SOURCE: International Minerals Corporation

May 20, 2008 08:30 ET

International Minerals Realizes $4.12 Million ($0.04 per Share) in Net Income for Third Quarter

SCOTTSDALE, AZ--(Marketwire - May 20, 2008) - International Minerals Corporation (TSX: IMZ) (SWX: IMZ) (FRANKFURT: MIW) ("IMZ" or "the Company") reported $4.12 million in net income, including $3.66 million in equity earnings from its 40%-owned Pallancata silver-gold mine in Peru for the fiscal third quarter ending March 31, 2008. IMZ's joint venture partner at Pallancata, Hochschild Mining PLC ("Hochschild"), is the mine operator and holds a 60% interest in the project.

For the nine month period ended March 31, 2008, IMZ reported a loss of $0.77 million, partially offset by an equity earnings of $2.87 million from its 40% interest in the Pallancata Mine.

The Pallancata joint venture company, Minera Suyamarca S.A.C., has not yet distributed any cash dividends to the joint venture partners from the Pallancata Mine, but such dividends are expected to be paid by the end of June 2008.

During the 3-month period ended March 31, 2008, IMZ achieved the following significant accomplishments (all amounts reported in US$):

--  Completed the quarter with $67.1 million in cash and equivalents,
    aggregate working capital of $65.5 million and total assets of $155.0
    million.
    
--  Generated net income of $4.12 million, primarily comprised of: equity
    earnings from IMZ's 40% interest in the Pallancata Mine; a non-cash foreign
    exchange gain; and interest income. IMZ accounts for its interest in
    Pallancata on an equity accounting basis.
    
--  Realized production at the Pallancata Mine of 50,893 tonnes producing
    approximately 500,000 ounces of silver and 1,930 ounces of gold on a 100%
    basis, with the Company's 40% share of production being approximately
    200,000 ounces of silver and 770 ounces of gold.
    
--  Realized fiscal year-to-date production at the Pallancata Mine of
    129,228 tonnes of ore recovering 1,204,000 ounces of silver and 4,690
    ounces of gold on a 100% basis, with the Company's 40% share being 481,600
    ounces of silver and 1,876 ounces of gold since start up in September 2007.
    
--  Announced updated proven and probable reserves at the Pallancata Mine
    of 3.5 million tonnes at an average grade of 289 grams per tonne ("g/t")
    silver and 1.2 g/t gold containing a total of 32.9 million ounces of silver
    and 142,000 ounces of gold on a 100% basis. See news release dated March
    17, 2008 for details.  This updated reserve estimate represents a 187%
    increase from the previously-released reserve estimates. An updated
    National Instrument (NI) 43-101 technical report is pending.
    
--  Expended $4.7 million in resource property activities mainly in
    preliminary feasibility study drilling, metallurgy and field work for the
    Gaby gold property in Ecuador; for detailed engineering, metallurgy, field
    work and development costs for the Rio Blanco gold-silver project in
    Ecuador; and for exploration field work on the Urbaque project (adjacent to
    Pallancata) in Peru.
    
--  Continued working on an updated capital and operating cost estimate
    for the Rio Blanco project in Ecuador, which is expected to be completed by
    June 30, 2008.
    
--  Announced an estimated 308.4 million tonnes at an average grade of
    0.63 g/t gold containing 6.2 million ounces of measured and indicated gold
    resources at the Gaby gold property in Ecuador (the first NI 43-101
    compliant mineral resource estimate). See news release dated February 11,
    2008 for details. The Company also announced the results of a preliminary
    feasibility study for the Gaby project, which was not positive at a base
    case gold price of $650/oz gold. Optimization studies using higher
    production tonnages are ongoing at Gaby to evaluate the economy of scale
    effects on the overall project economics. This study is expected to be
    completed by the end of September 2008.
    
--  Received assay results from an additional 38 core drill holes totaling
    10,927 meters ("m") at the Main Gaby deposit at Gaby, including a drill
    intersection of 205m grading 1.3 g/t gold and 202m at 0.8 g/t gold.  These
    new drill results were not included in the measured and indicated resource
    estimate described above.
    

Quarterly production statistics, as reported by Hochschild, for the Pallancata Mine (100% basis) are summarized below for the last two calendar quarters:


                                                   Q1 2008     Q4 2007
                                     ----------   ---------   ---------
Ore production                       (tonnes)        50,893      63,612
Average head grade silver            (g/t)           340.10      322.64
Average head grade gold              (g/t)             1.61        1.54
Concentrate produced                 (tonnes)           541         560
Silver grade in concentrate          (kg/t)           28.71       33.25
Gold grade in concentrate            (kg/t)            0.11        0.13
Silver produced                      (,000 ozs)         500         599
Gold produced                        (,000 ozs)        1.93        2.33
Silver sold                          (,000 ozs)         391         550
Gold sold                            (,000 ozs)        1.44        2.03
                                     ----------   ---------   ---------


Subsequent to the end of the quarter, on April 18, 2008, the National Constituent Assembly in Ecuador approved a new mining mandate, pending the issuance of a revised mining law. The Company is analyzing the impact of the mandate on its Rio Blanco project (currently in the permitting process) and the Gaby project (currently in the preliminary feasibility stage of development). Until the Company understands the full impact of the mining mandate, all drilling and the majority of on-site exploration activities at the Ecuador projects have been suspended. Critical technical studies, however, are continuing at both Rio Blanco and Gaby. As far as the Company is aware, all of its concessions remain in good standing, however, the effects of the mining mandate have not yet been clarified.

    For additional information, contact Wendy Yang Tel: (303) 357-4863
                Internet Site: http://www.intlminerals.com

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 drilling and development programs on the Company's projects, timing of commencement of production, completion of feasibility studies, obtaining of required environmental and production permits, and timing and significance of future cash flows 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 mineral resources and reserve; risks relating to project 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.



INTERNATIONAL MINERALS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Expressed in United States Dollars)
(Unaudited)


ASSETS                                          3/31/2008      6/30/2007
                                              -------------  -------------

Current
  Cash and equivalents                        $  67,130,569  $  29,889,675
  Short term investments                                  -     54,552,630
  Receivables                                     1,189,679        116,654
  Due from related parties                           50,017              -
  Prepaid expenses and deposits                      16,107          6,007
  Securities held for trade                         299,350        103,252
                                              -------------  -------------
                                                 68,685,722     84,668,218

  Property and equipment                            342,044        342,308
  Investments                                     1,243,708         15,000
  Investment in joint venture                    10,303,303      6,270,221
  Resource properties                            73,273,234     57,982,008
  Environmental bond                                 54,819        136,418
  Deferred finance costs                          1,074,040      1,332,448
                                              -------------  -------------
                                              $ 154,976,870  $ 150,746,621
                                              =============  =============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current
  Accounts payable and accrued liabilities    $   2,483,442  $   3,375,236
  Accrued interest payable on convertible
   debentures                                       716,705        173,070
  Due to related parties                                  -          5,932
                                              -------------  -------------
                                                  3,200,147      3,554,238
                                              -------------  -------------

Long term
  Convertible debentures                         35,429,840     33,507,969
                                              -------------  -------------
                                                 35,429,840     37,062,207
                                              -------------  -------------

Shareholders' equity
  Capital stock                                 128,748,151    126,117,325
  Contributed surplus                             4,458,384      3,655,503
  Equity component of convertible debentures      4,945,008      4,945,008
  Deficit                                       (21,804,660)   (21,033,422)
                                              -------------  -------------
                                                116,346,883    113,684,414
                                              -------------  -------------

                                              $ 154,976,870  $ 150,746,621
                                              =============  =============




INTERNATIONAL MINERALS CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT
(Expressed in United States Dollars)
(Unaudited)


                   3-Month        3-Month        9-Month        9-Month
                Period Ended   Period Ended   Period Ended   Period Ended
EXPENSES           3/31/08        3/31/07        3/31/08        3/31/07
                -------------  -------------  -------------  -------------

  Amortization  $       4,935  $       8,619  $      16,602  $      22,832
  General
   exploration            888              -         16,282              -
  Investor
   relations          109,596        164,359        327,432        223,986
  Office and
   general             68,842         54,045        147,431        141,110
  Professional
   fees               311,105          6,730        461,768        168,002
  Salaries and
   benefits           187,172        148,000        602,306        342,078
  Salary
   charge-outs        (39,915)       (31,673)      (113,238)       (71,809)
  Stock-based
   compensation       127,831      1,086,868      1,737,493      1,301,197
  Transfer
   agent &
   listing fees        59,229         46,138        100,996         85,610
  Interest and
   financing
   costs              897,305        736,856      2,667,508      2,294,965
  Travel               25,617          8,138         79,859         31,453
  Write-off of
   mineral
   properties               -              -              -      1,631,420
                -------------  -------------  -------------  -------------
                    1,752,605      2,228,080      6,044,439      6,170,844
                -------------  -------------  -------------  -------------


OTHER ITEMS

  Foreign
   exchange
   (loss) gain  $   1,564,264  $    (179,596) $    (440,558) $  (1,816,354)
  Unrealized
   (loss) gain
   on securities
   held for
   trade              (33,117)             -        177,118              -
  Gain on sale
   of marketable
   securities               -      4,568,393              -      4,639,306
  Management
   fee income          91,538         54,926        283,939        129,982
  Interest
   income             586,347        545,650      2,385,744      2,131,305
  Equity gain
   in joint
   venture          3,659,400              -      2,866,958              -
                -------------  -------------  -------------  -------------
                    5,868,432      4,989,373      5,273,201      5,084,239
                -------------  -------------  -------------  -------------

Net (loss)
 income for
 the period         4,115,827      2,761,293       (771,238)    (1,086,605)

Deficit,
 beginning of
 period           (25,920,487)   (21,868,338)   (21,033,422)   (18,020,440)
                -------------  -------------  -------------  -------------

Deficit, end
 of period      $ (21,804,660) $ (19,107,045) $ (21,804,660) $ (19,107,045)
                =============  =============  =============  =============

Basic and
 diluted (loss)
 income per
 share for
 the period     $        0.04  $        0.03  $       (0.01) $       (0.01)
                -------------  -------------  -------------  -------------

Weighted average
 number of
 common shares
 outstanding       95,858,748     94,135,451     95,551,477     92,626,928
                =============  =============  =============  =============




INTERNATIONAL MINERALS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOW
(Expressed in United States Dollars)
(Unaudited)


                      3-Month       3-Month       9-Month       9-Month
                    Period Ended  Period Ended  Period Ended  Period Ended
                      3/31/2008     3/31/2007     3/31/2008     3/31/2007
                    ------------  ------------  ------------  ------------
CASH FLOWS FROM
 OPERATING
 ACTIVITIES
  Net income
   (loss) for the
   period           $  4,115,827  $  2,761,293  $   (771,238) $ (1,086,605)
  Add non-cash
   items:
  Amortization             4,935         8,619        16,602        22,832
  Stock-based
   compensation          127,831     1,086,868     1,737,493     1,301,197
  Unrealized
   foreign exchange
   loss (gain)        (1,564,264)      233,083       440,558     1,816,354
  Unrealized (gain)
   loss on
   securities held
   for trade              33,117             -      (177,118)            -
  Gain on sale of
   marketable
   securities                  -    (4,568,393)            -    (4,639,306)
  Accrued interest
   receivable                494       (13,408)       (6,706)      (55,000)
  Write-off of
   mineral
   properties                  -             -             -     1,631,420
  Interest and
   financing costs       897,305       894,498     1,564,494     1,405,326
  Equity gain on
   investment in
   joint venture      (3,659,400)            -    (2,866,958)            -

  Changes in
   non-cash working
   capital items:
  (Increase)
   decrease in
   receivables           (35,015)       30,580    (1,073,025)       62,425
  (Increase)
   decrease in
   prepaid expense
   and deposits              157         3,006       (10,100)        3,288
  Increase
   (decrease) in
   accounts payable
   and accrued
   liabilities           171,923      (294,632)     (671,868)      (64,845)
  Due to / (from)
   related parties       (24,563)      (81,794)      (55,949)     (217,104)
                    ------------  ------------  ------------  ------------

  Net cash
   provided by
   (used in)
   operating
   activities             68,347        59,720    (1,873,815)      179,982
                    ------------  ------------  ------------  ------------


CASH FLOWS FROM
 FINANCING
 ACTIVITIES
  Proceeds from the
   issuance of
   capital stock         897,855    12,291,044     1,067,392    12,564,406
                    ------------  ------------  ------------  ------------

  Net cash provided
   by (used in)
   financing
   activities            897,855    12,291,044     1,067,392    12,564,406
                    ------------  ------------  ------------  ------------


CASH FLOWS FROM
 INVESTING
 ACTIVITIES
  Change in
   short-term
   investments                 -             -    55,046,584             -
  Change in
   long-term
   investments        (1,243,708)            -    (1,243,708)            -
  Resource property
   expenditures       (4,656,063)   (5,266,545)  (15,820,820)  (12,756,734)
  Investments in
   joint venture               -        (1,020)            -      (200,289)
  Purchase of
   property and
   equipment             (11,876)            -       (16,338)      (50,854)
  Proceeds from the
   sale of
   marketable
   securities                  -     5,947,859             -     6,028,146
  Purchase of
   marketable
   securities                  -             -             -       (94,623)
  Environmental
   bond                        -             -        81,599        53,391
                    ------------  ------------  ------------  ------------

  Net cash provided
   by (used in)
   investing
   activities         (5,911,647)      680,294    38,047,317    (7,020,963)
                    ------------  ------------  ------------  ------------

Effect of exchange
 rate changes on
 cash and
 equivalents                   -       (98,798)            -    (2,922,383)
                    ------------  ------------  ------------  ------------

Change in cash and
 equivalents for
 the period           (4,945,445)   12,932,260    37,240,894     2,801,042

Cash and
 equivalents,
 beginning of
 period               72,076,014    72,585,920    29,889,675    82,717,138
                    ------------  ------------  ------------  ------------

Cash and
 equivalents, end
 of period          $ 67,130,569  $ 85,518,180  $ 67,130,569  $ 85,518,180
                    ============  ============  ============  ============

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