International Minerals Reports Operating Achievements and Financial Results for First Fiscal Quarter Ended September 30, 2012

2012-11-15 00:07:54 -

SCOTTSDALE, AZ -- (Marketwire) -- 11/14/12 -- International Minerals Corporation (TSX: IMZ) (SWISS: IMZ) ("Company" or "IMZ") is pleased to report its operating achievements and financial results for the first fiscal quarter ended September 30, 2012.

All dollar amounts in this news release are reported in US Dollars, unless otherwise noted.

Significant Achievements for the First Fiscal Quarter Ended September 30, 2012 (the "Current Quarter"):

The Company received a $6.0 million cash distribution from the Pallancata Mine in July 2012, bringing the Company's 40%-share (Hochschild Mining plc "Hochschild" 60%-owner and operator) of cumulative cash distributions from Pallancata to $115.7 million since August 2009. The Company has also been advised by the Suyamarca Board of Directors that it should expect to receive a further cash distribution of $4.0 million from Pallancata in December 2012.

At the 40%-owned Inmaculada development project also in Peru (Hochschild 60%-owner and operator), development is progressing on schedule and Hochschild has completed its $100 million contractual development cost commitment. In September 2012, the Peruvian government approved the Environmental Impact Study for Inmaculada, achieving a critical milestone in the project's development.

At the 100%-owned Goldfield property in Nevada, the Company has engaged the services of M3 Engineering and Technology Corporation ("M3") of Tucson, Arizona to manage the Engineering, Procurement and Construction Management ("EPCM") activities relating to the design and construction of the Gemfield project heap leach gold mine. M3 has commenced the detailed design activities for this project. SRK Consulting of Reno Nevada has been contracted to complete the project Plan of Operations ("PoO") which will be used in the preparation of the Environment Impact Statement and permitting. The PoO is expected to be filed with the US Bureau of Land Management ("BLM") in December of 2012. Permitting is expected to commence in the first calendar quarter of 2013 and is expected to take approximately 18 months from approval of the PoO.

Also at the Gemfield project, the Company continues with on-going process optimization studies and step-out drilling in the recently discovered Gemfield Southeast area. In addition, results of the recent metallurgical test work have illustrated that a larger crush size could possibly allow for a 25% increase in plant throughput (to 7,500 tpd) with no significant decrease in recoveries. This could mean that estimated processing operating costs may be reduced by 11% from $6.36 per tonne to $5.65 per tonne and G&A costs may be reduced by 20% from $2.92 per tonne to $2.34 per tonne; a combined potential reduction of approximately 14% in total operating costs. Additional metallurgical testwork, however, will be required to confirm the recoveries from the larger crush size.

Financial Performance for the First Fiscal Quarter Ended September 30, 2012:

The Company:

Reported net income from continuing operations after tax for the first fiscal quarter ended September 30, 2012 of $10.7 million or $0.09 per share compared to net income from continuing operations after tax of $14.5 million or $0.12 per share for the fiscal quarter ended September 30, 2011 (the "Prior Year's Quarter), reflecting in both periods the earnings from the Pallancata Mine.

Reported cash flow from continuing operations of $6.0 million for the Current Quarter compared to $18.2 million for Prior Year's Quarter, with the change representing the difference in the cash distributions from the Pallancata Mine during the respective quarters.

Reported a net loss from discontinued operations after tax of $1.1 million for the Current Quarter compared to net income from discontinued operations after tax of $0.7 million for the Prior Year's Quarter. The loss from discontinued operations in the Current Quarter represents on-going maintenance costs in Ecuador while the contribution to income in the Prior Year's Quarter was income from the Ruby Hill mine royalty.

Reported net and comprehensive income after tax of $9.6 million or $0.08 per share, for the Current Quarter compared to net and comprehensive income of $15.2 million or $0.13 per share, for the Prior Year's Quarter. The most significant reason for the decline in earnings was because of a reduction in earnings from the Pallancata Mine that was a result of lower metal production and a decline in the prices of gold and silver.

At the Pallancata Mine:

i.  The Company's 40% share of the equity income from the Pallancata Mine
    was approximately $10.7 million for the Current Quarter compared to
    $15.1 million for the Prior Year's Quarter. Cash distributions paid to
    the Company for the Current Quarter totaled $6.0 million compared to $16
    million in the Prior Year's Quarter;


ii. Production for the Current Quarter (on a 100% basis) was approximately
    1.9 million ounces of silver (Prior Year's Quarter: 2.3 million ounces)
    and 6,814 ounces of gold (Prior Year's Quarter: 9,370 ounces). The
    Company's 40% share was approximately 757,310 ounces of silver (Prior
    Year's Quarter: 916,322 ounces) and 2,726 ounces of gold (Prior Year's
    Quarter: 3,748 ounces). The reasons for the decrease in gold and silver
    production were lower ore grades and metallurgical recoveries compared
    to the Prior Year's Quarter.


iii. For the Current Quarter, direct site cash costs were $4.69 per ounce of
    silver produced after gold by-product credit (Prior Year's Quarter:
    $1.01 per ounce) and total cash costs after gold by-product credit (as
    defined by the Gold Institute) were $8.49 per ounce of silver produced
    (Prior Year's Quarter: $5.44 per ounce). For the Current Quarter
    compared to the Prior Year's Quarter total cash operating costs, before
    by-product credit, decreased by 3% and, therefore, both direct site and
    total cash costs per ounce reported increased because of lower by-
    product credits and a decrease in silver production.

Operating Statistics for the Pallancata Mine (100% project basis).

The table below reports key operating and cost statistics for the Pallancata Mine for the fiscal quarters ended September 30, 2012 and 2011 and for the fiscal years ended June 30, 2012 and 2011.


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                                   Quarter    Quarter    Fiscal     Fiscal
                                    Ended      Ended   Year Ended Year Ended
                                 09/30/2012 09/30/2011 06/30/2012 06/30/2011
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Ore mined (tonnes)                  276,459    269,273  1,041,857  1,069,428
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Ore processed (tonnes)              277,092    268,673  1,090,033  1,063,008
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Head grade- Ag (grams/tonne)            257        313        280        324
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Head grade- Au (grams/tonne)            1.2        1.4        1.2        1.4
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Concentrate produced (tonnes)         2,073      2,266      8,380      8,622
----------------------------------------------------------------------------
Silver production (ounces)        1,893,274  2,290,805  8,185,244  9,461,573
----------------------------------------------------------------------------
Gold production (ounces)              6,814      9,370     29,689     34,517
----------------------------------------------------------------------------
Silver sold ( ounces)             1,651,900  1,935,300  8,127,900  9,531,300
----------------------------------------------------------------------------
Gold sold (ounces)                    5,870      8,017     28,766     32,824
----------------------------------------------------------------------------
IMZ direct site costs (US$)            4.69       1.01       3.31       2.21
----------------------------------------------------------------------------
IMZ total cash costs (US$)             8.49       5.44       7.37       6.04
----------------------------------------------------------------------------

Notes:
1. The reported head grades for silver and gold are based on the overall metallurgical balance for the process plant.
2. The difference between "produced" metal ounces and 'sold" metal ounces is in-process concentrate. Numbers for gold and silver ounces in the sold category have been rounded.
3. Silver and gold ounces sold are now reported as gross ounces. IMZ has also restated the previously reported sales, which had been reported as net payable ounces.
4. Direct site costs per ounce silver and total cash costs per ounce silver reflect a "mined ore inventory adjustment". IMZ believes that this calculation more accurately matches costs with ounces of production (see notes 5 and 6 below).
5. Direct site costs per ounce silver comprise direct mining costs, mined ore inventory adjustment, toll processing costs and. mine general and administrative costs. The cost per ounce is net of by-product credit, with by-product gold revenue offsetting operating costs.
6. Total cash costs, using the Gold Institute definition, comprise: mine operating costs, mined ore inventory adjustment, toll processing costs, mine general and administrative costs, Hochschild management fee, concentrate transportation and smelting costs, and government royalty (currently approximately 3% of gross revenue for Pallancata). The cost per ounce is net of by-product credit, with by-product gold revenue offsetting operating costs.

Company Outlook

During the 2013 fiscal year, the Company's exploration and development efforts are expected to focus primarily on:

At the 40%-owned Pallancata Silver Mine in Peru:

Working with Hochschild to continue production at the 3,000 tpd mining rate to produce approximately 7.8 million ounces of silver and 32,000 ounces of gold, in calendar 2012 (the Company's estimate on a 100% project basis) and increasing mineral resources and reserves to extend the existing mine life (approximately 4.0 years based on current reserves).

At the 40%-owned Inmaculada gold-silver project, also in Peru:

Working with Hochschild to continue with mine development, permitting and construction with production targeted to commence prior to the end of calendar year 2013, subject to the timely receipt of final construction permits, and continuing with an aggressive exploration program in order to expand reserves and resources.

At the 100%-owned Goldfield property in Nevada: advancing the Gemfield project to construction in 2014, following the completion of permitting, with the goal of potential production in mid-calendar year 2015.

At the 100%-owned Converse gold project, also in Nevada: continuing with additional technical studies depending upon the results of on-going metallurgical testwork.

Finalize the sale of the 100%-owned Rio Blanco gold-silver project and the approximately 60%-owned Gaby project in Ecuador.

Continuing to seek investment opportunities in precious metals properties in low political risk jurisdictions in the Americas, where the Company believes it can increase the value of such properties using its exploration, development, financing and administrative abilities to enhance value.

Hochschild Mining plc does not accept any responsibility for the adequacy or inadequacy of the disclosure made in this news release and any such responsibility is hereby disclaimed in all respects.

The Company's Financial Statements and Management's Discussion and Analysis (MD&A) are posted on the Company's website at: www.intlminerals.com/investors/financial-reports : ctt.marketwire.com/?release=954477&id=2291374&type=1& .. or at www.sedar.com : ctt.marketwire.com/?release=954477&id=2291377&type=1& .. under the Company's name.

Cautionary Statement:

The Gold Institute calculation of Direct Site Costs and Total Cash Costs are non-IFRS financial measures, which Company management believes are useful in measuring operational performance. 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, production expectations, metallurgical recoveries and operating costs, drilling and development programs on the Company's projects, timing relating to the completion of the sale of Rio Blanco and Gaby projects, and timing of completion of economic studies, construction and production, construction and production permits. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties such as: risks relating to obtaining mining and environmental permits; delays in completing economic studies mining and development risks; the uncertainty in estimating and then obtaining the fair market value of the Rio Blanco and Gaby properties, financing risks; risk of commodity price fluctuations; the uncertainty in estimating metallurgical recoveries and operating costs, political and regulatory risks; and other risks and uncertainties detailed in the Company's Annual Information Form for the year ended June 30, 2012, which is available at www.sedar.com : ctt.marketwire.com/?release=954477&id=2291380&type=1& .. 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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Nature and continuance of operations

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The accompanying notes are an integral part of these consolidated financial statements and can be found on the Company's website at: http://www.intlminerals.com/investors/financial-reports : ctt.marketwire.com/?release=954477&id=2291383&type=1& .. .

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The accompanying notes are an integral part of these consolidated financial statements and can be found on the Company's website at: http://www.intlminerals.com/investors/financial-reports : ctt.marketwire.com/?release=954477&id=2291386&type=1& .. .

###PRECONTENT5###

The accompanying notes are an integral part of these consolidated financial statements and can be found on the Company's website at: http://www.intlminerals.com/investors/financial-reports : ctt.marketwire.com/?release=954477&id=2291389&type=1& .. .

For additional information, contact:

In North America:
Paul Durham
VP Corporate Relations
Tel: +1 203-940-2538

Renmark Financial Communications:
Christine Stewart
+1-416-644-2020
Email Contact : www2.marketwire.com/mw/emailprcntct?id=912D3CDA23430CF5
or
Robert Thaemlitz
+1-514-939-3989
Email Contact : www2.marketwire.com/mw/emailprcntct?id=859CA73C1FE04D61

In Europe:
Oliver Holzer
Marketing Consultant
+41 44 853 00 47

Or email us at: Email Contact : www2.marketwire.com/mw/emailprcntct?id=EAF9695E4909A5C4
Internet Site: http://www.intlminerals.com : www.intlminerals.com/