SCOTTSDALE, AZ--(Marketwire - February 14, 2013) -   International Minerals Corporation (TSX: IMZ) (SWISS: IMZ) (the "Company") reports operating highlights and financial results for the second fiscal quarter ended December 31, 2012 ("Q2 2013").

For Q2 2013 the Company reported $5.5 million in income from continuing operations after tax, or $0.05 per share. After recording a $15.7 million loss on discontinued operations relating to the Ecuadorian resource properties, the Company reported a net and comprehensive loss after tax of $10.2 million, or $0.09 per share.

For the fiscal six month period ended December 31, 2012 ("H1 2013") the Company reported income from continuing operations after tax of $16.2 million, or $0.14 per share, and a net and comprehensive loss after tax of $0.6 million, or $0.00 per share. Included in the loss for H1 2013 was a loss on discontinued operations of $16.8 million related to the write-down of the Ecuadorian properties.

All amounts are in US Dollars unless otherwise stated.

Significant Achievements for the Period Ended December 31, 2012

• Received a $4.0 million cash distribution from the Pallancata silver mine in Peru (100%-owned by Minera Suyamarca S.A.C., "Suyamarca") in December 2012, bringing the Company's 40%-share of cumulative cash distributions from Pallancata to approximately $120 million since August 2009. Suyamarca is 60%-owned by Hochschild Mining plc ("Hochschild") and 40%-owned by the Company. Hochschild is the operator of the Pallancata Mine.
  
  
• Hochschild has completed funding of the first $100 million of expenditures for the development of the Inmaculada gold-silver project (also in Peru and also 100%-owned by Suyamarca) as required under the Suyamarca joint venture agreement. The Company's share of such expenditures at Inmaculada was carried by Hochschild until the $100 million expenditure milestone was reached by Hochschild. In November 2012, IMZ contributed its proportionate share ($8.0 million) of a $20 million cash-call for the ongoing development costs at Inmaculada.
  
  
• In November 2012, IMZ's Board of Directors approved the payment, commencing in January 2013, of an annual dividend of Cdn$0.12 per common share.
  
  
• The Company signed preliminary agreements for the sale of its resource properties in Ecuador. IMZ and the respective buyers are working closely with the Government of Ecuador to obtain the required government approvals in order to finalize these transactions.
  
  
• Basic engineering for the 100%-owned Gemfield heap leach gold project (at the Goldfield property) in Nevada continues to progress on schedule and is expected to be completed early in the next four to five months, at which time a revised capital cost estimate will be available. The Company anticipates filing its Plan of Operations with the U.S. Bureau of Land Management by the end of April 2013. Permitting is expected to start promptly thereafter and is expected to take approximately 18 months.
  
  
• The Company signed option agreements to explore three new early-stage precious metal exploration properties: Stonewall Spring and Rye in Nevada and Acoma in Peru.
  

Financial Performance for the Three-Month Period Ended December 31, 2012 (Q2 2013):

The Company:

• Reported net income from continuing operations after tax of $5.5 million, or $0.05 per share, compared to net income from continuing operations after tax of $10.3 million, or $0.08 per share, for the fiscal quarter ended December 31, 2011 ("Q2 2012"). The change in income from continuing operations primarily reflects lower earnings from the Pallancata Mine.
  
  
• Reported cash flow from continuing operations provided by operating activities of $2.5 million compared to $9.4 million for Q2 2012, with the change representing the difference in the cash distributions from the Pallancata Mine during the respective quarters. 
  
  
• Reported a net loss from discontinued operations after tax of $15.7 million compared to net income from discontinued operations after tax of $0.8 million for Q2 2012. The loss from discontinued operations in Q2 2013 represents an additional impairment charge of $14.5 million related to the anticipated sale of the Ecuador properties combined with on-going maintenance costs in Ecuador. The contribution to income in Q2 2012 reflected revenue from the Ruby Hill mine royalty in Nevada (the "Nevada Mine Royalty").
  
  
• Reported a net and comprehensive loss after tax of $10.2 million, or ($0.09) per share, compared to net and comprehensive income of $11.1 million, or $0.09 per share, for Q2 2012. The primary reasons for the decline in net and comprehensive income were the additional write-down of the carrying value of the resource properties in Ecuador and the decline in earnings from the Pallancata Mine.
  

At the Pallancata Mine:

i. The Company's 40% share of equity income from the Pallancata Mine was approximately $7.4 million compared to $13.4 million for Q2 2012. Cash distributions paid to the Company for Q2 2013 totaled $4.0 million compared to $12.0 million in Q2 2012. 

ii. Production (on a 100% basis) was approximately 1.9 million ounces of silver (Q2 2012: 2.3 million ounces) and 7,402 ounces of gold (Q2 2012: 8,304 ounces). The Company's 40% share was approximately 776,728 ounces of silver (Q2 2012: 915,572 ounces) and 2,961 ounces of gold (Q2 2012: 3,322 ounces). The primary reasons for the decrease in gold and silver production were: (i) the mine experienced an increase in mining dilution due to narrower veins being mined, and (ii) the mine encountered production scheduling constraints which restricted mine development and backfill placement. These issues are currently being addressed by the mine operator. 

iii. Direct site cash costs (as defined by the Gold Institute) were $5.18 per ounce of silver produced after gold by-product credit (Q2 2012: $2.35 per ounce). Total cash costs (also as defined by the Gold Institute) after gold by-product credit were $9.58 per ounce of silver produced (Q2 2012: $6.26 per ounce). For Q2 2013 compared to Q2 2012, total cash operating costs increased because (i) silver production declined by 15%, (ii) by-product credits declined by 9%, and (iii) mine G&A costs increased mainly because of local community land-use payments, increased personnel costs and increased maintenance costs.

Financial Performance for the Six-Month Period Ended December 31, 2012 ("H1 2013"):

The Company:

• Reported net income from continuing operations after tax of $16.2 million, or $0.14 per share, compared to net income from continuing operations after tax of $24.8 million or $0.21 per share for the six month period ended December 31, 2011 ("H1 2012"). The reduction in earnings is mainly attributable to lower earnings from the Pallancata Mine caused by higher mine administrative costs and lower gold and silver production.
  
  
• Reported cash flow from continuing operations provided by operating activities of $8.6 million compared to $27.5 million for H1 2012, with the change representing the difference in the cash distributions from the Pallancata Mine during the respective periods.
  
  
• Reported a net loss from discontinued operations after tax of $16.8 million compared to net income from discontinued operations after tax of $1.5 million for H1 2012. The loss from discontinued operations in H1 2013 mainly reflects the $14.5 million write-down recorded to the carrying value of the resource properties in Ecuador, while the contribution to income in H1 2012 was revenue from the Nevada Mine Royalty.
  
  
• Reported a net and comprehensive loss after tax of $0.6 million, or $0.00 per share, compared to net and comprehensive income of $26.3 million, or $0.21 per share, for H1 2012. The major reason for the loss in H1 2013 was the write-down of the carrying value for the discontinued operations in Ecuador.
  

At the Pallancata Mine:

i. The Company's 40% share of the equity income from the Pallancata Mine was approximately $18.0 million compared to $28.5 million for H1 2012. Cash distributions paid to the Company for H1 2013 totaled $10.0 million compared to $28.0 million in H1 2012.

ii. Production (on a 100% basis) was approximately 3.8 million ounces of silver (H1 2012: 4.6 million ounces) and 14,216 ounces of gold (H1 2012: 17,674 ounces). The Company's 40% share was approximately 1.5 million ounces of silver (H1 2012: 1.8 million ounces) and 5,686 ounces of gold (H1 2012: 7,070 ounces). The reasons for the decrease in gold and silver production are as described previously.

iii. Direct site cash costs were $4.94 per ounce of silver produced, after gold by-product credit (H1 2012: $1.68 per ounce). Total cash costs after gold by-product credit were $9.04 per ounce of silver produced (H1 2012: $5.85 ounce). The increase in costs is largely attributable to lower silver production, lower by-product credits and an increase in mine G&A costs as described previously.

Operating Statistics for the Pallancata Mine (100% Basis; 40% attributable to IMZ).

The table below reports key operating and cost statistics for the Pallancata Mine on a (100% basis) for the quarters ended December 31, 2012 and 2011, respectively and for the calendar years ended December 31, 2012 and 2011, respectively, together with the results from the quarter ended September 30, 2012.

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. Silver sales have been rounded.
3. Silver and gold ounces sold are reported as gross 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 (Also 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 gold by-product credits.
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, local and regional taxes and the government royalty. The costs per ounce are net of gold by-product credits.

Company Outlook

During the remainder of the 2013 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 produce approximately 7.4 million ounces of silver and 26,000 ounces of gold in calendar year 2013 (the Company's estimate on a 100% 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 permitting and mine development with production targeted to commence in the second half of 2014.
    
    
  • Continuing with an aggressive exploration program to expand reserves and resources.
    
    
• At the 100%-owned Gemfield heap leach project at the Goldfield property in Nevada, completing all permitting activities with a view to commencing construction in 2014 (subject to financing) and production in mid-2015.
  
  
• Completing the sale of the Company's resource properties in Ecuador.
  
  
• 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.
  

The technical disclosure in this news release has been reviewed by IMZ's Qualified Person, Nick Appleyard, VP Corporate Development.

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.

Cautionary Statement:

The Gold Institute calculation of Direct Site Costs and Total Cash Costs are non-IFRS 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. Forward-looking statements in this release include statements regarding risks related to: mine production expectations; timing of construction and production of projects; financing of capital projects; estimates of financial results; and completion of the sale of the Ecuadorian properties. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties such as: mining, production and processing risks; risks relating to obtaining construction and mining permits; risks related to financing capital projects; risks associated with estimating financial results; risks of obtaining government approvals for the Ecuadorian properties and the uncertainty in estimating and then receiving their fair market value; and other risks and uncertainties detailed in the Company's Annual Information Form for the year ended June 30, 2012, 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.   

The accompanying notes are an integral part of these consolidated financial statements and may be viewed by clicking this link.

The accompanying notes are an integral part of these consolidated financial statements and may be viewed by clicking this link.

The accompanying notes are an integral part of these consolidated financial statements and may be viewed by clicking this link.

The accompanying notes are an integral part of these consolidated financial statements and may be viewed by clicking this link.