International Minerals Corporation
Swiss : IMZ

International Minerals Corporation

September 18, 2007 08:30 ET

International Minerals Announces Commencement of Production at Pallancata Silver Mine in Peru

SCOTTSDALE, ARIZONA--(Marketwire - Sept. 18, 2007) - International Minerals Corporation ("IMC") (TSX:IMZ)(SWX:IMZ)(FRANKFURT:MIW) is pleased to announce that underground production at an initial rate of 500 tonnes per day ("tpd") has commenced at the Pallancata underground silver mine in southern Peru. The Pallancata Mine is jointly-owned by IMC (40%) and London-listed Hochschild Mining plc ("Hochschild", 60%), with Hochschild's wholly-owned subsidiary, Compania Minera Ares S.A.C. ("Ares"), as the mine operator.

Pallancata ore will be toll-processed to produce a saleable flotation concentrate at Hochschild's Selene process plant, located 22 kilometers (by a newly-constructed gravel road) north of the Pallancata mine. IMC expects to receive its initial 40% share of cash flow from the mine in the fourth quarter of 2007 or early in the first quarter of 2008 with the sale of the first silver-gold concentrate from the mine. Hochschild has funded 100% of the start-up capital costs for the mine and none of those costs are recoverable from IMC's share of cash flow.

Stephen Kay, President and CEO of IMC, stated, "The commencement of mining at Pallancata is a milestone event for IMC as it now moves IMC from an explorer to a producer. Hochschild are to be congratulated for having met their goal of taking Pallancata from an exploration project to a producing mine in just over one year from the signing of our joint venture agreement in June 2006."

Hochschild is committed to increase the mining rate at Pallancata from 500 tpd to 750 tpd within one year of the commencement of production and, if necessary, to expand its Selene plant (at Hochschild's cost) to accommodate processing of the increased tonnage from Pallancata. A further expansion of mine production to 1,000 tpd is subject to approval by both parties but all new capital expenditures required to expand the mine to 1,000 tpd will be funded solely by Hochschild. Any mine expansion in excess of 1,000 tpd will be funded 60% by Hochschild and 40% by IMC. All exploration and development costs outside of the immediate mine area (the "Main Pallancata Vein") are funded 40% by IMC and 60% by Hochschild, as are replacement capital costs for the mine.

IMC announced (in a news release dated August 30, 2007) the results of an independent prefeasibility study for the Main Pallancata Vein reporting a Probable Reserve estimate of 1.1 million tonnes at an average grade of 311 g/t silver and 1.2 g/t gold (containing 11.5 million ounces of silver and 45,000 ounces of gold), with an additional 1.5 million tonnes at an average grade of 412 g/t silver and 1.2 g/t gold (containing 20.4 million ounces of silver and 59,000 ounces of gold) in the Indicated Resource estimate category. The additional Inferred Resource estimate for the project is 2.6 million tonnes at an average grade of 359 g/t silver and 1.5 g/t gold (containing 29.5 million ounces of silver and 119,000 ounces of gold).

Ares, as mine operator, is continually optimizing the existing Pallancata mine plan and schedule, together with undertaking additional drilling and underground development in order to convert material currently in the Indicated and Inferred Resource categories (which do not have demonstrated economic viability at this time) into reserves.

Based on the current reserves in the prefeasibility study, Pallancata has an estimated initial 5-year mine life and would produce an average of approximately 2 million ounces of silver per year plus 7,600 ounces of gold. IMC's share of production is 40% of these estimates. IMC is currently completing a NI 43-101 technical report based on the prefeasibility study, which will be filed on SEDAR by mid-October 2007.

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

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.


Stephen J. Kay, President and CEO

The Toronto, Swiss and Frankfurt Stock Exchanges neither approve nor disapprove the information contained in this News Release.

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