SCOTTSDALE, AZ--(Marketwire - September 28, 2011) - International Minerals Corporation (TSX: IMZ) (SWISS: IMZ) (the "Company") reported record annual pre-tax earnings of $58.4 million for the fiscal year ended June 30, 2011 (the "Current Fiscal Year"). Net income for the Current Fiscal Year after the provision for future income taxes was also a record at $53.9 million or $0.46 per share.

For the quarter ended June 30, 2011 (the "Current Quarter"), the Company reported net earnings of $22.5 million after the provision for future income taxes and net earnings of $20.3 million before a recovery of future income taxes.

The record earnings for the Current Fiscal Year were driven by net equity earnings from the Pallancata Mine of $54.6 million. In addition, IMZ recorded net royalty income from the 3% Net Smelter Return royalty at Barrick's Ruby Hill Mine in Nevada (the "Barrick Royalty") of $3.3 million and a gain on the sale of an 11% interest in the Inmaculada property of $14.7 million.

Subsequent to June 30, 2011, the Company received a further cash dividend of $16 million from the Suyamarca joint venture (representing its 40% interest in the Pallancata Mine). The Company has now received dividends totaling $85.6 million from the Pallancata Mine since August 2009.

All dollar amounts in this news release are reported in US Dollars.

Highlights for the Current Fiscal Year ended June 30, 2011

During the Current Fiscal Year, the Company achieved the following significant results:

• The Company reported net and comprehensive earnings of $53.9 million or $0.46 per share after the provision for future income taxes and net income of $58.4 million before the provision for future income taxes.
  
  The net earnings of $53.9 million after the provision for future income taxes compares to net earnings of $8.9 million or $0.09 per share for the fiscal year ended June 30, 2010 (the "Prior Fiscal Year"). For the Prior Fiscal Year net earnings before the provision for future income taxes were $15.5 million.
  
• Cash and equivalents at June 30, 2011 increased to $86.1 million compared to $29.1 million at June 30, 2010 or an increase of 196%.
  
  
• Recorded record gross royalty revenue from the Barrick Royalty of $5.3 million compared to $0.9 million for the Prior Fiscal Year.
  
  
• At the Pallancata Mine in Peru:
  
  
  • The Company's 40% share of the Pallancata Mine realized annual net equity earnings of $54.6 million (after the deduction of the Company's technical and administrative monitoring costs and the amortization of certain non-reimbursable costs), compared to $27.5 million for the Prior Fiscal Year.
    
    
  • The Company received net cash dividends of $36 million compared to $23.6 million for the Prior Fiscal Year. 
    
    
  • The Pallancata Mine (on a 100% project basis) produced approximately 9.5 million ounces of silver and 34,517 ounces of gold compared to 10.1 million ounces of silver and 37,405 ounces of gold in the Prior Fiscal Year. Metal production declined marginally primarily because higher metal prices allowed Pallancata to profitably process lower grade ore.
    
    
  • The Company's 40% share of Pallancata Mine production was approximately 3.8 million ounces of silver and 13,807 ounces of gold compared to the Prior Fiscal Year's production of approximately 4.0 million ounces of silver and 14,962 ounces of gold.
    
    
  • The Company's direct site cash costs were lower than in the Prior Fiscal Year at $2.21 per ounce silver produced (after gold by-product credits). Total cash costs (as defined by the Gold Institute) were $6.04 per ounce silver (after gold by-product credits). For the Prior Fiscal Year the Company's, direct site cash costs and total cash costs were $2.48 and $5.32 per ounce silver, respectively.
    
    
• The Company also reported favorable exploration results at both the Goldfield and Converse projects in Nevada with Goldfield's measured and indicated resource estimate increasing by 179,000 contained ounces (17%) and Converse's measured and indicated resource estimate increasing by 1,209,000 contained ounces (31%).
  
  
• The Company strategically restructured its joint venture relationship with Hochschild in order to fast track development of the Inmaculada project in Peru while minimizing the Company's capital spending obligations at Inmaculada and also materially increasing its available cash which will be strategically deployed in other projects, with a focus on Nevada.
  
  

Highlights for the Quarter Ended June 30, 2011 (the "Current Quarter"):

During the Current Quarter, the Company achieved the following significant results:

• Reported net and comprehensive earnings of $22.5 million or $0.19 per share after the provision for future income taxes and net income before a recovery of future income taxes of $20.3 million.
  
  The $22.5 million in net earnings after the provision for future income taxes is compared to a net loss of $0.7 million or ($0.01) per share for the fourth quarter ended June 30, 2010 (the "Prior Quarter"). For the Prior Fiscal Quarter, net earnings before the provision for future income taxes were $5.9 million.  

• Recorded record gross royalty revenue from the Barrick Royalty of $1.8 million compared to $0.5 million for the Prior Quarter.
  
  
• At the Pallancata Mine in Peru:
  
  
  • The Company's 40% interest in the Pallancata Mine realized quarterly net equity earnings of $12.9 million after the deduction of the Company's monitoring costs and the amortization of certain non-reimbursable costs, compared to $8.5 million for the Prior Quarter.
    
    
  • The Pallancata Mine (100% project basis) produced approximately 2.2 million ounces of silver and 8,427 ounces of gold compared to 2.5 million ounces of silver and 9,320 ounces of gold in the Prior Quarter.
    
    
  • The Company's 40% share of production was approximately 0.9 million ounces of silver and 3,371 ounces of gold compared to the Prior Quarter's production of 1.0 million ounces of silver and 3,728 ounces of gold.
    
    
  • The Company's direct site cash costs and total cash costs per ounce of silver produced, net of gold credits, (as defined by the Gold Institute) were $2.87 and $7.89 respectively compared to $2.40 and $5.47 per ounce of silver produced, respectively for the Prior Quarter.
    
    

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

The table below reports key operating and cost statistics for the Pallancata Mine for the quarters ended June 30, 2011 and 2010 and for the fiscal years ended June 30, 2011 and 2010.

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 2012 fiscal and calendar years the Company's exploration and development efforts are expected to focus primarily on:

• At the Pallancata Silver Mine in Peru:
  
  
  • Working with Hochschild to continue production at the 3,000 tpd mining rate to produce approximately 9.3 million ounces of silver and 36,500 ounces of gold (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).
    
    
• At the Inmaculada gold-silver project in Peru:
  
  
  • Working with Hochschild to continue with the aggressive exploration and development program.
    
    
  • Completing a feasibility study by the end of calendar year 2011.
    
    
  • Moving the project into production by approximately December, 2013, pursuant to the agreement entered into with Hochschild in December 2010.
    
    
• At the Goldfield gold project in Nevada, completing a feasibility study, including commencing an Environmental Impact Study by the middle of calendar year 2012, with the goal of commencing heap leach production in 2015.
  
  
• At the Converse gold project in Nevada, completing a scoping study by the end of December 2011 and commencing feasibility study in 2012.
  
  
• At the Rio Blanco gold-silver project in Ecuador, commencing construction of a mine, following receipt of permits and concluding the negotiation of a production contract with the Ecuador Government by December 2011, which will include clarification of certain tax, royalty and foreign investment issues related to the 2009 Mining Law.
  
  
• Also subject to clarification of the mining law issues mentioned above, advancing the Gaby gold project with the commencement of a feasibility study.
  
  
• Enhancing cash flow by acquiring a producing asset in a low-risk political and environmental jurisdiction in the Americas.
  
  
• Continuing to seek additional strategic joint venture alliances, such as that with Hochschild at Pallancata and Inmaculada, in order to fast-track projects to production and to reduce future cash outlays by the Company.
  
  

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.

To access the Company's full financial statements, please click this link: http://www.intlminerals.com/financialreports.php

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, production expectations, drilling and development programs on the Company's projects, timing of completion of economic studies, 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; delays in completing economic studies 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 Annual Information Form for the year ended June 30, 2011, 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.