NEWS RELEASE
International
Minerals Reports Strong Year-End Balance Sheet;
Equity Income of $4.2 million from the
Company’s 40%-Owned Pallancata Mine,
Peru
For
Financial Results and the PDF of this release, please use this link:
www.intlminerals.com
Scottsdale, Arizona, September 30, 2008 – International
Minerals Corporation (TSX and SWX: “IMZ” or “the Company”) realized equity
earnings of approximately $4.2 million from its 40% interest in the
Pallancata silver mine in Peru for the fiscal year ended June 30, 2008
(“fiscal year 2008”), from just three full fiscal quarters of production, as
the mine was only commissioned on September 9, 2007. All dollars refer to US
Dollars.
The Company essentially broke-even in
fiscal year 2008, reporting a small net loss of $0.17 million ($0.002 per
share) primarily due to resource property write-offs totaling $4.8 million,
which were non-core assets to IMZ.
IMZ continues to show a strong balance
sheet, reporting $60.4 million in cash and equivalents, aggregate working
capital of $58.4 million and total assets of $159 million at June 30,
2008.
During the fiscal year 2008 and to date, IMZ accomplished the
following:
· Commissioned the Company’s first operating mine on September 9, 2007,
with commercial production commencing from the 40%-owned Pallancata Mine
(“Pallancata”). The Company’s joint venture partner, Hochschild Mining PLC
(“Hochschild”), is the mine operator and holds a 60% interest in Pallancata.
- Realized fiscal year production (from September 9, 2007 to June
30, 2008) from the Pallancata Mine (100% property basis) of 2.0 million
ounces of silver and 7,920 ounces of gold from mining 212,745 tonnes of
ore, with the Company’s 40% share being 813,200 ounces of silver and
3,168 ounces of gold (see IMZ’s July 24, 2008 news release for details).
- Significantly increased the proven and probable mineral reserves
at the Pallancata Mine to 5.8 million tonnes at an average grade of 329
grams per tonne (“g/t”) silver and 1.2 g/t gold containing approximately
62.3 million ounces of silver and 232,000 ounces of gold on a 100% basis
(see August 25, 2008 news release for details). This updated reserve estimate
represents an 80% increase from the previously released reserve estimate
of March 2008 and a more than a 450% increase from the reserves
estimated in a pre-feasibility study in August 2007.
- Achieved the first National Instrument 43-101 (“NI-43-101”)
compliant, independent mineral resource estimate for the Gaby gold
project in Ecuador with an estimated 308.4 million tonnes at an average
grade of 0.63 g/t gold containing 6.2 million ounces of measured and
indicated gold resources (100% project basis). Approximately 3.8 million
ounces were attributable to IMZ. In February, the Company then increased
its share of Gaby’s measured and indicated resources to approximately
4.6 million ounces when it signed an option to acquire the remaining 50%
interest it did not already own in the Papa Grande deposit, which is one
of the two deposits comprising the Gaby project (see March 3, 2008 news
release for details).
IMZ also completed a
preliminary feasibility study at Gaby, which was not positive at a base-case
gold price of $650/oz. Further
optimization studies are underway evaluating a larger plant capacity,
significantly above the 20,000 tpd case used in the preliminary feasibility
study. (See February 11, 2008 news release for details.)
- Increased mineral reserves at the 100%-owned Rio Blanco
gold-silver project in Ecuador
with probable reserves estimated at 2.1 million tonnes at an average
grade of 8.8 g/t gold and 62 g/t silver, containing approximately
605,000 ounces of gold and 4.3 million ounces of silver (See August 2,
2007 news release for details.)
- Completed an initial core drilling program at the Urbaque gold
project in southern Peru,
with results that included a drill intercept of 30m at 0.9 g/t
gold. The Urbaque gold project is
contiguous with the Pallancata Mine property and is held under an option
agreement with Barrick whereby the Company is earning a 51% interest,
subject to a Barrick 60% back-in right.
- Expended $18.8 million in resource property activities mainly in
preliminary feasibility study drilling, metallurgy and field work for
the Gaby gold property in Ecuador;
for drilling, detailed engineering, environmental and other development
costs for the Rio Blanco gold-silver project in Ecuador;
and in exploration field work on the Antabamba and Urbaque projects in Peru.
OUTLOOK
During the balance of
fiscal year 2009, the Company's exploration and development efforts are
expected to focus primarily on:
·
Expanding mine production at the
40%-owned Pallancata Mine in Peru,
working with IMZ’s joint venture partner, Hochschild. Pallancata is producing
positive cash flow and the joint venture is expected to commence distributing
cash dividends to the joint venture partners in calendar first half 2009.
·
Obtaining required environmental and
production permits for the construction and development of a gold-silver
mining operation at Rio Blanco
in Ecuador, subject to the expiry of the April 2008 Mining Mandate and
finalization of the pending mining law, as well as additional required
financing. Construction could commence
about three months following granting of all the necessary permits. Given the pending new mining law in Ecuador,
it is uncertain when the permits will be approved.
·
Advancing an economic optimization study
as a step towards a final feasibility study, if warranted, at the Gaby gold project in Ecuador.
The optimization study is evaluating the potential for enhanced economics
based on a significantly higher production rate than used in the preliminary
feasibility study. The future status of Gaby will also depend on the pending
new mining law in Ecuador.
·
Continuing drilling at the Urbaque
property in Peru under the
joint venture agreement with Barrick and at the Pacapausa project in Peru
under the agreement with Southwestern and Hochschild.
·
Seeking new property acquisitions to
continuously replenish IMZ’s pipeline of projects, together with additional
strategic joint venture alliances, such as that with Hochschild at Pallancata
and Pacapausa, in order to advance projects with reduced additional cash
outlays by the Company.
For additional information, contact Wendy Yang at (1) 303-357-4863
Internet Site: http://www.intlminerals.com E-mail:information@intlminerals.com
Cautionary Statement:
Some of the statements contained
in this release are “forward-looking statements” within the meaning of
Canadian securities law requirements. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors that may cause our
actual results, performance or achievements to differ materially from the
anticipated results, performance or achievements expressed or implied by such
forward-looking statements. Forward-looking statements in this release
include statements regarding drilling and development programs on the
Company’s projects, timing of commencement and expansion of production,
completion of feasibility studies, obtaining of required environmental and
production permits, and timing and significance of future cash flows from
operations. Factors that could cause actual results to differ materially from
anticipated results include risks and uncertainties such as: risks relating
to estimates of mineral resources and reserve; risks relating to project
capital and production costs; risks relating to obtaining mining and
environmental permits; mining and
development risks; risk of commodity price fluctuations; political and
regulatory risks; and other risks and uncertainties detailed in the Company’s
Renewal Annual Information Form for the year ended June 30, 2008, which is
available at www.sedar.com under the Company’s name. The Company disclaims
any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.
Scottsdale, Arizona, September 30, 2008
– International Minerals Corporation
(TSX and SWX: “IMZ” or “the Company”) realized equity earnings of
approximately $4.2 million from its 40% interest in the Pallancata silver
mine in Peru for the fiscal year ended June 30, 2008 (“fiscal year 2008”),
from just three full fiscal quarters of production, as the mine was only
commissioned on September 9, 2007. All dollars refer to US Dollars.
The Company essentially broke-even in
fiscal year 2008, reporting a small net loss of $0.17 million ($0.002 per
share) primarily due to resource property write-offs totaling $4.8 million,
which were non-core assets to IMZ.
IMZ continues to show a strong balance
sheet, reporting $60.4 million in cash and equivalents, aggregate working
capital of $58.4 million and total assets of $159 million at June 30,
2008.
During the fiscal year 2008 and to date, IMZ accomplished the
following:
· Commissioned the Company’s first operating mine on September 9, 2007,
with commercial production commencing from the 40%-owned Pallancata Mine
(“Pallancata”). The Company’s joint venture partner, Hochschild Mining PLC
(“Hochschild”), is the mine operator and holds a 60% interest in Pallancata.
- Realized fiscal year production (from September 9, 2007 to June
30, 2008) from the Pallancata Mine (100% property basis) of 2.0 million
ounces of silver and 7,920 ounces of gold from mining 212,745 tonnes of
ore, with the Company’s 40% share being 813,200 ounces of silver and
3,168 ounces of gold (see IMZ’s July 24, 2008 news release for details).
- Significantly increased the proven and probable mineral reserves
at the Pallancata Mine to 5.8 million tonnes at an average grade of 329
grams per tonne (“g/t”) silver and 1.2 g/t gold containing approximately
62.3 million ounces of silver and 232,000 ounces of gold on a 100% basis
(see August 25, 2008 news release for details). This updated reserve estimate
represents an 80% increase from the previously released reserve estimate
of March 2008 and a more than a 450% increase from the reserves
estimated in a pre-feasibility study in August 2007.
- Achieved the first National Instrument 43-101 (“NI-43-101”)
compliant, independent mineral resource estimate for the Gaby gold
project in Ecuador with an estimated 308.4 million tonnes at an average
grade of 0.63 g/t gold containing 6.2 million ounces of measured and
indicated gold resources (100% project basis). Approximately 3.8 million
ounces were attributable to IMZ. In February, the Company then increased
its share of Gaby’s measured and indicated resources to approximately
4.6 million ounces when it signed an option to acquire the remaining 50%
interest it did not already own in the Papa Grande deposit, which is one
of the two deposits comprising the Gaby project (see March 3, 2008 news
release for details).
IMZ also completed a
preliminary feasibility study at Gaby, which was not positive at a base-case
gold price of $650/oz. Further
optimization studies are underway evaluating a larger plant capacity,
significantly above the 20,000 tpd case used in the preliminary feasibility
study. (See February 11, 2008 news release for details.)
- Increased mineral reserves
at the 100%-owned Rio Blanco gold-silver project in Ecuador
with probable reserves estimated at 2.1 million tonnes at an average
grade of 8.8 g/t gold and 62 g/t silver, containing approximately
605,000 ounces of gold and 4.3 million ounces of silver (See August 2,
2007 news release for details.)
- Completed an initial core
drilling program at the Urbaque gold project in southern Peru,
with results that included a drill intercept of 30m at 0.9 g/t
gold. The Urbaque gold project is
contiguous with the Pallancata Mine property and is held under an option
agreement with Barrick whereby the Company is earning a 51% interest,
subject to a Barrick 60% back-in right.
- Expended $18.8 million in
resource property activities mainly in preliminary feasibility study
drilling, metallurgy and field work for the Gaby gold property in Ecuador;
for drilling, detailed engineering, environmental and other development
costs for the Rio Blanco gold-silver project in Ecuador;
and in exploration field work on the Antabamba and Urbaque projects in Peru.
OUTLOOK
During the balance of fiscal year 2009, the Company's
exploration and development efforts are expected to focus primarily on:
· Expanding mine production at the 40%-owned
Pallancata Mine in Peru,
working with IMZ’s joint venture partner, Hochschild. Pallancata is producing
positive cash flow and the joint venture is expected to commence distributing
cash dividends to the joint venture partners in calendar first half 2009.
· Obtaining required environmental and
production permits for the construction and development of a gold-silver
mining operation at Rio Blanco
in Ecuador, subject to the expiry of the April 2008 Mining Mandate and
finalization of the pending mining law, as well as additional required
financing. Construction could commence
about three months following granting of all the necessary permits. Given the pending new mining law in Ecuador,
it is uncertain when the permits will be approved.
· Advancing an economic optimization study
as a step towards a final feasibility study, if warranted, at the Gaby gold project in Ecuador.
The optimization study is evaluating the potential for enhanced economics
based on a significantly higher production rate than used in the preliminary
feasibility study. The future status of Gaby will also depend on the pending
new mining law in Ecuador.
· Continuing drilling at the Urbaque
property in Peru under the
joint venture agreement with Barrick and at the Pacapausa project in Peru
under the agreement with Southwestern and Hochschild.
· Seeking new property acquisitions to
continuously replenish IMZ’s pipeline of projects, together with additional
strategic joint venture alliances, such as that with Hochschild at Pallancata
and Pacapausa, in order to advance projects with reduced additional cash
outlays by the Company.
For additional information, contact
Wendy Yang at (1) 303-357-4863
Internet Site: http://www.intlminerals.com E-mail:information@intlminerals.com
Cautionary Statement:
Some
of the statements contained in this release are “forward-looking statements”
within the meaning of Canadian securities law requirements. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause our actual results, performance or achievements
to differ materially from the anticipated results, performance or
achievements expressed or implied by such forward-looking statements.
Forward-looking statements in this release include statements regarding
drilling and development programs on the Company’s projects, timing of
commencement and expansion of production, completion of feasibility studies,
obtaining of required environmental and production permits, and timing and
significance of future cash flows from operations. Factors that could cause
actual results to differ materially from anticipated results include risks
and uncertainties such as: risks relating to estimates of mineral resources
and reserve; risks relating to project capital and production costs; risks
relating to obtaining mining and environmental permits; mining and development risks; risk
of commodity price fluctuations; political and regulatory risks; and other
risks and uncertainties detailed in the Company’s Renewal Annual Information
Form for the year ended June 30, 2008, which is available at www.sedar.com
under the Company’s name. The Company disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
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