Intrepid Mines Limited
TSX : IAU
ASX : IAU
TSX : IXN

Intrepid Mines Limited

January 31, 2007 09:28 ET

Intrepid Mines Reports Operating Activities For the Quarter Ended December 31, 2006

TORONTO, ONTARIO--(CCNMatthews - Jan. 31, 2007) - Intrepid Mines Limited (TSX:IAU)(TSX:IXN)(ASX:IAU), an international gold and silver production, development and exploration company, reports operating activities for the quarter ended December 31, 2006. All dollar figures are in United States dollars unless otherwise indicated. Intrepid today filed its Activities Report for the quarter ended December 31, 2006 which is available on the Intrepid website www.intrepidmines.com and at www.asx.com.au. A summary of that report is provided below.

OVERVIEW

- Gold production for the quarter was 14,672 ounces, down 10% from the prior quarter

- Site cash costs for the quarter were $451 per ounce, up 16% from the prior quarter

- Full calendar year 2006 production was 73,736 ounces at site cash costs of $331 per ounce

- Completed fully subscribed equity financing for proceeds net of costs of $7.7 million

- Nearing completion of the Casposo feasibility study

- Continuing progress in exploration activities

"Intrepid is focused on becoming a significant, sustainable profitable producer which requires making continued investments in both our mining operations and exploration activities for the long-term. While we are clearly disappointed in production results for the quarter, we have embarked on programs to optimize mining operations at our Paulsens mine," stated Laurence Curtis, President and Chief Executive Officer.



PRODUCTION UPDATE

3 months to 3 months to 3 months to 3 months to 3 months to
Dec September June March December
31, 2006 30, 2006 30, 2006 31, 2006 31, 2005
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Site production
cash cost $451/oz $389/oz $264/oz $270/oz $286/oz
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Total cash
cost $468/oz $406/oz $284/oz $287/oz $300/oz
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Gold
produced 14,672 oz 16,388 oz 22,148 oz 20,528 oz 19,013 oz
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In the December 31, 2006 quarter, Intrepid produced 14,672 ounces of gold at a total cash cost of $468 per ounce, compared to 19,013 ounces produced at a total cash cost of $300 per ounce for the year-earlier period. Total revenue for the quarter was $7.0 million down from revenue of $8.8 million in the year-earlier period. Cash balance at the period end was $8.5 million.

Unit operating costs for the quarter remained relatively steady at $81 per tonne of ore processed. However, a lower head grade resulted in cash operating costs on a per ounce basis increasing.

Gold production for the quarter was below forecast following poor mine to mill grade reconciliation. As the negative reconciliation trend became evident during the quarter, the Company initiated a formal review of operations to identify the cause of the grade variance. The review is ongoing with completion anticipated in the current quarter. Two key areas have emerged as priorities - improvement in the delineation of Upper Zone economic ore boundaries and the control of dilution.

It is considered likely that underground development dilution levels can be reduced by tighter monitoring of compliance to design specifications. Further improvement is potentially available through the implementation of these and other design changes currently under evaluation.

Post quarter end mine grades have lifted, but further improvement is sought and priority will be placed on implementing recommendations from the operational review during the March quarter.

Intrepid's newly adopted December 31 year end MD&A and audited financial results (for the six months ended December 31, 2006) are scheduled for release no later than March 15, 2007.

DEVELOPMENT UPDATE

- Paulsens Resource & Reserve - Work commenced in the quarter on updating the resource estimate for the Paulsens deposit. Drill hole placement and results obtained will permit recalculation of the resource and reserve estimates below the base of the current mine plan (300 metres below surface) and provide improved definition of Measured and Indicated resources eligible for conversion to reserves. Work has also commenced on updating the mine reserve estimate. The updated resource and reserve estimates are expected to be completed in February 2007.

- Casposo Feasibility - During the quarter, feasibility study consultant AMEC completed field and technical components of the study and began compilation of the initial draft of the Casposo feasibility report. Work completed included water monitoring and source wells, underground and surface mine planning, mineral resource verification and metallurgy (provided by subcontractor SGS Lakefield). Mill and processing plant design and tailings facility design were also completed. A final feasibility document is expected to be released mid March quarter.

EXPLORATION UPDATE

Argentina:

- Casposo - In October, Intrepid received final analytical results for a diamond drill campaign begun in June and ended September 2006. The program saw a total of 7,226 meters completed, including drill testing for resource quality and extension of the Casposo and Mercado deposits and testing of the Julieta and Kamila Southeast Extension (SEXT) advanced exploration targets. At Kamila, step-out holes on the Inca Vein have tested mineralized structures to the east of a north-south trending dyke which cuts the deposit. Eight holes in this campaign have intersected a strongly developed Inca Vein which extends the mineral potential of the Kamila deposit to the east and southeast. These holes have not yet been incorporated into the Kamila resource estimate.

- Cristina - The Cristina property was acquired in July 2006 and is located in the Calingasta valley approximately 25 km southeast of the Casposo property. Work began in the quarter on the property and has consisted of detailed mapping and sampling of a strong north trending fault hosted gold-lead quartz carbonate alteration system. The mineralized structure is hosted within a volcano sedimentary sequence of Cretaceous age. Mapping and sampling results should be completed in early 2007 and a decision to drill test the mineralized system will be made based on results.

Australia:

- Paulsens - The Paulsens Extension Drilling program targeting an upgrade of resources and the extension of the mine orebody begun in the previous period was completed in the quarter. 18 holes tested mineralisation in the deposit down plunge to 710mRL, 490m below surface and also tested the northern, down-dip extent of the Lower Zone mineralisation on several sections. Updated resource and reserve estimates are currently underway and should be completed in February 2007.

Central America:

- San Cristobal (El Salvador) - Work in the quarter focused on the Minitas prospect of the Guapinol concession. Work consisted of the testing of two zones on the prospect, the Minitas and Suegra. The most important result was an interval of 2.75m at 112.9m depth grading 20.58 g/t gold and 1056 g/t silver.

- Potonico (El Salvador) - We continue to work towards building community relationships as a pre-cursor to exploration in the project area.

- Taviche (Mexico) - The Company acquired the Taviche property located in Oaxaca State, Mexico in 2006 from Plata Panamericana s.a. de C.V. The Taviche Property comprises two concessions totalling 13,724 hectares. In the quarter, Intrepid entered into an agreement with Aura Silver Resources Inc. whereby the companies will jointly earn a 70% interest in the concessions. Aura Silver will undertake to fund the first year agreement commitments with Plata Panamericana. Intrepid completed a digital map and database compilation and exploration work is scheduled to begin in January 2007. Initial work will include detailed mapping and verification sampling in areas of the Taviche West concession and prospecting of new areas in both the Taviche East and West concessions.

CORPORATE

- Financing - During the quarter, the Company completed a fully subscribed equity offering for proceeds net of costs of $7.7 million. The units were priced at C$0.70 per unit. Each unit consists of one ordinary share and one half an ordinary share purchase warrant. Each full purchase warrant entitles its holder to purchase one ordinary share at a price of C$0.90 per share, exercisable until June 21, 2008.

- Westpac - Post quarter end the fifth project debt repayment of $1.7 million was made on schedule. A further $1.7 million has been set aside from the prospectus funds received in December 2006 to be applied to the Westpac April 2007 debt repayment. The Westpac project finance facility balance at December 31, 2006 prior to the fifth repayment was $14.2 million.

On behalf of the Board of Directors of Intrepid Mines,

Laurence Curtis, President & CEO

About Intrepid Mines:

Intrepid Mines Limited has an international production, development and exploration profile, and holds interests in several gold-silver and silver-base metal properties in Australia, Argentina, Central America and Canada, either directly or through joint venture partnership. The issued capital is 164,259,243 shares comprised of 136,833,089 ordinary shares of Intrepid Mines Limited quoted on the TSX:IAU and ASX:IAU and 27,426,154 Exchangeable Shares of Intrepid NuStar Exchange Corporation quoted on the TSX:IXN.

Qualified Person:

Information in this announcement is based on information compiled by William McGuinty, P. Geo., V.P. Exploration, who is a competent person as defined in the 2004 Edition of the JORC 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' and is a Qualified Person as defined in the Canadian National Instrument 43-101 (standards of Disclosure for Mineral Projects). Mr. McGuinty is a full time employee of Intrepid Mines Limited and has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity which is being undertaken, and consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This release contains certain forward-looking statements that may involve a number of risks and uncertainties. Actual events or results could differ materially from the Company's expectations and projections. Except for statements of historical fact relating to the Corporation, certain information contained herein constitutes "forward-looking statements". Forward-looking statements are frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drilling results and other ecological data, fluctuating metal prices, the possibility of project cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future and other factors. Circumstances or management's estimates or opinions could change. The reader is cautioned not to place undue reliance on forward-looking statements.

The TSX & ASX has neither approved nor disapproved the information contained in this press release.

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