International Minerals Reports Low Cash Costs at Pallancata Silver Mine, Peru
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Scottsdale, Arizona, October 2, 2008 � International Minerals Corporation (TSX and SWX: �IMZ�) reports Total Cash Costs of US$5.89 per ounce of silver produced, net of gold by-product credits (US$3.30 per ounce for Direct Site Costs) at the Pallancata Mine for the fiscal fourth quarter ended June 30, 2008 (see Table below for details). The Pallancata Mine, located in southern Peru, is jointly owned by IMZ (40% interest) and Hochschild Mining plc (�Hochschild�, 60% interest). Hochschild is the mine operator.
Stephen Kay, President and Chief Executive Officer of IMZ said, �The Pallancata Mine, as well as being a low-cost producer, is currently one of the top-two primary silver mines in Peru in terms of silver reserves. With the planned ramp-up of underground production at Pallancata to 2,000 tonnes per day, scheduled to be completed by calendar year-end 2008, it is likely that Pallancata will become one of the top-10 largest primary silver producing mines in the world in 2009. This is quite an achievement considering that production only commenced a year ago. Hochschild are to be complimented on their aggressive development of the Pallancata Mine.�
The Company has realized net earnings from the Pallancata Mine for the fiscal year ended June 30, 2008 of approximately US$4.2 million. Because of the use of cash flow for the ongoing aggressive capital expansion program at Pallancata, to date there have been no cash dividends distributed to the joint venture partners. Cash dividends are expected to commence, however, in the first half of calendar year 2009.
Initial construction of the mining operation at Pallancata was funded 100% by Hochschild, with IMZ carried for its 40% interest. However, IMZ�s 40% share of replacement capital costs, exploration costs and the costs of expansion of mine production above 1,000 tonnes per day (�tpd�) is required to be funded by IMZ, with such funding expected to be covered by IMZ�s 40% share of the mine�s ongoing cash flow.
Total Cash Costs at the Pallancata Mine, using the Gold Institute�s definition, include: mine operating costs, toll processing costs, mine general and administrative costs, Hochschild�s management fee, concentrate transportation and smelting costs, taxes and the Peruvian government royalty (currently 1% of gross revenue for Pallancata).
As Hochschild was responsible for funding all start-up capital expenditures and expansion capital up to the 1,000 tpd mining rate, IMZ currently has no depreciation expense related to the Pallancata Mine.
The Gold Institute calculation of Total Cash Costs is a non-Canadian GAAP financial measure, which IMZ management believes is useful in measuring operational performance. Total Cash Costs as defined by the Gold Institute do not include depreciation or mine reclamation costs.
The technical information reported in this news release was reviewed by IMZ�s Qualified Person, Technical Manager Nick Appleyard.
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.
For additional information, contact Wendy Yang at (1) 303-357-4863
Internet Site: http://www.intlminerals.com E-mail:email@example.com
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 timing and scale of production, processing and mine expansion; and capital cost estimates. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties such as: risks relating to estimates of production and processing rates; risks of cost overruns and completion delays; risks of variances between mineral reserves and actual mineral production 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.