Significant Cost Reductions Planned

SCOTTSDALE, AZ--(Marketwired - May 15, 2013) -  International Minerals Corporation (TSX: IMZ) (SWISS: IMZ) (the "Company") reports operating highlights and financial results for the third fiscal quarter ended March 31, 2013 ("Q3 2013") together with details of the Company's planned cost-cutting measures to significantly reduce expenditures.

Currency amounts are in US Dollars and all income-related amounts are after-tax, unless otherwise stated.

Summary of Financial Results for Q3 2013:

• The Company reported $2.2 million in income from continuing operations ($0.02 per share) due primarily to income of $4.2 million from IMZ's 40% ownership in the Pallancata silver mine in Peru.
  
  Since Pallancata began commercial operations in 2007, it has reported both positive cash flow and earnings in every quarter of every year of production, which is a significant achievement for any mining operation.
  
  
• The Company reported a net and comprehensive loss of $4.7 million (a loss of $0.04 per share) due primarily to a $7.0 million loss from discontinued operations related to additional write-downs associated with the sale of the Ecuadorian properties.
  
  
• Subsequent to the end of Q3 2013, IMZ received a $5.9 million cash distribution from Pallancata bringing the Company's 40%-share of cumulative free cash flow from Pallancata to approximately $125.6 million since August 2009 on a pre-production investment by IMZ of only $5 million.
  
  
• Minera Suyamarca (owned 40% by IMZ and 60% by Hochschild Mining) closed a $140 million debt facility with two Peruvian banks at a low interest rate to partially fund the construction and development costs for the Inmaculada gold-silver project. This loan is non-recourse to IMZ and Hochschild. See news release dated March 25, 2013 for further details.
  
  
• IMZ paid a cash dividend of C$0.12 per common share (a total of $14.3 million). This was the first-ever dividend payment made by the Company. 
  
  
• IMZ remains in a strong financial position with over $53 million in cash and equivalents and approximately $77 million in working capital at March 31, 2013.
  
  

2013 Cost Reduction Program:

In response to recent developments in the commodity and mining equity markets, the Company is responding aggressively and implementing immediate company-wide cost reductions in discretionary spending for calendar year 2013. Many of the cuts will also carry over into calendar-year 2014 and beyond as the Company recognizes the need to be continually assessing its technical and administrative cost structure in the future in order to optimize profitability and increase shareholder value.

At the Company's resource properties (excluding Pallancata and Inmaculada, which are discussed separately below), IMZ expects to reduce remaining 2013 cash outflows by $8.5 to $9.0 million (a 35% to 37% decrease) from budgeted amounts of $24.2 million to $15.2 to $15.7 million.

The $8.5 to $9.0 million in reduced expenditures consists of:

(i) Nevada (Gemfield development and exploration): reduction of $6.5 to $6.8 million (39% to 41%).

(ii) Peru (exploration): reduction of $1.5 to $1.7 million (47% to 53%).

(iii) Corporate and Investor Relations: reduction of $0.48 to $0.5 million (11% to 12%).

With respect to 2013 expenditure reductions at the Pallancata and Inmaculada, Hochschild is in the process of implementing an action plan to conserve capital, mitigate operating cost increases, and review all discretionary expenditures.

IMZ anticipates a reduction in total combined project expenditures at Pallancata and Inmaculada for 2013 of approximately $14 million (40% attributable to IMZ), which consists of:

(i) Pallancata: approximately $10.5 million from mining operations (a 7% reduction) and $1.2 million in exploration drilling (a 20% reduction).

(ii) Inmaculada: approximately $2.3 million in reduced exploration drilling (a 70% reduction).

IMZ expects that the cost reductions at Pallancata will have minimal impact on the annual production target for 2013 of 7.4 million ounces of silver and 26,000 ounces of gold (40% attributable to IMZ). IMZ's 40% share of capital spending for calendar 2013 at Inmaculada ($9.8 million) remains unchanged at this time.

Financial Performance for the Three-Month Period Ended March 31, 2013 (Q3 2013):

The Company reported:

• net income from continuing operations of $2.2 million ($0.02 per share) compared to $5.5 million ($0.04 per share) for the fiscal quarter ended March 31, 2012 ("Q3 2012"). The decline in income period-over-period reflects lower earnings from the Pallancata Mine which was caused mainly by lower silver production (due to lower grades) and lower gold and silver prices.
  
  
• a net loss from discontinued operations of $7.0 million compared to net income of $0.7 million for Q3 2012. The loss in Q3 2013 represents an additional impairment charge of $5.8 million related to the anticipated sale of the Ecuador properties combined with on-going maintenance costs in Ecuador of approximately $1.1 million. The contribution to income in Q3 2012 reflected income from the Ruby Hill mine royalty in Nevada (sold in May 2012).
  
  
• a Q3 2013 net and comprehensive loss of $4.7 million (a loss of $0.04 per share) compared to net and comprehensive income $6.2 million ($0.05 per share) for Q3 2012, with the reduction in income primarily due to the additional write-down of the carrying value of the Ecuadorian mineral properties and the decline in earnings from the Pallancata Mine as explained above.
  
  
• cash flow used in continuing operations for Q3 2013 of $1.1 million compared to $6.9 million in Q3 2012 for the same reasons discussed above.
  
  

At the Pallancata Mine:

(i) The Company's 40% share of income was approximately $4.2 million compared to $11.2 million for Q3 2012, with the decline primarily caused by lower silver production and lower gold and silver prices, together with a modest 2% increase in overall production costs.

(ii) Production (on a 100% basis) was approximately 1.6 million ounces of silver (Q3 2012: 1.8 million ounces) and 6,525 ounces of gold (Q3 2012: 5,612 ounces).

The Company's 40% share was approximately 643,218 ounces of silver (Q3 2012: 712,049 ounces) and 2,610 ounces of gold (Q3 2012: 2,245 ounces).

The primary reason for the reduction in silver production was a decrease in the grade of ore processed.

(iii) Direct site cash costs (as defined by the Gold Institute) were $5.87 per ounce of silver produced after gold by-product credit (similar to Q3 2012 at $5.34 per ounce).

Total cash costs after gold by-product credit (also as defined by the Gold Institute) were $10.15 per ounce of silver produced (similar to Q3 2012 at $9.48 per ounce).

The increase in costs (both direct and total) is largely attributable to lower silver production.

Financial Performance for the Nine-Month Period Ended March 31, 2013 (YTD 2013):

The Company reported:

• net income from continuing operations of $18.4 million ($0.16 per share) for YTD 2013 compared to $30.4 million ($0.25 per share) for the nine-month period ended March 31, 2012 ("YTD 2012"). The reduction in income is mainly attributable to lower earnings from the Pallancata Mine caused primarily by lower silver and gold production (due to lower grades) and lower gold and silver prices.
   
• a net loss from discontinued operations of $23.7 million compared to net income of $2.2 million for YTD 2012, the year-over-year increase in loss reflecting primarily the write-down of the carrying value of the Ecuadorian resource properties, while the contribution to income in YTD 2012 reflected revenue from the Ruby Hill mine royalty of $2.2 million. 
  
  
• a net and comprehensive loss of $5.3 million (a loss of $0.04 per share) compared to net and comprehensive income of $32.5 million ($0.27 per share) for YTD 2012, due mainly to the large write-down ($23.7 million) for YTD 2013 of the carrying value for the discontinued operations in Ecuador.
  
  
• cash flow from continuing operations of $7.5 million compared to $20.7 million for YTD 2012, with the change representing the difference in the cash distributions from the Pallancata Mine during the respective periods.
  
  

At the Pallancata Mine:

(i) The Company's 40% share of income was approximately $22.2 million compared to $39.7 million for YTD 2012 with the year-over-year decline caused primarily by lower gold and silver production and lower gold and silver prices.

Cash distributions paid to the Company for YTD 2013 totaled $10.0 million compared to $28.0 million in YTD 2012. An additional cash distribution of $5.9 million was received in April 2013.

(ii) Production (on a 100% basis) was approximately 5.4 million ounces of silver (YTD 2012: 6.4 million ounces) and 20,741 ounces of gold (YTD 2012: 23,286 ounces).

The Company's 40% share was approximately 2.2 million ounces of silver (YTD 2012: 2.5 million ounces) and 8,296 ounces of gold (YTD 2012: 9,314 ounces).

The primary reason for the decrease in gold and silver production period-over-period was a function of a decrease in the grade of ore processed.

(iii) Direct site cash costs were $5.21 per ounce of silver produced after gold by-product credit (YTD 2012: $2.71 per ounce).

Total cash costs after gold by-product credit were $9.37 per ounce of silver produced (YTD 2012: $6.87 ounce).

The increase in costs (both direct and total) is largely attributable to lower silver production, lower by-product credits and an increase in mine G&A costs. However, on a positive note, in YTD 2013 compared to YTD 2012, spending in all cost centers decreased with the exception of mine G&A.

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 March 31, 2013 and 2012 and for the calendar years ended December 31, 2012 and 2011, together with the comparative results for the quarter ended December 31, 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 (using the Gold Institute definition) 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 comprise mine operating costs, mined ore inventory adjustment, toll processing costs and mine general and administrative (G&A) costs. The costs per ounce are net of gold by-product credits.
6. Total cash costs (using the Gold Institute definition) comprise: direct site costs (as defined in note 5), 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 will focus on:

• At the 40%-owned Pallancata Silver Mine, working with Hochschild to (a) produce approximately 7.4 million ounces of silver and 26,000 ounces of gold in calendar 2013 (the Company's estimate on a 100% project basis), (b) increase mineral resources and reserves to extend the existing mine life (approximately 3.5 years based on current reserves) and (c) increase profitability by reducing both operating and capital expenditures.
  
  
• At the 40%-owned Inmaculada gold-silver project, also partnered with Hochschild, advancing the project to production in the second half of 2014, subject to financing of IMZ's share of the remaining capital expenditure (approximately $50 million) and the timely receipt of all required permits.
  
  
• Continually evaluating all facets of the Company's capital, technical and administrative expenditures to reduce costs in response to the current depressed market conditions in the mining sector and precious metal markets.
  
  
• At the 100%-owned Goldfield gold property in Nevada, completing the permitting and commencing construction (subject to financing) at the Gemfield project, with a goal of commencing production in the second half of 2015.
  
  
• Completing the sale of the Company's properties in Ecuador.
  
  
• Continuing to seek strategic acquisitions in precious metals properties and/or companies in low political risk countries in the Americas.
  
  

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.

The complete consolidated financial statements and MD&A can be found on the Company's website at: http://www.intlminerals.com/investors/financial-reports.

Cautionary Statement:

The Gold Institute definitions 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 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 sale of 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 can be found on the Company's website at: http://www.intlminerals.com/investors/financial-reports.

The accompanying notes are an integral part of these consolidated financial statements and can be found on the Company's website at: http://www.intlminerals.com/investors/financial-reports.

Supplemental disclosure with respect to cash flows

The accompanying notes are an integral part of these consolidated financial statements and can be found on the Company's website at: http://www.intlminerals.com/investors/financial-reports.