 per cent. combined lead and zinc over 3 metres. Assay results have been received for nine of these holes.

                From      To      m    Zn%   Pb%  Zn+Pb%  Ag g/t 
    2529-181  483.80  491.80   8.00  18.41  2.01   20.42    5.63 
    2529-140  503.80  517.20  13.40  11.45  1.38   12.83    3.01 
    2529-146  629.95  638.25   8.30   8.36  3.76   12.12   18.31 
    2529-150  450.10  466.45  16.35   9.51  0.88   10.39    8.01 
    2529-123  507.65  517.45   9.80   7.72  0.30    8.02    3.67 
    2529-138  510.65  517.00   6.35   6.56  0.98    7.54    5.68 
    2529-131  601.00  604.70   3.70   7.05  0.47    7.52    4.92 
    and       608.95  614.20   5.25   6.16  0.44    6.60    5.11 
    2529-149  499.30  503.05   3.75   5.45  0.65    6.10    2.06 
    2529-143  628.35  632.55   4.20   4.53  0.44    4.97    5.83 

Bold type denotes results not previously reported.

The resource in the Knockroe area continues to expand with new lenses identified 400 metres to the southeast (2529-131) and southwest (2529-146) of the initial discovery area. Significant potential remains for the discovery of new lenses to the west, south and southeast of Knockroe. One kilometre to the southeast, hole 2529-129 intersected 27.6 metres averaging 1.12 per cent. zinc and 0.28 per cent. lead (including 2 metres averaging 3.08 per cent. zinc and 1.79 per cent. lead) indicating a probable connection with Tobermalug 'Deep South' mineralised area.

Minco is of the opinion that a major northeast striking fault complex lies immediately to the south of current drilling with the potential to host a significant tonnage of high grade mineralisation. Fourteen drill holes have explored between and adjacent to known zones of mineralisation. Of these, six intersected narrow widths of low grade mineralisation.

New Resource Updates

In February 2011, Xstrata provided Minco with a revised JORC compliant resource estimate, calculated as of 31 December 2010, at both a 4 per cent. and a 6 per cent. zinc equivalent cut-off. The 4 per cent. zinc equivalent cut-off resource amounts to 25.9 million tonnes of inferred resources at an average grade of 7.51 per cent. Zn and 1.38 per cent. Pb (8.89 per cent. Zn/Pb), while the 6 per cent. zinc equivalent cut-off resource amounts to 17.6 million tonnes of inferred resources at an average grade of 8.96 per cent. Zn and 1.72 per cent. Pb (10.68 per cent. Zn/Pb).

Xstrata has also provided Minco with an updated undiluted, in situ inferred resource for the Caherconlish

area as of 30 April 2011 (not JORC compliant), which indicates an increase of 1.9 million tonnes and1.4 million tonnes respectively in the 4 per cent. and 6 per cent. zinc equivalent cut-off in situ resource, and with reductions of 2.2 per cent. and 3.3 per cent., respectively in the undiluted (zinc plus lead) resource grade, over the previous resource estimates prepared by Xstrata as of 31 December 2010.

The update resource indicates that as of 30 April 2011, the overall inferred resource, at the 6 per cent. zinc equivalent cut-off, has increased by about 1.4 million tonnes and with a reduction in the zinc grade from 8.96 per cent. Zn to 8.73 per cent. Zn. Minco has separately estimated that the drilling on the Knockroe zone has added approximately 4 million tonnes to the inferred resource (not JORC compliant), essentially doubling the Knockroe resource since the start of 2011 (see Minco's Annual Report announcement of 30 June 2011). This implies the effective reduction of about 2 million tonnes in the Tobermalug-NWX zones. The definition drilling to date in 2011 has yet to result in any significant change in average resource grade and has resulted in a reduction of the area, and hence tonnage, of the resource estimated at a 6 per cent. zinc equivalent cut-off and, in some places, a break-up of this higher grade mineralisation into smaller lenses.

    Cut-off                     Tonnes    Zn    Pb  Zn+Pb 
                                         (%)   (%)    (%) 
    30 April 2011 
     (not JORC compliant) 
    4% Zneq                 27,800,000  7.40  1.34   8.73 
    6% Zneq                 19,000,000  8.73  1.60  10.33 
    31 December 2010 
    4% Zneq                 25,900,000  7.51  1.38   8.89 
    6% Zneq                 17,600,000  8.96  1.72  10.68 

Geophysical Survey

A preliminary test geophysical survey using 2D ground seismic, designed to provide additional identification of the Ballyneety Fault at depth, was completed over four traverse lines around the Caherconlish area in March 2011.

A review of the data undertaken by Minco's geophysical consultant suggests that one of the primary objectives of the survey, (identifying a major fault system at debt) was not achieved due to many disruptions in the migrated seismic traces, plus uncertainties in assigning lithological correlation along with significant lateral changes in seismic character, which give rise to considerable uncertainties in the seismic interpretation, and especially in attempts to identify faults. It was also noted that there is little correlation between migrated seismic traces on the cross lines with respect to those on the tie line where they intersect.

Xtierra Inc.

Minco holds 30 million shares (29 per cent. as at 30 June 2011) of Xtierra Inc., a Canadian company listed on the TSX Venture Exchange (Toronto), which holds interests in base and precious metal mineral deposits on properties located in the Central Mexican Mineral Belt, in and around the States of Zacatecas and San Luis Potosi, Mexico. This area has produced the bulk of Mexico's silver production from the early colonial period to the present day and hosts many world-class silver and base metal deposits.

Xtierra was established in 2008 by the directors of Minco specifically to facilitate the financing and development of Minco's Mexican exploration properties without further dilution to Minco's shareholders. In August 2008, Minco effected the reverse takeover of Xtierra whereby Xtierra acquired all of Minco's Mexican assets in exchange for the issue of 30 million shares to Minco.

At 31 December 2009 and 2010, Minco held 30 million shares in Xtierra representing a 60 per cent. and 35 per cent. interest respectively. As a result of share placements during 2010, Minco's interest in Xtierra was reduced to 35 per cent. As a result, for accounting purposes, Xtierra ceased to be a subsidiary and became an associate of the Minco. Following share placements in early 2011 and the conversion of outstanding warrants, Minco's interest in Xtierra was further reduced to 29.5 per cent. at 1 March 2011 and 29.0 per cent. at 30 June 2011.

The carrying value of Minco's interest in Xtierra was US$3.9 million at 30 June 2011, compared to US$4.5 million at 31 December 2010. However the fair value of the group's interest in Xtierra as at that same dates was US$10.1 million and US$12.9 million, respectively, and was as high as US$19.5 million in March 2011.

Xtierra's Projects consist of:

-- The Bilbao Project, a polymetallic sulphide and oxide replacement deposit upon which Xtierra has delineated a NI 43-101 compliant indicated resource of zinc-lead-silver-copper of 10.62 million tonnes with a total metal content as zinc equivalent of 688,258 tonnes Zneq.

Xtierra is currently carrying out a Feasibility Study on the Bilbao deposit which still remains open to the southwest and exploration drilling has indicated a zone of high grade silver mineralization to the south of the outlined open pit resource

-- The La Laguna Pedernalillo (Laguna) Tailings Project - a silver-gold-mercury tailings reprocessing project upon which Micon International completed a bankable feasibility study in 2006 and in February 2008 revised a NI 43-101 compliant reserve (Proven and Probable) of 6,799,000 tonnes at 57.92g/t silver, 0.31g/t gold and 328.92g/t mercury;

-- El Dorado Gold Exploration Project - the El Dorado gold project comprising 2,890 hectares of mining claims is located in the Pinos district of southeastern Zacatecas State, Mexico.

-- Exploration Properties covering approximately 12,267 hectares in three groupings identified as the Villa de Ramos, El Morro, Orca 3 property in the Pinos district and Milagros Properties in the Panfilo Natera Mining District of Zacatecas and neighbouring San Luis Potosi, in the general vicinity of the Bilbao Project.

Bilbao Silver-Zinc-Lead-Copper Deposit

The Bilbao Property is located approximately 500km northwest of Mexico City in the southeastern part of the State of Zacatecas and 50km east of the state capital, Zacatecas. The Bilbao deposit is a sulphide replacement deposit with a skarn overprint and is located adjacent to the La Blanca granodiorite. The upper 70-90 metres of the deposit have been oxidised. Prior to Minco's involvement at Bilbao in 2006, no drilling was carried out although historical, intermittent mining of a direct shipping ore may have amounted to 1 million tonnes of the near surface oxide mineralization.

Feasibility Study

A Feasibility Study on the Bilbao property is in its final phase of completion. In July 2010, Xtierra retained Dowding, Reynard and Associates (DRA), a recognized leader in the field of mine design, mine engineering, mineral process design, project management and mine construction to oversee and complete the Bilbao Feasibility Study. DRA is involved in oversight of all of the component parts of the feasibility study.

DRA is managing the commissioning and operation of a pilot plant designed to test the recovery process for the near surface oxide ores at Bilbao. Xtierra has also retained Golder Associates to advise on tailings disposal design work. Completion of the feasibility study is expected to take approximately three months after completion of the oxide pilot plant and sulphide locked cycle test programs. Most of the key component parts of the Feasibility Study have been completed or are near completion and awaiting final outputs from ongoing metallurgical test work. A final production decision is anticipated following its completion in Q1 2012.

Metallurgical Testing: The metallurgical test work to finalize flow sheet design for processing the oxide portion of the deposit (approximately 35 per cent. of the total indicated resources) has been delayed by about six months due to a number of issues including late delivery of equipment, mechanical and electrical issues and availability of certified laboratory testing facilities and related personnel. Once current open cycle test work being conducted at SGS Laboratories at Lakefield, Ontario is completed in Q3, locked cycle test work will be undertaken. The results of this locked cycle test work will be used for final design/construction of the oxide pilot plant and eventually final design inputs for the commercial scale processing plant and tailings treatment/disposal options.

Pilot Plant - Oxide Ore: The pilot plant test work comprises several component parts, including: (1) bulk sampling and preparation of composite samples; (2) crushing, milling and pre-concentration; (3) process stage of acid leaching, flotation and cyanidation; (4) confirmation of recovered grades and marketing of iron oxide in the reject magnetic material to the cement industry. The full implementation of the pilot plant test work has been delayed by about six months. However, the bulk sampling and preparation of composite sampling, crushing, milling and pre-concentration stage using a wet high intensity magnetic separator (WHIMS) were completed during the period. The open cycle and locked cycle metallurgical test work on the oxide ore along with calcite flotation test work is near completion.

Optimization flotation test work on the sulphide ore will be undertaken in Q4. Fresh samples have been obtained from core drilling in representative areas of the sulphide ore zones. These samples have been delivered to SGS in Lakefield and the test work will begin in early October.

Oxide Ore Process Stage - Fabrication of the tanks, agitators, flotation cells, including electric controls for a 20 kg/hr process plant, has been completed. Once the locked cycle bench scale test work has been completed, the balance of the pilot plant will be finalized, installed and commissioned to process the batched whole ore.

Resources: A new independent resource estimate was prepared by R.T.G. Parker, C.Eng., an independent consulting mining geologist, in May 2011. Mr. Parker is a 'Qualified Person' within the meaning of NI 43-101 - Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators. Mr. Parker also prepared the previously published resource estimates for the Bilbao project (November 2008 and February 2010).

    Resource Category         Tonnes  Lead  Copper  Zinc  Silver 
                          (millions)   (%)     (%)   (%)   (gpt) 
    Indicated Resources        10.62  2.00    0.19  2.13   53.81 
    Inferred Resources          0.43  1.73    0.18  1.44   46.39 

The 2011 resource estimate, which includes all drilling completed to the end of 2010, records a 10 per cent. higher Indicated tonnage (10.6Mt) from the previous February 2010 estimate (9.7Mt) and represents a 6 per cent. increase in total metal content, as zinc equivalent, from 650,565 tonnes Zn(eq) to 688,258 tonnes Zneq. This is due principally to the inclusion of 2010 drilling results allowing conversion of inferred resources to the indicated category. The difference is due in part to the elimination of all of the voids due to previous historic mining activity and to the adoption of smaller parent block size and tighter wireframe constraints.

Sulphide resources represent 50 per cent. of the resource in the indicated category (up from 35 per cent. in the 2010 estimate), mixed oxide and sulphide resources represent 15 per cent. (down from 22 per cent.) and oxide resources represent 35 per cent. (down from 43 per cent.) of the total Indicated Resource. Potential to increase the Bilbao resource exists, particularly at depth to the south and southwest where drill-hole X81 on the margin of the drill grid, intersected 6.15 metres grading 6.66 per cent. Zneq.

Exploration Drilling at Bilbao

In June and July, 2011, Xtierra announced results of a preliminary program of drilling in the southern part of the Bilbao project to investigate two types of silver-rich targets located immediately to the south of the main Bilbao deposit. The targets, all with high grade silver content, comprised high angle hydrothermal veins and brecciated limestone horizons. Six separate mineralized veins and/or fault-fillings were identified. Four of the mineralized fault structures trend NNW-SSE while another two veins strike NNE-SSW. The former have strong base-metal values while the later contain silver values of up to 664g/t silver and have been traced over a strike length of at least 70 metres and remain open-ended.

The holes were targeted to assist in determining the characteristics and continuity of the high grade silver veins previously found in drill-hole X26 at the southern margin of, and beneath, the main Bilbao deposit. The width of these structures varies, with veins averaging about 1 metre true thickness and fault-fillings up to 12 metres in thickness.

The NNW-SSE structures typically contain higher base-metal values with combined zinc and lead values of 14.95 per cent. (4.85 per cent. lead and 10.10 per cent. zinc) including 0.31 per cent. copper and 97.9g/t silver over 4.65 metres in DDH X86-B; 21.39 per cent. combined zinc and lead (9.96 per cent. lead and 11.43 per cent. zinc) including 0.27 per cent. copper and 127.6g/t silver over 1.05 metres in DDH X86A; and in DDH X86B-1 there is an intersection of 12.10 metres with average grades of 9.08 per cent. combined zinc and lead (4.17 per cent. lead, 4.91 per cent. zinc) including 0.63 per cent. copper and 109.4g/t silver.

Drilling has shown that the richer silver veins trend NNE-SSW, a direction which accords with similar vein trends to the north of the Bilbao deposit, within the La Blanca granite.

Discovery of this zone of silver-rich veins beneath and in addition to the main skarn-replacement zinc-silver-lead-copper mineral deposit at Bilbao is expected to contribute to both tonnage and silver content of the resource. Additional drilling will be required before any new resource estimate can be made and this drilling program is expected to commence in October 2011.

La Laguna Pedernalillo (Laguna) Tailings Project

Through its Mexican subsidiary, Minera Orca S.A de C.V., ("Minera Orca"), Xtierra holds an extraction licence granted by Conagua, the Mexican authority responsible for water resources, for the silver-rich La Laguna Pedernalillo ("Laguna") tailings deposit located near the city of Zacatecas in Mexico. The Laguna deposit comprises tailings solids derived from historic mine processing wastes and tailings located some distance from a dam constructed in 1836 to retain water for agricultural use.

The mineral reserve as estimated by Micon International totals 6.8 million tonnes containing an average of 57.92 g/t silver, 0.31 g/t gold and 328.92 g/t mercury. Micon estimated total capital cost of $34,203 (comprised of $17,537 direct costs together with indirect and owner's cost of $7,743, and an additional $8,923 is estimated for pre-production cost for the tailings area to bring the project into production). These costs are as of January 2006. Further optimisation studies have been undertaken by Xtierra and additional leach test work has been carried out with respect to evaluating a static vat leach process using calcium thiosulphate to recover silver, gold and mercury. Results of such test work have been positive.

Xtierra has undertaken a program of community consultation and intends to negotiate and enter into memoranda of understanding and, later, impact benefits agreement, with the Ejido Pedernalillo community living adjacent to, or having an interest in or claims to, agricultural lands surrounding the Laguna Project Area or who may be impacted by the Laguna Project. Preliminary discussions have been initiated and are in progress.

Xtierra will seek to advance the Laguna Project through additional metallurgical testing and updating of an earlier feasibility study, either directly or through other farm-out or joint venture arrangements.

El Dorado Gold Project

The El Dorado gold project is located in the Pinos district of south-eastern Zacatecas State, Mexico. The project comprising 2,890 hectares of mining claims is located in the Pinos district of the Central Mexican Mineral Belt and some 80 kilometres southeast of the Bilbao silver-zinc-lead-copper development project. The El Dorado property is located 7 kilometers northeast of the historic Pinos gold deposits where veins with reported bonanza grades of more than 200g/t gold were mined historically on northwest striking veins. It is located close to Xtierra's existing Orca 3 property in the Pinos district.

Historic records suggest the average mined grade was 97 g/t silver and 58.26 g/t gold. The property has an existing small-scale underground gold mining operation developed on one level of the El Dorado vein.

Xtierra completed an initial five hole 1,385 metre underground and surface drill program on the property in 2010. Work completed by Xtierra resulted in the discovery of an extensive gold-bearing stockwork encompassing the El Dorado vein and several other parallel structures. Sampling confirmed the high grade nature of the El Dorado vein with channel sampling returning values ranging from 0.5 to 57.0 g/t gold over widths of 0.10 to 1.0 metre with individual grab samples as high as 1,760 g/t gold and 3,590 g/t silver.

Additional surface exploration work including geochemical sampling and trenching is planned for Q4 ahead of a planned drill programme.

Qualified Person

The above information has been reviewed and verified by Mr. Terence N. McKillen, B.A. (MOD), M.A., M.Sc., P. Geo, Chief Executive Officer. Mr. McKillen is the Qualified Person for the purposes of the AIM Guidance Note on Mining, Oil and Gas Companies dated March 2006. Mr. McKillen is a graduate in Natural Sciences (Geology) from Trinity College Dublin and holds a Master of Science degree in Mineral Exploration and Mining Geology from the University of Leicester. He has 40 years of exploration experience in Ireland and internationally.


Minco recorded a consolidated loss for the six months ended 30 June 2011 of US$1,163,000, up from US$445,000 in the same period in 2010. The main component of the loss was the amount of US$598,000 representing the Company's equity accounted share of Xtierra's loss for that period, compared to US$107,000 in the same period in 2010. General and administrative expenses for the first six months of 2011 were US$383,000 compared to US$752,000 in the first six months of 2010. The conversion of some assets and liabilities to US dollars, resulted in a foreign exchange loss of $183,000 for the six month period ended 30 June 2011.

Total assets increased by US$2.9 million from US$19.4 million at 31 December, 2010 to US$22.3 million at 30 June 2011, largely as a result of the increase in cash and cash equivalents following the placement of shares for cash.

Cash and cash equivalents increased from US$1.2 million at 31 December 2010 to US$2.3 million at 30 June 2011. Intangible assets increased from US$11.8 million to US$14.2 million as a result of additions of US$1.369 million and a foreign exchange movement of US$1.051 million as a result of the strengthening of the Euro against the US Dollar. At 30 June 2011, the Company had working capital of US$1.3 million, compared to US$0.9 million at 31 December 2010.


In May 2011, following a complaint from a shareholder, the Office of the Director of Corporate Enforcement ("ODCE") wrote to the Secretary of the Company enquiring about the Company's failure to file certain forms and returns with the Companies Registration Office ("CRO"). Upon checking the Company noted that it had inadvertently omitted to file a number of forms and returns. The Company instructed its Solicitors to immediately take care of any outstanding filings. These forms and returns have all since been filed and the Company's filings with the CRO are now up to date.

On 23 August 2011, the ODCE informed Minco's Solicitors that the filing of the outstanding forms had been noted and that the ODCE's file on this matter had been closed. In a letter dated 23 August 2011, addressed to the shareholder who had filed the complaint, the ODCE notified the shareholder that the substantive matter of the Company's failure to file forms B5 had been rectified to the satisfaction of the Director of Corporate Enforcement and that the file on this case was now closed.

Approval by Directors

The Interim Report for the six months to 30 June 2011 was approved by the Directors on 29 September 2011.

Copies of this announcement will be posted on the Company's website at and will be available for inspection at the Company's registered office at Connaught House, Burlington Road, Ballsbridge, Dublin 4, Ireland.


Minco Plc is an AIM quoted precious and base metals exploration and development company engaged in zinc exploration on the Pallas Green property in Ireland in a 23.6 per cent./76.4 per cent. joint venture with Xstrata Zinc (which Minco has conditionally agreed to sell to Xstrata) and indirectly on base metal and silver projects in Mexico, through its shareholding in Xtierra Inc. listed on the TSX Venture Exchange (Toronto) under the symbol "XAG".

For further information, 
 or contact: 
                                                  +1 416 362 
John Kearney: Executive Chairman                        6686 
                                                  +1 416 362 
Terence McKillen: Chief Executive                       8243 
                                                +44 (0) 8452 
Danesh Varma: CFO & Company Secretary                606 034 
                                                  +353 (0)46 
Minco - Ireland Contact: Peter McParland            907-3709 
John Frain/Fergal Meegan: (NOMAD) Davy     +353 (0)1 6796363 
Barry Gibb/Saif Janjua: (Corporate            +44 (0)20 7930 
 Advisor/Broker) Beaufort International                 8222 

The condensed consolidated financial results for the half year ended 30 June 2011 can be viewed at the following link:

This information is provided by RNS

The company news service from the London Stock Exchange



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