TEXT-Fitch: Iberian Minerals ratings unaffected by cancelled bond issuance

(The following statement was released by the rating agency)

Oct 03 - Fitch Ratings says that Switzerland-based Iberian Minerals Corp's (Iberian) 'B' Long-term Issuer Default Rating (IDR) with a Stable Outlook is unaffected by the issuer not proceeding with the planned USD200m bond issuance, as such, the expected rating assigned to the planned USD200m bond has been withdrawn.

Fitch considers Iberian's liquidity position as adequate following the company's successful refinancing of its existing RCF through finalising a new USD100m RCF at end-September 2012.

Fitch notes that the planned mine expansion in Spain will be largely dependent on Iberian securing adequate finance to fund the expansion of output at the Aguas Tenidas mine to 4.4mtpa by early 2015, with significant capex planned for 2013. Fitch notes that if capex is delayed, the lower spend would lead to improved FCF generation, but it would also delay the cost benefits from increased scale.

Iberian is a Canadian listed global base metals company with operating mines and exploration targets in Spain and Peru, where it operates three key mines. The company primarily produces copper, but also smaller quantities of zinc, silver, gold and lead.


Negative: If FFO gross leverage is sustained above 3.5x, this would reflect a significant increase in Iberian's cost position, i.e. the failure to control rising domestic cost increases and limited financial flexibility constrain the ratings.

Positive: An upgrade is considered unlikely, but may be considered if gross leverage is maintained at below 2x over the medium-term and the company sustains cash costs well within the second quartile of the global cost curve.

((Bangalore Ratings Team, Hotline:+91 80 4135 5898 Jyothsna.BN@thomsonreuters.com, Group id: BangaloreRatings@thomsonreuters.com, Reuters Messaging: Jyothsna.BN.thomsonreuters.com@reuters.net))