IMZ Announces Major Increase in Reserves at Pallancata Mine

Scottsdale, Arizona, August 25, 2008 – International Minerals Corporation (TSX and SWX: “IMZ”) announces a major increase in mineral reserve estimates for the Pallancata silver-gold mine in southern Peru. Pallancata is jointly owned by IMZ (40% interest) and Hochschild Mining plc (“Hochschild”, 60% interest and operatorship).

The new Proven and Probable Reserve estimate (“Reserves”), on a 100% project basis, comprise 5.9 million tonnes at an average grade of 330 grams per tonne (“g/t”) silver and 1.2 g/t gold, containing a total of 62.3 million ounces of silver and 232,000 ounces of gold (or approximately 75.5 million ounces of silver equivalent using $10.50 per ounce silver and $600 per ounce gold). 

These new Reserves represent a more than 80% increase from the previously-announced Reserve estimates in March 2008 and more than a 450% increase from the Reserves estimated in a pre-feasibility study in August 2007.

In addition, a further 10.1 million ounces of silver and 34,000 ounces of gold (approximately 12 million ounces of silver equivalent) are contained in Inferred Resources of 852,000 tonnes at an average grade of 369 g/t silver and 1.2 g/t gold.

Commenting on the news, Stephen Kay, President and Chief Executive Officer of IMZ said, “We are extremely pleased that IMZ’s discovery of Pallancata in 2003 continues to fulfill its rich potential with this significant addition to mineral reserves. With the expected ramp-up of underground production from the current rate of approximately 1,000 tonnes per day (tpd) to 2,000 tpd by the end of 2008, we expect Pallancata to produce significant cash flow for many years to come.”

Table 1 below shows estimated Mineral Reserves and Resources for the Pallancata Mine (effective date of June 30th, 2008) based on information supplied by the mine operator, Hochschild.  Resources and Reserves are reported at a cut-off grade of 148 g/t silver equivalent, which reflects a marginal economic cut-off value of $44 per tonne using metal prices of US$10.50 per ounce of silver and US$600 per ounce of gold. Hochschild’s data and methodology have been reviewed by IMZ’s Technical Manager Nick Appleyard, who is a Qualified Person as defined by National Instrument 43-101 (“NI 43-101”). IMZ will be filing a Technical Report on Sedar in support of this disclosure within 45 days.

Table 1: Pallancata Mine – Mineral Reserve and Resource Estimates (as of June 30, 2008)

1.     Measured and Indicated Resources include Proven and Probable Reserves.

2.     Metal prices used are US$10.50/oz for silver and US$600/oz for gold.

3.     The estimated reserves include an allowance of 5% for ore loss during mining and up to 20% for dilution with zero grade depending on individual stope configuration.

4.     The estimated mineral resources are not mineral reserves and do not have demonstrated economic viability.

5.     Numbers have been rounded in all categories to reflect the precision of the estimates.

6.     The mineral resources were estimated using ordinary kriging for the western portion of the vein and inverse distance to the power of five for the central part of the vein and for peripheral veins.  All of the Measured Resources and Proven Reserves stated above were estimated by ordinary kriging only.

7.     Contained metal in estimated reserves remains subject to metallurgical recovery losses.

8.     The resource and reserve estimates reflect the deposit at Pallancata as of June 30, 2008. Since June 30th, approximately 68,000 tonnes have been processed at an average grade of 343 g/t silver and 1.6 g/t gold. This equates to approximately 752,000 ounces of silver and 3,400 ounces of gold that have been depleted from the estimated reserves in Table 1.

9.     Total production up to June 30^th is approximately 213,000 tonnes at an average grade of 329 g/t silver and 1.6 g/t gold.  This equates to approximately 2.2 million ounce of silver and 10,950 ounces of gold produced.

IMZ reported production data for the Pallancata Mine for the second calendar quarter of 2008 in a July 24, 2008 news release. Silver and gold production both increased by approximately 66% compared to the first calendar quarter of 2008, producing a total of 829,000 ounces silver and 3,230 ounces gold (or approximately 1.0 million ounces of silver equivalent, using a silver-to-gold ratio of 60:1).  IMZ’s 40% share of second calendar quarter production was 331,600 ounces of silver and 1,292 ounces of gold (approximately 409,000 ounces of silver equivalent). Production costs for the Pallancata Mine will be issued as soon as available.

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:information@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 timing and scale of production and processing and estimates of reserves and resources. 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 estimating mineral resources and reserves, 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, 2007, 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.

International Minerals Corporation
7950 E. Acoma Drive, Suite 211
Scottsdale, AZ 85260
U.S.A.
Tel: (480) 483-9932 • Fax: (480) 483-9926