-- adds broker comment, share price--
Minera IRL (LON:MIRL) has sold its interest in the Don Nicolas gold mine development in Argentina to raise cash for its flagship Ollachea project in Peru.
Courtney Chamberlain, Minera’s executive chairman, said: "We enjoyed working in Argentina over the past four-and-half years and had considerable success defining reserves and resources at the Don Nicolas project.
“However, having recently received the construction permit to build the Ollachea gold mine in Peru, thecompany believes that, with great regret, that divesting our interest in Don Nicolas and reallocating the proceeds towards our flagship project is in the best interest of Minera IRL."
CIMINAS, Minera’s joint venture partner at Don Nicolas, is buying out Minera's interest with the consideration to be paid in three tranches.
In 2013, Don Nicolas made a loss before tax of US$15.7mln while the carrying value of the assets subject to the transaction was US$43.7 mln.
Broker Canaccord said it expects Minera to provide an update on the financing for Ollachea in the third quarter, with the possibility of some additional information with the interims in August.
The broker added that the sale knocks about 3p off its target price.
Shares were 10.6p today.