Ivernia Reports Higher Revenue in Q3 2010

Ivernia Inc. (TSX:IVW) today reported revenue of $37.3 million for the third quarter of 2010, compared to $0.2 million for the same period last year.

Revenue for the first six months of 2010 totaled $62.8 million, compared to $8.3 million for the same period last year. The increase in revenue reflects the continued improvement in the ramp-up of production at the Magellan Mine in 2010.

The Company recorded Operating Income of $8.2 million for the third quarter of 2010 compared to an Operating Loss of $0.3 million for the same period last year.

The Company returned to profitability with a net income after taxes of $2.9 million, or $0.02 per common share for the third quarter of 2010 compared with a net loss of $4.6 million, or $(0.03) per share for the same period last year.

THIRD QUARTER 2010 HIGHLIGHTS

Financial

• Recorded revenue for the third quarter of 2010 of $37.3 million from the sale of 16,900 tonnes of contained lead in concentrate
• Third quarter operating income of $8.2 million
• Third quarter 2010 net income before taxes of $4.0 million
• Third quarter 2010 net income after taxes of $2.9 million
• Third quarter 2010 cash provided by operations before changes in non-cash working capital of $2.0 million
• Cash balances at September 30, 2010 of $7.5 million
• Increase in working capital from $3.4 million on June 30, 2010 to $7.2 million on September 30, 2010

(1) See the Financial and Operating Highlights for definition of Operating Income and Loss

Operational

• Progressed production ramp-up at the Magellan Mine producing 14,600 tonnes of contained lead in concentrate in the third quarter of 2010, an increase of 28% compared to the 11,400 tonnes of lead contained in concentrate produced in the second quarter of 2010
• Processing plant lead recoveries in the third quarter of 2010 averaged 76% showing a marked improvement from recoveries of 69% in the second quarter of 2010
• Guidance for the fourth quarter is for a further step up in production levels to a range of 15,000 – 18,000 tonnes of contained lead in concentrate
• A new resource estimate is being finalized for the Magellan deposit with corresponding updates to reserve estimating, mine scheduling and optimizations scheduled for completion in first quarter 2011
• In October, commenced first drilling campaign at Prairie Downs which is expected to be completed by year end (Ivernia has the right to acquire up to an 80% interest in the Prairie Downs Joint Venture)

OUTLOOK

Magellan Metals continues to ramp-up production of lead carbonate concentrate over the course of 2010. Production restart commenced late February 2010 and during the third quarter of 2010 the operations produced 14,600 tonnes of contained lead in concentrate. The staged ramp-up of production will continue during the fourth quarter of 2010 with planned full production levels forecast to be reached during the first quarter of 2011.

Production during the third quarter of 2010 of 14,600 tonnes of lead contained in concentrate was 1,400 tonnes or 9% below previous guidance as the site team addressed issues with the concentrate thickening and filtration and looked to improve recovery. Investigations of the concentrate thickening-filtration process interactions identified a number of operational changes and capital modifications that needed to be implemented to improve performance. A number of these modifications have already been implemented with demonstrable improvements in performance and an action plan is in place for further modifications to be implemented in the fourth quarter. Concentrate filtration rates in September averaged 300 dry metric tonnes per day, with a best single day performance of over 400 dry metric tonnes (concentrate filtration is the final stage of the production process to produce saleable product).

Plant recoveries improved markedly compared to the second quarter due to a combination of improved plant management and higher feed grades. New operating practices have been introduced that focus on lead input and concentrate thickener control resulting in steadier operations for the second half of the quarter. The steadier operations allowed improved process control and gave higher plant recoveries of 76% across the third quarter compared to 69% in the previous quarter.

A major planned maintenance shutdown was successfully completed in late September to allow a full mill reline and annual statutory high-voltage electrical testing, as well as the implementation of a number of maintenance and capital projects previously identified to improve plant performance. No major issues were identified during the shutdown period. This was the first major planned maintenance shutdown since the restart of operations in February.

The Company is reviewing its 2011 production plans and is focused on optimizing the Magellan operation in light of the prevailing metal prices, the A$/US$ exchange rate, treatment and transport charges and mine cost structure. The Company expects to achieve targeted full concentrate production rate during the first quarter of 2011. Magellan Metals is expected to produce on average approximately 85,000 tonnes per annum of contained lead in concentrate over the mine life.

While the production performance at Magellan Metals continues to improve, management continues to face and address challenges that are commonly encountered during a plant restart. These challenges introduce a degree of uncertainty in short term production forecasts and, as a result, the production guidance for the fourth quarter of 2010 has been revised to reflect a range of production outcomes dependent on the short term level of success of the initiatives currently underway.

As at November 5, 2010 Ivernia held unrestricted cash balances of $8.3 million. At current lead price and production levels, management anticipates that cash flow from operations will continue to be positive and that current treasury and cash flow from operating activities will be sufficient to fund cash required for non-operating activities going forward. Ongoing cash flow from operating activities continues to be exposed to fluctuations in metal prices, production rates and the A$/US$ exchange rate.

During the latter part of 2010 and early 2011 the Company will be increasingly focused on operational optimization as Magellan moves into a steady state operating environment at targeted full production levels. Since the completion of the 2010 drilling program during the second quarter, Magellan has been focused on mine scheduling optimization and a new life of mine plan and plans to issue updated Resource and Reserve statements and a NI 43-101 technical report during the first quarter of 2011.

Magellan Production Ramp-up

Performance at the Magellan mine continues to improve as key debottlenecking capital projects are being implemented and the workforce gains more experience with this unique ore and processing plant. Contained metal in concentrate produced was up 28% compared to the second quarter of 2010 and lead in concentrate sales was up 97%. The primary focus of site management in the third quarter was to address issues with the plant lead recovery and the interaction between the concentrate thickeners and the filters, as this was the limiting factor on concentrate production.

During the third quarter of 2010, the mill treated 259,000 dry metric tonnes of ore with an average head grade of 7.4% lead. The plant recovered an average of 76% of the lead, to produce approximately 22,600 dry metric tonnes of concentrate with an average grade of 65% contained lead which represented a marked improvement from the results of the second quarter of 2010.

In June, mill throughput was increased to 250 tonnes per hour (equivalent to the target capacity 1.9 million tonnes per annum rate) and the plant experienced periods of lead input in excess of the current capacity for short periods of time. At these higher rates, the process plant became metallurgically unstable resulting in a number of plant stoppages and poor lead recoveries. This also highlighted processing issues with the capacity of the concentrate thickeners, filter feed pump and pressure filter. The primary cause of these issues was identified as the inability of the concentrate thickeners to deliver the specified density to feed the pressure filter at higher concentrate production rates. In July, the plumbing of the two thickeners was modified to allow them to be run in parallel rather than in series and a complementary simple flocculent addition system was installed. Mill throughput was adjusted with mine grade to smooth the lead input into the plant.

In August, a new ore stockpile management technique was introduced to reduce the variance in the mine head grade. One element of this was to reduce the addition of low-grade ore to the feed as this material was contributing to grade volatility. This in combination with the higher grade areas currently being mined in the Magellan and Cano pits resulted in an increase in head grade delivered to the plant. Through the second half of August and the first half of September the plant achieved steady state at a rate of 300-350 dry metric tonnes of concentrate production per day, compared to full production targets averaging 400 dry metric tonnes per day. This steady state period allowed the first stage of balancing of the float circuit and combined with the higher head grades, delivered plant recoveries of 75-80%. Overall for the third quarter the average plant recovery was 76% compared to an average of 69% in the second quarter of 2010.

A major planned maintenance shutdown was successfully completed in late September to allow a full mill reline and annual statutory high-voltage electrical testing, as well as the implementation of a number of projects identified to improve plant performance. No significant issues were identified during the shutdown.

The interaction between the concentrate thickeners and the filters is an ongoing area of focus and the subject of several projects planned for the fourth quarter. An increase in capacity to the filter feed pump is planned for November. A permanent thickener feed control and flocculent addition solution will also be installed in November. Additional plates will be added to the pressure filter in December, increasing the filter's capacity by 8% and removing it as a bottleneck to future concentrate production.

Magellan has now recruited its full complement of personnel supplemented by contract labour for the bagging operations. The booming resources sector in Western Australia is recreating the skills shortages experienced during 2006 to 2008. Magellan is developing an employee value proposition that balances salary with lifestyle, personal development and a positive workplace culture.

Operational Optimization

Work is continuing on mine scheduling optimization for the life-of-mine planning. The aim of this work is to improve the mining program to deliver lower mining and processing costs through a combination of: mineralization/rock type/lead grade blend optimization; reduced double handling; reduced non-productive equipment moves; and, identifying locations for in-pit waste dumping. Improved blasting practises are being implemented to reduce downstream crushing and grinding costs as well as minimizing costly crusher blockages.

Close spaced grade control drilling and XRF grade sampling of blast holes is expected to deliver improved mining grade control and reconciliation. This is expected to give greater ore grade predictability and therefore improve the mill feed blending. Blast hole XRF sampling is identifying low grade ore (1-5% lead) in blocks that have been earmarked as waste using the broader spaced grade control drilling.

Following the purchase of the onsite 4.2 megawatt power station, plans are being developed to convert the generator sets from diesel fuel to dual fuel diesel-natural gas. The gas pipeline has been installed to the power station and future gas supplies have been secured on long term contract at competitive prices. The conversion to dual fuel is expected to significantly reduce the site's power costs and reduce Magellan Metals' carbon emissions.

Magellan Metals has implemented a best practice concentrate handling system utilizing two tonne plastic bulk bags and shipping containers. The Company is now investigating ways to reduce the cost and improve the efficiency of the bagging process as well as exploit the opportunities offered by selling concentrate in this form.

Corporate Development and Exploration

Drilling Program

A new resource estimation model is being finalized for the Magellan Hill creating a single geological model for the Magellan, Cano, Pinzon and Gama deposits. The geostatistics including variography, top cuts, modelling parameters and estimation methods have been evaluated and a new model reported at various cut-offs. This resource estimation includes the grade control drilling and most recent drilling programs to provide an improved understanding of the deposits.

The recent drilling at the Pizarro deposit, some 10km south of Magellan has been incorporated into the previous data with new geostatistical evaluation of the mineralization and density with a new resource estimation completed that now includes the recently drilled Columbus prospect.

Life of Mine planning with optimizations and scheduling is underway to best utilise the known resources and provide the optimum development options for the identified mineralization.

An independent technical report to be prepared in accordance with National Instrument 43-101 has been commissioned from SRK Consulting (Australia) Pty Ltd. which is planned to be published during the first quarter of 2011.

The current Mineral Resource Estimate for the Magellan, Cano, Pinzon, Drake and Pizarro deposits as at December 31, 2009 is reported in the 2009 AIF and refers to the Company's NI 43-101 Technical Report dated September 30, 2004.

Prairie Downs

Ivernia has signed a formal joint venture agreement with Prairie Downs to acquire up to 80% of the Prairie Downs Joint Venture in Western Australia.

The highlights are:

• Part of Ivernia's growth strategy to create a portfolio of base metal projects
• Opportunity to explore and potentially develop a significant lead–zinc project
• Synergies with Ivernia's nearby (within 250 kilometres) flagship Magellan lead mine in Western Australia
• An A$2 million exploration program focused on a range of defined prospective targets
• Option to acquire a 60% interest for A$10 million after completion of an exploration expenditure of A$3 million with a right to increase to 80% following further exploration expenditure

The exploration program has advanced significantly since the Prairie Downs Joint Venture was entered into in June 2010. A large geochemical survey utilizing a portable XRF has collected data for more than 8,000 sample points over the main prospects and defined a number of new base metal geochemical anomalies.

Geological mapping, interpretation of the geochemistry, and evaluation of previous drilling and geophysics has highlighted key target areas for drilling. A program of over 20 drill sites has been approved by the Department of Mines and Petroleum ("DMP") and the Pilbara Native Title Service.

The initial drill program will test two high priority shallow targets, the Wolf prospect and the footwall of the main Prairie resource as well as a number of regional anomalies.

The Wolf prospect, two kilometers north of the known resource of the Prairie Downs Fault Zone, shows a strong geochemical alteration and geophysical target on the southern side of the structure that is over one kilometer long. This shallow anomaly will be tested in three fences of holes down to 150m depth.

The footwall of the main Prairie deposit hosts a resource in the 'Gabbro Zone', a splay off the main structure. A number of other potential fault splays and sediments showing strong silicification on surface will be drilled in fences to 150m depth. Follow up of any intersections will be planned for later deeper drilling.

The geochemical survey has covered a number of regional anomalies and drill targets have been defined at the Hyena, West Hyena and Husky prospects. Drill testing of these prospects is planned in a second phase of drilling in 2011.

Regional assessment has included an Aster satellite image alteration interpretation that has highlighted areas of strong chlorite, epidote and kaolinite response. The portable XRF geochemical survey will continue to target these areas.

Previous drilling at the project has concentrated only on the known Prairie resource with limited work on other deposits in the belt or on associated mineralization.