Idaho General Mines, Inc.
OTC Bulletin Board : IGMI

October 26, 2005 10:00 ET

Idaho General Announces Exercising Mount Hope Molybdenum Property Option to Lease

SPOKANE, Wash.--(CCNMatthews - Oct 26, 2005) -

Idaho General Mines (OTCBB:IGMI) ("Idaho General," "IGMI" or the "Company") today announced that effective October 19, 2005, it has exercised its option to lease the Mount Hope Molybdenum Project in central Nevada. On November 12, 2004, IGMI entered into an Option to Lease all property and assets of the Mount Hope Molybdenum Property from Mt. Hope Mines, Inc. Exercise of the Option allows IGMI to proceed for the next 30 years with permitting, developing and mining the deposit and for so long thereafter as IGMI maintains an active operation. Pursuant to the terms of the lease, the underlying total royalty on production, less certain deductions, is 4 percent for a molybdenum price up to $12 per pound, 5 percent for a molybdenum price up to $15 per pound, and 6 percent for a molybdenum price above $15 per pound. IGMI is subject to certain periodic payments totaling $1,550,000 to be paid as per a schedule between October 2005 and October 2010. IGMI has a best efforts obligation, by the third anniversary of the lease, to pay Mt. Hope Mines, Inc. a recoverable periodic payment (advance royalty) of 3 percent of the estimated capital cost of the project. This obligation to pay 3 percent of the construction capital is subject to certain extension provisions through October 2013. Minimum royalty payment after the mine is in production is $.27/lb of molybdenum if producing and $500,000 per year if the plant is idled.

Economic highlights of IGMI's Plan of Operations for Mount Hope, using a 53-year life-of-mine molybdenum price forecast of $7 per pound are as follows:

-- The payback period (an index of risk which is the time required to take all after tax profits and payback of the estimated $416 million preproduction capital costs to reach the production rate of 40,000 metric tonnes per day) is approximately 4 years.

-- 35 million pounds of average annual molybdenum production over the first 5 years of operation from mineralized material averaging 0.118-percent molybdenum at cash costs less than $3.15/lb.

-- 31 million pounds of average annual molybdenum production over the first 11 years of operation from mineralized material averaging 0.106-percent molybdenum at cash costs less than $3.40/lb.

-- Beginning in Year 12, an expanded throughput capacity from 40,000 to 50,000 metric tonnes per day requiring modest capital investment for an additional ball mill and associated floatation cells.

-- Approximately 1.3 billion pounds of total molybdenum production over a 53-year mine life.

-- A roasting facility sized to accommodate a nominal minimum capacity of 38.5 million pounds of molybdenum per year, leaving an average of 14.5 million pounds of annual toll roasting capacity.

Idaho General Mines, Inc. is a US mineral exploration company specializing in advanced-stage projects. Idaho General holds the Mount Hope Project in central Nevada which contains one of the largest molybdenum-porphyry deposits in the world. Based upon a recently completed feasibility study by independent contractors and a mine plan and mineralization study, IGMI plans to mine 920 million metric tonnes of mineralized material by open pit methods that will produce about 1.3 billion pounds of recoverable molybdenum during its 53-year lifetime. While the cornerstone of the company is the Mount Hope project, the Idaho General portfolio contains additional advanced-stage, high-potential molybdenum, copper, and gold projects in the western United States. Idaho General is led by a highly-qualified technical and financial management team. Its stock trades on the OTC Bulletin Board under the symbol "IGMI," and its website is www.idahogeneralmines.com.

Statements made which are not historical facts, such as anticipated payments, production, exploration results and plans, costs, prices or sales performance are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and involve a number of risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, expected or implied. These risks and uncertainties include, but are not limited to, metals price volatility, volatility of metals production, exploration risks and results, political risks, project development risks and ability to raise financing. Refer to the company's Form 8-K, 10-QSB and 10-KSB reports for a more detailed discussion of factors that may impact expected future results. The company undertakes no obligation and has no intention of updating forward-looking statements. Cautionary Note to Investors -- The United States Securities and Exchange Commission permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms and statements in this news release that the SEC guidelines strictly prohibit us from including in our filing with the SEC. U.S. investors are urged to consider closely the disclosure in our filings with the SEC. You can review and obtain copies of these filings from the SEC's website at http://www.sec.gov/edgar.shtml.

Contact Information

  • Idaho General Mines, Inc.
    Robert L. Dumont, 509-838-1213