IMZ Reports US$3.3 Million Net Income for Third Fiscal Quarter. Cash Dividend of US$10.0 Million Received from
Pallancata Silver Mine
Scottsdale, Arizona, May 17, 2010 � International Minerals Corporation (Toronto and Swiss stock exchanges: �IMZ�, or the �Company�) reports results for the fiscal third quarter ending March 31, 2010 (the �current quarter�) of $3.3 million in consolidated net income ($0.03/share), including net equity income of $6.4 million from its 40%-owned Pallancata silver mine (60% Hochschild Mining plc).
The Company also received a cash dividend distribution of $10.0 million in February 2010 from its 40% ownership interest in the Pallancata Mine.
All amounts in this news release are reported in US dollars.
Highlights of the Current Quarter:
During the 3-month period from January 1, 2010 through March 31, 2010, the Company accomplished the following significant results:
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Completed the current quarter with approximately $31.0 million in cash, aggregate working capital of approximately $26.9 million and total assets of approximately $277.6 million. Total assets increased during the current quarter by $109.7 million with the completion of the acquisitions of Metallic Ventures Gold, Inc. (�Metallic�) and Ventura Gold Corp (�Ventura�).
- Received a cash dividend distribution of $10.0 million in February 2010 from its 40% ownership interest, increasing the total cash dividend distributions received by IMZ since August 2009 to $17.7 million.
- Generated net equity income of approximately $6.4 million from its 40%-ownership interest.
- Produced approximately 2.3 million ounces of silver and 8,219 ounces of gold on a 100% project basis. The Company�s 40% interest was approximately 930,000 ounces of silver and 3,288 ounces of gold.
- Realized direct onsite costs of $3.09 per ounce (�/oz�) silver and total cash costs (as defined by the Gold Institute) of $5.83/oz silver (both after gold by-product credits).
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Ventura Acquisition: On January 12, 2010, the Company completed the acquisition of all of the issued and outstanding shares of Ventura by way of a statutory plan of arrangement. Consideration paid to Ventura shareholders comprised approximately 13.7 million shares of the Company valued at $57.7 million.
Through the acquisition, the Company added to its existing assets Ventura�s 51% joint venture interest in the Inmaculada gold-silver project in Peru (49% Hochschild), which can be increased to a 70% interest by completing a feasibility study by September 2013, and issuing 200,000 common shares of the Company over a five year period commencing in 2011.
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Metallic Acquisition: On February 26, 2010, IMZ completed the acquisition of all of the issued and outstanding shares of Metallic by way of a statutory plan of arrangement. Consideration paid to Metallic shareholders consisted of $24 million in cash and 8.5 million common shares of IMZ valued at $35.1 million.
Through the acquisition, IMZ added to its existing assets: (a) a 3% net smelter return (�NSR�) royalty (approximately $2.5-3.0 million per year based on current metals prices) from Barrick�s Ruby Hill gold mine in Nevada; (b) a 100% interest in the Converse gold exploration project, which is located in the Battle Mountain/Cortez mineralized trend of Nevada; and (c) a 100% interest in the Goldfield gold development project in central Nevada, near the historic gold mining town of Goldfield.
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Inmaculada Property: On February 3, 2010, IMZ reported an updated mineral resource estimate for the 51%-owned (Hochschild Mining 49%) Inmaculada gold-silver project comprising the following estimated mineral resources (on a 100% project basis) for the Angela Vein deposit:
- Indicated Resource: 154,000 ozs gold and 4.9 million ozs silver (contained within 1.2 million tonnes (�mt�) at an average grade of 3.9 grams per tonne (�g/t�) gold and 122 g/t silver).
- Inferred Resource: : 512,000 ozs gold and 22.1 million ozs silver (contained within 4.7 mt at an average grade of 3.4 g/t gold and 147 g/t silver).
This new resource estimate, which includes indicated resources for the first time, represents a significant increase in both the confidence level of the resource estimate and the overall gold and silver content of the Angela Vein deposit from the previously-reported inferred mineral resource estimate.
Subsequent to the end of the quarter, the Company announced in a news release dated May 4, 2010 additional new drilling results at the Angela Vein, which included several high-grade intercepts (estimated true widths), including 3.5 meters (�m�) at an average grade of 35.1 g/t gold and 1,364 g/t silver and 3.1m at an average grade of 27.0 g/t gold and 490 g/t silver.
The new drill results have extended the Angela Vein mineralization strike length to more than 1,900m, with a vertical extent of mineralization of up to 300m. Mineralization remains open along strike to the northeast. An updated mineral resource estimate will be completed in June 2010.
Additional Financial Information for the Current Quarter:
The consolidated net income for current quarter was $3.3 million ($0.03 basic and diluted per share) compared to a net income of $2.0 million ($0.02 basic and diluted per share) for the equivalent period in 2009. The increase in income between the comparative periods resulted primarily from a combination of net equity income received from the Pallancata Mine of $6.4 million (compared to $3.3 million in 2009) partially offset by the impact of a non-cash foreign exchange loss related to the weakening of the US dollar relative to the Canadian dollar of $1.4 million.
The Company realized gross equity income from the Pallancata Mine for the current quarter of $6.7 million (2009 � $3.4 million). Equity income from Pallancata increased in the current quarter because the mine was operating at higher production rates than in the comparative period of 2009. Net equity income for the current quarter of $6.4 million (2009 - $3.3 million) includes deductions for amortization costs of $249,268 (2009 - $Nil) and non-reimbursable joint venture monitoring costs of $35,692 (2009 - $Nil).
Other income was composed of royalty income from the Ruby Hill mine in Nevada of $420,829 and interest earned on cash and equivalents of $51,392 (2009 - $110,497).
Capitalized resource property expenditures for the current quarter were $112,180,525 (net of write-offs) compared to $2,289,720 for the same period last year, reflecting primarily the acquisitions of Ventura and Metallic during the quarter.
The Company reports its interest in the Pallancata Mine on an equity accounting basis.
Company Outlook
During the balance of calendar year 2010, the Company's exploration and development efforts are expected to focus primarily on:
Continuing production at the 3,000 tpd mining rate, working with our 60% joint venture partner, Hochschild.
Producing approximately 10 million ounces of silver and 33,000 ounces of gold in calendar 2010 (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).
With the passing of the mining regulations by the Ecuadorian government in November 2009, and subject to clarification of certain provisions of the new Mining Law and regulations, the Company intends to commence obtaining environmental and production permits and consider construction financing and other activities required to advance the projects towards commercial production either on a stand-alone basis or with strategic partners.
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Continuing to seek additional strategic joint venture alliances, such as that with Hochschild at Pallancata and Inmaculada, in order to advance projects with reduced further cash outlays by the Company.
About International Minerals
International Minerals is a silver-gold producer, explorer and developer with silver-gold production from its 40%-owned Pallancata Mine, 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 2010.
In addition to the Pallancata Mine and the Inmaculada Project, IMZ also holds majority or 100% ownership interests in development stage gold projects in Nevada (Goldfield and Converse) and Ecuador (Rio Blanco and Gaby). IMZ also receives a 3% NSR royalty from Barrick Gold�s Ruby Hill gold mine in Nevada, which produced 104,000 ounces of gold in 2009.
IMZ is listed on the Toronto Stock Exchange (since 1994) and the Swiss Stock Exchange (since 2002).
Hochschild Mining plc does not accept any responsibility for the adequacy or inadequacy of the disclosuremade in this news release and any such responsibility is hereby disclaimed in all respects.
For additional information, contact:
In North America:
Paul Durham, Vice President Corporate Relations
Tel: +1 (203) 940-2538
In Europe:
Oliver Holzer, Marketing Consultant
+41 (0) 44 853 0047
Or email the Company at IR@intlminerals.com
Internet Site: http://www.intlminerals.com
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 expected production figures, drilling and development and feasibility programs on the Company�s projects, timing of commencement of 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: operational risks, risks relating to obtaining mining and environmental permits; 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 Amended Annual Information Form for the year ended June 30, 2009, 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. |