SOURCE: International Minerals Corporation

January 16, 2008 08:30 ET

International Minerals Announces Major Production Expansion at Pallancata Mine, Peru and First Sales of Silver-Gold Concentrate

SCOTTSDALE, AZ--(Marketwire - January 16, 2008) - International Minerals Corp. ("IMZ") (TSX: IMZ) (SWISS: IMZ) (FRANKFURT: MIW) is pleased to report that it has been informed by the operator of the joint venture, Hochschild Mining plc ("Hochschild"), that mine production at the Pallancata silver-gold mine in Peru (owned 40% by IMZ and 60% by Hochschild) is planned to ramp-up from the September 2007 start-up level of 500 tonnes per day ("tpd") to 2,250 tpd by the end of calendar year 2008.

The 2,250 tpd production level represents an increase of 350% within one year of start-up of the mine (well in excess of Hochschild's original contractual obligations for mine expansion) as a result of the mine performing above expectations in terms of silver grades, vein widths and potential for future resource/reserve expansion. Under the terms of the June 2006 agreement, Hochschild was only obligated to increase production from 500 tpd to 750 tpd by September 2008 (and is currently producing at that level), with a further increase to 1,000 tpd by September 2009. Any production expansion over 1,000 tpd is to be paid 60% by Hochschild and 40% by IMZ. Final cost estimates are not yet available but it is anticipated that IMZ's share of the cost of such an expansion will be funded by its share of cash flow from Pallancata.

Part of Hochschild's 2008 corporate business plan includes an expansion of their nearby Selene processing plant (where the Pallancata ore is toll-treated to produce a saleable silver-gold concentrate) from its current level of 2,000 tpd to 3,000 tpd by Q4 2008, with the majority of the expanded plant capacity to be devoted to processing Pallancata's ore.

Hochschild's plans for this significant ramp-up in production at Pallancata during 2008 is expected to result in the mine producing in excess of 4 million annualized ounces of silver equivalent by the end of 2008, with 40% (over 1.6 million ounces) attributable to IMZ.

Calendar Year 2007 Production Figures for Pallancata Mine

Please see the Pallancata production and sales data in the Table below, which was extracted from Hochschild's news release dated January 8, 2008.

According to Hochschild's news release, the 4-month total production at the Pallancata mine (from start-up in September 2007) was 704,000 ounces of silver and 2,760 ounces of gold, of which IMZ's share is 281,600 ounces of silver and 1,104 ounces of gold (347,840 silver equivalent ounces based on using a silver-gold ratio of 60:1).

The Pallancata mine's first shipment of silver-gold flotation concentrate to a smelter in December 2007 contained approximately 561,000 ounces of silver and 2,080 ounces of gold with IMZ's 40% share being 224,400 ounces of silver and 832 ounces of gold (274,320 silver equivalent ounces based on a silver-gold ratio of 60:1). Final settlement with the smelter for this initial batch of 500 tonnes of concentrate is expected in Q1 2008 and additional concentrate shipments are planned in early Q1 2008.

Commenting on the news of Hochschild's production expansion plans and the initial sale of production from the Pallancata mine, Stephen J. Kay, President and CEO of IMZ, said, "We are pleased to announce the first precious metal sales for the Pallancata mine, but even more excited by the news that Hochschild will significantly expand production (over and above the contractual requirements) on a highly accelerated basis in 2008. Hochschild has done an excellent job at Pallancata, bringing the mine into production in record time. We look forward to a long and a profitable relationship with them at Pallancata and are confident that the ultimate size potential of the Pallancata deposit is yet to be defined."

IMZ and Hochschild anticipate updating the mineral resource and reserve estimates for Pallancata at the end of Q1 2008.

Pallancata Mine Highlights -                  --------- --------- ---------
 September-December 2007                                            Total
(40% IMZ, 60% Hochschild)                      Q4 2007   Q3 2007     2007
                                              --------- --------- ---------
100% mine production *

                                              --------- --------- ---------
  Ore production (tonnes, in thousands)          63,612    14,723    78,335
                                              --------- --------- ---------
  Average head grade silver (g/t)                 322.6     255.5       310
                                              --------- --------- ---------
  Average head grade gold (g/t)                     1.5       1.3       1.5
                                              --------- --------- ---------
  Concentrate produced (tonnes, in thousands)       560        79       638
                                              --------- --------- ---------
  Silver grade in concentrate (kg/t)              33.25     41.60     34.28
                                              --------- --------- ---------
  Gold grade in concentrate (kg/t)                 0.13      0.17      0.13
                                              --------- --------- ---------
  Silver produced (oz)                          599,000   105,000   704,000
                                              --------- --------- ---------
  Gold produced (oz)                              2,330       430     2,760
                                              --------- --------- ---------
  Silver sold (oz)                              561,000         0   561,000
                                              --------- --------- ---------
  Gold sold (oz)                                  2,080         0     2,080
                                              --------- --------- ---------

                                              --------- --------- ---------
IMZ's 40% share of production **

                                              --------- --------- ---------
  Silver produced (oz)                          239,600    42,000   281,600
                                              --------- --------- ---------
  Gold produced (oz)                                932       172     1,104
                                              --------- --------- ---------
  Silver equivalent oz produced
   (silver:gold ratio = 60:1)                   295,520    52,320   347,840
                                              --------- --------- ---------
  Silver sold (oz)                              224,400         0   224,400
                                              --------- --------- ---------
  Gold sold (oz)                                    832         0       832
                                              --------- --------- ---------

                                              --------- --------- ---------
  Silver equivalent oz sold
   (silver:gold ratio = 60:1)                   274,320         0   274,320
                                              --------- --------- ---------

*Extracted from Hochschild News Release dated January 8, 2008
**Calculated by IMZ from Hochschild data
Note:
   1.   "oz" = troy ounces
   2.   "g/t" = grams per tonne
   3.   "kg/t" = kilograms per tonne

The technical information reported in this news release was supervised and reviewed by IMC's Qualified Person, Technical Manager, Nick Appleyard.

Neither Hochschild Mining plc nor any of its subsidiaries 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 Toronto, Swiss and Frankfurt Stock Exchanges neither approve nor disapprove the information contained in this News Release. 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 expansion, reserve and resource additions, and timing and significance of future cash flows and revenue from operations. 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 and reserves; risks relating to capital and production costs; risks relating to obtaining mining and environmental permits; mining and development risks; risk of commodity price fluctuations; political and regulatory risks; 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.

Contact Information