Mr. Courtney Chamberlain reports

MINERA IRL RECEIVES CONSTRUCTION PERMIT TO BUILD THE OLLACHEA GOLD MINE

The Peruvian Ministry of Mines and Energy has granted to Minera IRL Ltd. the construction permit to build the Ollachea gold mine. Following the approval of the environmental and social impact assessment in 2013, the construction permit was the final major government approval required to commence construction.

"We are delighted to have received approval of the construction permit for Ollachea and are looking forward to commencing development as soon as project financing is arranged, which we expect to conclude during the third quarter of 2014," said Courtney Chamberlain, executive chairman of Minera IRL.

"We wish to acknowledge the government authorities' outstanding attention to rapidly facilitating the permitting process," said Diego Benavides, president of Minera IRL S.A. "We also thank the community of Ollachea, our true partners in the project, for their unwavering support."

The Ollachea gold project

The Ollachea orogenic gold deposit, located in southern Peru, was discovered by Minera IRL in late 2008 after acquiring the property from Rio Tinto in 2006. Since that time, the company has completed more than 81,000 metres of surface diamond drilling in 208 holes, resulting in the delineation of significant gold mineral resources and reserves at Ollachea. The project has strong community support, as evidenced by a 30-year surface rights agreement.

In November, 2012, the company completed a definitive feasibility study on the Minapampa deposit. The results of a subsequent optimization process were announced on June 4, 2014. These studies reported the details of a robust underground mining operation with probable mineral reserves of 9.2 million tonnes grading 3.4 grams of gold per tonne of material containing one million ounces.

The Ollachea gold mine has scheduled production of 930,000 ounces over an initial nine-year mine life at an average site cash operating cost of $507 per ounce of gold produced.

The upfront capital cost is estimated at $177-million (including IGV, which is recoverable) with a total life-of-mine capital cost estimate of $220.0-million.

The table indicates the key performance measures of the Ollachea project utilizing a $1,300-per-ounce gold price on a total project basis that is equity financed.

                     KEY PERFORMANCE MEASURES

Parameter             Units          Financial results
                                   2014 DFS optimization
                               Pretax                Posttax

Project cash flow       $M        492                    344
NPV at 5% real          $M        326                    218
NPV at 7% real          $M        277                    181
NPV at 10% real         $M        217                    135
IRR (real)               %       37.1                   28.2
Payback               years       2.4                    3.1

Notes:
1. NPVs as at commencement of construction.
2. NPVs are based on mid-period discounting.
3. Before tax is before special mining tax, workers' 
participation profit of 8 per cent and income taxes of 30 
per cent.
4. Payback starts from the commencement of production.
5. The financial results are on 100-per-cent project basis 
and exclude the agreement with the community for a 5-per-
cent participation in Minera Kuri Kullu SA on commencement 
of production and the $14.2-million remainder of the second
additional payment payable by MKK due to Rio Tinto in June,
2016.
6. Excludes the 1-per-cent gross smelter royalty granted to 
Macquarie Bank.
7. Tax losses and capitalized expenditures available to 
offset taxes payable include balances as of Dec. 31, 2013, 
in the 2014 update.

Exploration and resource infill drilling has defined indicated mineral resources of 10.1 million tonnes grading four grams per tonne gold containing 1.3 million ounces at a two-gram-per-tonne-gold cut-off, plus inferred mineral resources totalling 12.1 million tonnes grading three grams per tonne gold containing 1.1 million ounces at a two-gram-per-tonne-gold cut-off. Significant open-ended potential exists to increase mineral resources both along strike and at depth as evidenced by underground drilling results along the eastern extension of the Minapampa deposit (reported in the press release dated April 2, 2013).

Qualified persons

The preparation of the technical information contained herein was supervised by Courtney Chamberlain, BSc and MSc, metallurgical engineering, a fellow of the Australian Institute of Mining and Metallurgy, who is recognized as a qualified person for the purposes of National Instrument 43-101, and who has reviewed and approved the technical information in this press release.

The preparation of geological and resource information contained herein was supervised by Donald McIver, vice-president, exploration, of the company, MSc, exploration and economic geology, a fellow of the Australian Institute of Mining and Metallurgy, as well as of the Society of Economic Geologists, who is recognized as a qualified person for the purposes of National Instrument 43-101, and who has reviewed and approved the resource information in this press release.