July 27, 2012 / 3:43 PM / 5 years ago

Ivernia can restart lead shipments from Australian mine, shares jump

2 Min Read

July 27 (Reuters) - Ivernia Inc said it received a go-ahead to ship lead carbonate concentrate from its flagship Magellan mine in Western Australia, sending its shares up as much as 68 percent.

The Canada-based base metal miner said in April last year it had placed the Magellan mine under full care and maintenance for an indefinite period and had laid off about 83 percent of the workforce at the mine.

Operations at the site were halted after lead was found in mud samples taken from shipping containers from the Magellan mine, indicating possible leakage of the metal and raising environmental concerns.

The company said on Friday it does not expect to restart any shipments prior to the second quarter of 2013.

"A number of factors still need to be considered before making a decision to restart," Wayne Richardson, chairman of Magellan Metals, said in a statement.

Ivernia expects it will require additional financing to restart the mine, but said it could not estimate the amount at this time.

"It will not be easy hiring the operating staff because there is a lot of work (mining activity) in Australia and this is a mine that has been shut down twice in the last three years by the government," said analyst Kerry Smith of Haywood Securities.

Ivernia would be allowed to ship lead carbonate concentrate through the Port of Fremantle for up to five years, subject to rigorous conditions imposed by the Western Australian government.

The Magellan mine, whose key customers were Chinese smelting companies, was set to supply 85,000 tonnes of lead a year, or about 2 percent of the world's mined lead.

Shares of the company were up 47 percent at 14 Canadian cents on Friday morning on the Toronto Stock Exchange. (Reporting by Krithika Krishnamurthy in Bangalore; Editing by Sreejiraj Eluvangal) ((krithika.k@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: krithika.k.thomsonreuters.com@reuters.net

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