IMZ Reports $7.2 million Net Income (Before Taxes)
for First Fiscal Quarter Ending September 30, 2010.
Equity Income of $9.2 million from Pallancata Silver Mine
Scottsdale, Arizona, November 12, 2010 � International Minerals Corporation (Toronto and Swiss stock exchanges: �IMZ�, the �Company�) reports results for the fiscal first quarter ending September 30, 2010 (the �current quarter�) of $7.2 million in consolidated net income before income tax provisions, including net equity earnings of $9.2 million for the 40%-owned Pallancata Mine in Peru. All amounts in this news release are reported in US dollars.
Highlights
During the 3-month period from July 1, 2010 through September 30, 2010, the Company accomplished the following significant results:
-
Completed the current quarter with approximately $25.4 million in cash, aggregate working capital of approximately $25.7 million, total assets of approximately $321.5 million and retained earnings of approximately $753,000.
-
Produced approximately 2.5 million ounces of silver and 8,254 ounces of gold from the Pallancata Mine (100% project basis), compared to 2.5 million ounces of silver and 9,320 ounces of gold (100% project basis) in the prior quarter ended June 30, 2010. Of this total production, the Company�s 40% share was approximately 1.0 million ounces of silver and 3,728 ounces of gold. The decrease in gold ounces produced from the previous quarter results mainly from a decrease in average head-grade mined.
Additional Financial Information for the Current Quarter:
The consolidated net income for the current quarter was $7.2 million before provisions for income taxes and $4.4 million after taxes ($0.04 basic and diluted per share) compared to a net income after taxes of $1.2 million ($0.01 basic and diluted per share) for the equivalent period in 2009. The increase in income between the comparative periods resulted primarily from net equity income received from the Pallancata Mine joint venture of $8.9 million ($5.0 million in 2009), net royalty income of $0.7 million ($Nil in 2009) and no foreign exchange loss ($1.6 million in 2009), offset by the impact of the income tax provision for the Pallancata Mine of $2.8 million ($Nil in 2009).
The Company realized gross equity income from the Pallancata Mine for the current quarter of $9.2 million (2009 � $5.2 million). Equity income was greater in the current quarter as the mine was operating at higher production rates than in the comparative period of 2009. Net equity income is offset by expenses for non-reimbursable joint venture monitoring costs of $73,425 (2009 - $164,348) and amortization of $249,267 (2009 - $99,288), capitalized in previous years.
No dividend payments were received in the current quarter from the Pallancata Mine, but a dividend distribution is expected to be received before the end of the calendar year. The Pallancata joint venture company (Suyamarca) does not have a policy with respect to the quarterly payment of dividends. Dividends are distributed on an ad hoc basis by Suyamarca dependent upon the cash flow requirements at the Pallancata Mine. IMZ has received $16 million in dividends to date from the mine in calendar year 2010.
Other income included royalty income from the Ruby Hill Mine of $820,382 (2009 - $Nil) and interest earned on cash and equivalents of $36,022 (2009 - $111,877).
Capitalized resource property expenditures for the current quarter were $5,694,630 compared to $1,433,176 for the same period last year, reflecting increased expenditures on the additional projects acquired following the acquisitions of Ventura Gold Corp. and Metallic Gold Ventures, Inc. early in 2010.
The Company reports its interest in the Pallancata Mine on an equity accounting basis and its interest in the Inmaculada property on a 100% basis less the non-controlling interest of Hochschild.
Company Outlook
During the balance of fiscal year 2011, the Company's exploration and development efforts are expected to focus primarily on:
Working with our joint venture partner, Hochschild to continue production at the 3,000 tpd mining rate, and produce approximately 10 million ounces of silver and 33,000 of gold in calendar 2010 (the Company�s estimate on a 100% project basis).
Increasing mineral resources and reserves to extend the existing mine life (approximately 4 years based on current reserves).
-
Continuing with the aggressive exploration and development at the Inmaculada Project, working with Hochschild to move the project into production in three years following the recent Framework Agreement to sell 11% of the Company's ownership to Hochschild so that Hochschild will own a 60% interest (and become operator) and the Company will own a 40% interest (See News Release dated October 12, 2010 for details of the Framework Agreement).
-
Undertaking further discussions with the Ecuadorian government with respect to clarification of certain tax and royalty issues related to the 2009 Mining Law, in order to advance the 100%-owned Rio Blanco gold-silver project and the Gaby gold project (approximately 60% IMZ interest in the estimated contained resource ounces).
-
Continuing to seek additional strategic joint venture alliances, such as that with Hochschild at Pallancata and Inmaculada, in order to fast-track projects and to reduce future cash outlays by the Company.
To view the Company�s complete financial statements, please click the following link: http://www.intlminerals.com/release.php?R_ID=124&Kind=FS&Rel=S
To view the Company�s management discussion and analysis (MD&A), please click the following link:
http://www.intlminerals.com/release.php?R_ID=124&Kind=FS&Rel=M
For additional information, contact:
In North America:
Paul Durham, Vice President Corporate Relations
Tel: 1 (203) 940 2538
In Europe:
Oliver Holzer, Marketing Consultant
+41 (0) 44 854 11 39
Or email the Company at:
IR@intlminerals.com
Internet Site: http://www.intlminerals.com
Cautionary Statement:
The Gold Institute calculation of Direct Site Costs and Total Cash Costs are non-Canadian GAAP 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, drilling and development programs on the Company�s projects, timing of commencement of construction and production and, obtaining of required environmental 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; mining and development risks; financing risks; risk of commodity price fluctuations; political and regulatory risks; risks related to the new mining law in Ecuador, and other risks and uncertainties detailed in the Company�s Amended Annual Information Form for the year ended June 30, 2010, 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.
|