SOURCE: International Minerals Corporation

International Minerals Corporation

June 30, 2011 18:00 ET

International Minerals Announces Expiry of Agreements With Chinese Company for Financing and Construction of Rio Blanco and Gaby Gold Projects in Ecuador

SCOTTSDALE, AZ--(Marketwire - Jun 30, 2011) - International Minerals Corporation (TSX: IMZ) (SWISS: IMZ) reports that the previously announced (see press release dated November 15, 2010) Memoranda of Understanding ("MOU") between IMZ and China CAMC Engineering Co., Ltd ("China Co.") for the financing and construction of IMZ's Rio Blanco and Gaby gold projects (the "Projects") in Ecuador have expired without the signing of definitive agreements.

Based on the terms of the MOUs for the projects, China Co. was to be responsible for:

  • Arranging the required production financing for the Projects through one or more Chinese financial institutions; and
  • Constructing and delivering turnkey mining operations for the Projects, based on industry-standard Engineering, Procurement and Construction ("EPC") contracts.

With increasingly restrictive financing conditions in China, China Co. was not successful in arranging the project-recourse debt financing for the Rio Blanco project, as required under the terms of the MOU and even though alternative financing scenarios were discussed with China Co., an acceptable financing alternative could not be arranged.

The project-recourse financing was, for IMZ, a fundamental component of the agreement with China Co. Without such financing, there is no business advantage for IMZ to pursue a stand-alone EPC contract with China Co. for the Rio Blanco project.

Financing and an EPC contract with China Co. for the Gaby project was to be contingent on the successful completion of a feasibility study at Gaby, which has not yet been completed.

IMZ is currently in discussions with a Canadian company regarding a potential transaction for the sale of the Rio Blanco and Gaby projects, although there are no assurances that any agreement can be reached. IMZ continues to negotiate with the Ecuadorian government for a production contract at Rio Blanco and hopes to conclude the contract in the near future.

About International Minerals

International Minerals is a silver-gold producer, explorer and developer with silver-gold production from its 40%-owned Pallancata Mine in Peru, the fifth largest primary silver mine in the world. Production at Pallancata in calendar year 2010 was approximately 10.1 million ounces of silver and 36,000 ounces of gold (on a 100% project basis).

In addition to the Pallancata Mine, IMZ also owns a 40% interest in the Inmaculada gold-silver project in Peru and 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% net smelter return royalty from Barrick Gold's Ruby Hill gold mine in Nevada, which produced approximately 80,000 gold ounces in 2010.

IMZ is listed on the Toronto Stock Exchange (since 1994) and the Swiss Stock Exchange (since 2002).

To acess this news release from IMZ's website, please click this link:
http://www.intlminerals.com/newsreleases.php.

Cautionary Statement:

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 planned feasibility studies and production contract negotiations. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties such as:, risks of timely completion of feasibility and other technical studies, risks and uncertainties of government negotiations on mining projects and other risks and uncertainties detailed in the Company's Renewal Annual Information Form for the year ended June 30, 2010, 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

  • For additional information, contact:

    In North America
    Paul Durham
    Vice President Corporate Affairs Relations
    Tel: +1 203 940 2538

    In Europe
    Oliver Holzer
    Marketing Consultant
    Tel: +41 44 853 00 47

    Or email us at: Email Contact
    Internet Site: http://www.intlminerals.com