IMZ Signs Binding Framework Agreement with Hochschild to Fast-Track Production at Inmaculada Gold-Silver Property, Peru

Scottsdale, Arizona, October 12, 2010 � International Minerals Corporation (Toronto and Swiss stock exchanges: �IMZ� or �the Company�) is pleased to announce that the Company has signed a binding Framework Agreement (the �Agreement�) with Hochschild Mining plc (�Hochschild�) to fast-track development, permitting and commencement of production at the IMZ/Hochschild jointly-owned Inmaculada property (�Inmaculada�) in southeastern Peru. Inmaculada is located 25km south of the Pallancata silver mine, which is jointly owned by IMZ (40%) and Hochschild (60%). 

IMZ currently controls a 70% interest in Inmaculada through its 51% direct ownership and its right to earn an additional 19% interest by completing a feasibility study before September 2013 and by issuing 200,000 IMZ shares to Hochschild. 

Based on the terms of the Agreement, IMZ would own a 40% interest in Inmaculada and Hochschild would hold the balance of 60%. The transaction remains subject to regulatory approvals and definitive documentation which will be prepared on an expedited basis. 

IMZ�s President and CEO, Stephen Kay stated: �We are pleased to sign this agreement with Hochschild to fast-track production at Inmaculada. It will now allow IMZ to focus its own efforts on expediting production at the 100%-owned Goldfield project in Nevada, where we are aggressively drilling and plan to complete a feasibility study by the end of next year with a targeted production date in 2014. The Inmaculada deal is structured in a similar way to the very successful Pallancata mine deal in 2006, where production was significantly accelerated and IMZ has already received about $24 million of free cash flow on an original investment by IMZ of only $5.5 million. It is worth noting that Pallancata will become the world�s fifth largest primary silver mine in 2010 after only three years of production. Hochschild has proven that it has an unparalleled track record of building and operating low-cost underground precious metal mines in difficult terrains in the high Andes. It also has a long history of permitting expertise, strong community relations programs and environmental management policies at its mining operations. We look forward to working with them again and to participating in another successful mine at Inmaculada�. 

Principal Terms of Agreement: 

• Hochschild will pay to IMZ US$15 million in cash on closing of the overall transaction. 

• Hochschild will undertake an equity investment in IMZ of US$20 million in the form of a private placement at a price of C$5.525 per share. Subject to regulatory approval, the placement is expected to be closed in the next 10 days.  

• Hochschild will provide 100% of the initial US$100 million of funding required for the planning, development and construction of a mining operation at the Angela Vein deposit at Inmaculada. Any subsequent expenditures will be funded 60% by Hochschild and 40% by IMZ. 

• IMZ is no longer required to complete a feasibility study at Inmaculada, nor to issue 200,000 common shares to Hochschild. 

• Hochschild will commit to building a mining operation at the Angela Vein deposit with a process capacity of 3,000 tonnes per day (unless the parties agree that such capacity is not optimal) within three years of closing of the transaction, subject to any unforeseen delays out of the control of Hochschild.  

• If Hochschild fails to achieve the process capacity within the three-year period, then Hochschild must make quarterly pre-payments to IMZ during the period of any delay based on the parties� joint estimate of IMC�s 40% share of income/cash flows that would have been generated if production had started on schedule. 

• Hochschild will be operator of the project. Upon commencement of commercial production, Hochschild will charge the joint venture company a 7.0% management services fee based on the aggregate operating costs incurred by the joint venture during such mining operation.  

• The management fee currently charged by Hochschild for the Pallancata Mine will be reduced from 10.0% to 7.0% from the date of closing of the transaction. 

• IMZ and Hochschild will contribute to the Inmaculada joint venture their respective ownerships in the Pacapausa property (80% Hochschild/20% IMZ), located adjacent to the Pallancata Mine and the Puquiopata property (100% IMZ), situated on the northern edge of the Inmaculada property. These contributions will result in both properties being owned 60% by Hochschild and 40% by IMZ. 

• A minimum of 20,000 meters of drilling per year for the first three years following the closing of the transaction (the �Exploration Drilling Program�) must be carried out for evaluation of exploration targets outside of the main Angela Vein deposit. The Exploration Drilling Program will be funded 60% by Hochschild and 40% by IMC. 

• Based on corporate and taxation considerations for Inmaculada, IMZ and Hochschild will either (a) use the existing Inmaculada joint venture company, Minera Quellopata S.A.C.; or (b) use the existing Pallancata Mine joint venture company, Minera Suyamarca S.A.C.; or (c) may form a new Peruvian joint venture company, whose shares will be held 60% by Hochschild and 40% by IMC. 

• Closing of the overall transaction, including transfer of property interests and definitive documentation is expected by December 2010. 

Inmaculada Resource Estimate and Scoping Study 

On September 9, 2010, IMZ announced the results of an updated, increased mineral resource estimate and an independent Preliminary Economic Assessment (or Scoping Study) for the Angela Vein deposit at Inmaculada. 

IMZ reported measured and indicated resources of 3.8 million tonnes at an average grade of 4.3 grams/tonne (�g/t�) gold and 129 g/t silver respectively (containing approximately 532,000 ounces of gold and 15.8 million ounces of silver or 796,000 ounces of gold equivalent) and inferred resources of 4.4 million tonnes at an average grade of 4.6 g/t gold and 200 g/t silver respectively (containing approximately 645,000 ounces of gold and 28.3 million ounces of silver. or 1,116,000 ounces gold equivalent). Both resource estimates were calculated using a 3 g/t gold equivalent cut-off grade and used a 60-to-1 silver-to-gold ratio. 

Highlights of the Scoping Study using $1,000 per ounce (�/oz�) gold and $17/oz silver included: 

• Conceptual mine production (after 5% mining loss and 20% mining dilution): 8.0 million tonnes (�Mt�) at an average grade of 3.8 g/t gold and 137 g/t silver or 6.1 g/t gold equivalent.
• Recovered ounces (�ozs�): 858,000 ozs gold and 29.3 million ozs silver or approximately 1.35 million ounces of gold equivalent (based on metallurgical recoveries of 88% for gold and 83% for silver).
• Pre-tax cash flows: $660 million non-discounted, $434 million at a 5% discount rate and $286 million at a 10% discount rate.
• Pre-tax Internal Rate of Return (�IRR�): 41%.
• Total cash operating cost per tonne: $52.
• Total cash operating cost/oz:
  • Basis gold with silver credited as a by-product: negative $94 per oz of gold.
  • Basis gold equivalent: $31/oz of gold equivalent. 
• Initial Capital: $168 million (including $32.9 million in contingency).
• Total cash operating cost per oz, including capital:
  • Basis gold with silver credited as a by-product: $231/oz.
  • Basis gold equivalent:  $517/oz
• 3,000 tonnes per day underground mine using a long hole stoping mining method and conventional recovery process by flotation to produce a saleable gold-silver concentrate.

General

The technical information reported in this news release was reviewed and approved by IMZ�s Qualified Person, VP of Corporate Development, Nick Appleyard. 

An updated NI 43-101 Technical Report for the Inmaculada project will be filed on SEDAR on or before October 22, 2010. 

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

About International Minerals 

International Minerals is a silver-gold producer and developer with silver and gold production from its 40%-owned Pallancata Mine in Peru, one of the top-10 primary silver mines in the world. Production of approximately 10 million ounces of silver and 33,000 ounces of gold (on a 100% project basis) is estimated by IMZ in calendar year 2010. 

In addition to the Pallancata Mine, IMZ also owns a 51% interest in the Inmaculada gold-silver project in Peru and majority or 100% ownership interests in development stage gold projects in Nevada (Goldfield and Converse) and Ecuador (Rio Blanco and Gaby). IMZ also owns a 3% net smelter return (NSR) royalty from Barrick�s Ruby Hill gold mine in Nevada, which produced approximately 100,000 gold ounces in 2009. 

IMZ is listed on the Toronto Stock Exchange (since 1994) and the Swiss Stock Exchange (since 2002). 

For additional information, contact:  

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

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

Or email us at: IR@intlminerals.com 
                                                      
Internet Site: http://www.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  estimates of capital and operating costs; economic returns; timing and significance of future cash flows and revenue from the project; timing and outcome of the announced transaction; and timing and scale of production and processing; and resource 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 relating to estimates of mineral resources; risks relating to capital and operating costs; risks relating to obtaining mining and environmental  permits; mining and development risks; risk of commodity price fluctuations; political and regulatory risks; risks of timing and completion of complex restructuring transactions; and other risks and uncertainties detailed in the Company�s Renewal 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.