TORONTO (miningweekly.com) – Minera IRL intends to delist from the TSX on the loss of control of its Peruvian subsidiaries, not being able to file financial statements to securities regulators and being unsure who is buying gold from its Corihuarmi mine, in Peru.

The Latin America-focused gold junior had in September requested a precautionary suspension from trading on the LSE’s Aim, as control within the company’s two Peruvian operating subsidiaries, Minera IRL SA and Compania Minera Kuri Kullu had been compromised.

The parent company alleged that Diego Benavides, former Minera IRL interim CEO and the president and GM of its two 100%-owned Peruvian subsidiaries, took de facto personal control of the subsidiaries in violation of his fiduciary responsibilities and international standards of corporate governance. Minera IRL currently had no control or oversight of gold sales from the Corihuarmi mine and was unable to specify the recipient of the proceeds.

Minera IRL last week explained that under previous offtake arrangements, the proceeds from its gold produced at Corihuarmi had been paid into a Jersey bank account, operated by Minera IRL, a company incorporated in Jersey, via a Swiss refiner, which had allowed the company to maintain full control of the proceeds from gold sales that could then be disseminated down to its operating subsidiaries as required.

However, owing to recent efforts by Benavides to amend the existing offtake arrangement so that the proceeds from the sale of gold would be directed to the Peruvian subsidiaries, the existing offtaker had suspended shipments of gold in doré for refining and sale.

Minera IRL believed that Benavides was seeking alternative venues to sell the mine’s doré, which would likely involve the proceeds being transferred directly to the Peruvian subsidiaries. The company suspected that 1 070 oz of gold was currently held in doré form, which would be shipped for refining and sale, while a further 1 000 oz was expected to be shipped shortly.

Corihuarmi produced 23 321 oz of gold last year.

Meanwhile, the development of the company’s advanced-stage Ollachea project was also stopped last month, as Minera IRL struggled to renew agreements with communities near the $180-million project after management changes in the company upset local leaders.

Minera IRL was in the process of dismissing Benavides from his roles, which was expected to take several months under Peruvian corporate law.

However, with waning cash reserves and no income, Minera IRL expected that meeting its obligations as they fell due could be challenging until the company regained control of its Peruvian subsidiaries. Minera IRL had limited visibility of the financial position of Minera IRL SA and Compania Minera Kuri Kullu.

A group of dissenting shareholders had requested an extraordinary general meeting (EGM), proposing to replace certain members of the parent company’s board with a new slate of directors, including Benavides, as well as lawyer Armando Lema and president of the Peruvian Development Bank and underwriter of a $70-million bridge loan finalised in June Enzo Defilippi.

Minera IRL's board advised shareholders to vote against all resolutions put forward by the dissenting shareholders during the EGM, which was scheduled to take place in Toronto on November 26.