SOURCE: International Minerals Corporation

November 16, 2007 08:00 ET

International Minerals Reports Fiscal First Quarter Financial Results and Mine Opening at Pallancata Silver Mine, Peru

PHOENIX, AZ--(Marketwire - November 16, 2007) - International Minerals Corporation (TSX: IMZ) (SWISS: IMZ) (FRANKFURT: MIW) ("IMZ," or the Company) marked the official mine opening of its 40%-owned Pallancata silver-gold mine in Peru on November 8, 2007, following the successful commencement of underground mine production in September 2007. IMZ will start receiving its 40% share of cash flow from the Pallancata mine in the first quarter of 2008, which will enhance its already strong balance sheet (including cash of $79.8 million as of its fiscal first quarter ended September 30, 2007).

During the fiscal first quarter ended September 30, 2007 and year to date, IMZ achieved the following (all dollar amount are US dollars unless stated otherwise):

--  Completed the quarter with $79.8 million in cash, aggregate working
    capital of $77.9 million and total assets of $150.7 million;
--  Commenced production from the Pallancata silver-gold mine in Peru.
    The Company's joint venture partner, Hochschild Mining PLC ("Hochschild"),
    is the operator and holds a 60% interest in the project.  Under the terms
    of the joint venture agreement, Hochschild earned its 60% interest by
    investing all construction and development capital costs through to
    production, such costs being non-recoverable from the Company's share of
    cash flow;
--  Completed capital, exploration, feasibility and development
    investments of $4.6 million, mainly in preliminary feasibility study
    drilling, metallurgy and field work on the Gaby gold property in Ecuador,
    field work and development costs for the Rio Blanco gold-silver project in
    Ecuador, and field work on the Antabamba Project in Peru;
--  Completed an initial drill program at the Antabamba silver-gold
    project, with assay results including a drill intersection of 1.4 meters
    ("m") at 646 g/t silver. The Company has the right to acquire a 51%
    interest in the project, and is the operator, under an earn-in agreement
    with Barrick Gold Corporation's Peruvian subsidiary ("Barrick");
--  Completed a drill program at the Pacapausa silver project in Peru with
    assay results that include a drill intersection of 10.8 m at 212 g/t
    silver. Pacapausa is a joint venture between the Company (25% interest and
    operator), IAMGOLD Corp. (25% interest) and Southwestern Resources Corp.
    (50% interest);
--  Commenced a 2,000 m core drilling program (seven drill holes) at the
    Urbaque gold-silver project in Peru.  The Company has a right to acquire a
    51% interest in the project, and is the operator, under an earn-in
    agreement with Barrick.

The consolidated net loss for the three-month period ended September 30, 2007 was $2.7 million ($0.03 per share) compared to net loss of $1.5 million ($0.02 per share) for the equivalent period in 2006. The significant increase in the loss this period is due principally to the following: a) a substantial non-cash foreign exchange loss ($1.8 million) due to a strengthened Canadian dollar against the U.S. dollar for part of the period, relating to a prospectus offering of convertible debentures completed in May 2006 (2006-gain of $214,581); and b) an increase in stock based compensation of $1.2 million relating to the grant of new and amortization of existing stock options (2006-$Nil). Offsetting these increased costs was a significant increase in interest income for the three-month period of $1.6 million (2006-$0.9 million).

Capitalized resource property expenditures for the three-month period ending September 30, 2007 are $4.6 million compared to $3.2 million for the same period last year. The net change in 2007 reflected increased exploration and development activity in the period with a continuing focus on feasibility studies and development at the Rio Blanco and Gaby projects in Ecuador.

Although a new capital cost estimate has not yet been completed for Rio Blanco, industry-wide cost escalation has occurred, and a significant increase in capital costs is expected and may require additional debt and/or equity financing, unless there is sufficient cash flow from the Company's 40% interest in the Pallancata silver mine and/or previously existing warrants from the May 2006 prospectus offering are exercised by May 2008. Completion of the preliminary feasibility study at Gaby in Ecuador will be funded by existing cash reserves, but completion of a final feasibility study may require additional funding dependent upon funding requirements for the Rio Blanco project. The construction of a mining operation at the Pallancata property has been funded entirely by the Company's joint venture partner, Hochschild, but 40% of replacement capital costs and exploration costs must be funded by the Company if the mine's cash flows are insufficient to pay such costs . The Company's 40% share of the ongoing 2007 exploration drilling program (20,000 m) at Pallancata (estimated by the Company at $1.5 million) is being funded from existing working capital.


During fiscal year 2008, the Company's exploration and development efforts are expected to focus primarily on:

--  Expanding mine production and conducting further exploration drilling
    at the Pallancata silver property in Peru, working with the Company's
    partner, Hochschild. The Pallancata Mine is expected to produce significant
    cash flow for the Company in the second half of fiscal year 2008 and in
    future years as the mine expands.
--  Obtaining required environmental and production permits for the
    construction and development of a gold-silver mining operation at Rio
    Blanco in Ecuador. The Company expects to complete permitting by the end of
    calendar Q2 2008 and commence construction about three months later.
--  Completing the preliminary feasibility study at the Gaby gold project
    in Ecuador. This study will produce the first NI 43-101 compliant resources
    and reserves for the project.
--  Continuing drilling at the Antabamba and Urbaque properties in Peru
    under the joint venture agreements with Barrick and at the Pacapausa
    project in Peru under the agreement with Southwestern.
--  Commencing drilling of the Acos gold target in Peru under a joint
    venture agreement (the Company and IAMGOLD hold 50% each);
--  Seeking new property acquisitions to continuously replenish our
    pipeline of projects, together with additional strategic joint venture
    alliances, such as that with Hochschild at Pallancata, in order to advance
    projects with reduced additional cash outlays by the Company.


Stephen J. Kay, President and CEO

Cautionary Statement:

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

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 and completion of feasibility studies, 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 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.

(Expressed in United States Dollars)

ASSETS                                        9/30/2007       6/30/2007
                                            --------------  --------------

   Cash and equivalents                     $   79,846,625  $   29,889,675
   Short term investments                                -      54,552,630
   Receivables                                      95,251         116,654
   Due from related parties                        114,178               -
   Prepaid expenses and deposits                    15,686           6,007
   Securities held for trade                       283,996         103,252
                                            --------------  --------------
                                                80,355,736      84,668,218

   Property and equipment                          340,979         342,308
   Investments                                           -          15,000
   Investment in joint venture                   6,067,542       6,270,221
   Resource properties                          62,627,315      57,982,008
   Environmental bond                               54,819         136,418
   Deferred finance costs                        1,245,999       1,332,448
                                            --------------  --------------
                                            $  150,692,390  $  150,746,621
                                            ==============  ==============


   Accounts payable and accrued liabilities $    1,730,822  $    3,375,236
   Accrued interest payable on convertible
    debentures                                     738,577         173,070
   Due to related parties                                -           5,932
                                            --------------  --------------
                                                 2,469,399       3,554,238
                                            --------------  --------------

Long term
   Convertible debentures                       35,999,427      33,507,969
                                            --------------  --------------
                                                35,999,427      37,062,207
                                            --------------  --------------

Shareholders' equity
   Capital stock                               126,256,960     126,117,325
   Contributed surplus                           4,786,473       3,655,503
   Equity component of convertible
    debentures                                   4,945,008       4,945,008
   Deficit                                     (23,764,877)    (21,033,422)
                                            --------------  --------------
                                               112,223,564  113,684,414.00
                                            --------------  --------------

                                            $  150,692,390  $  150,746,621
                                            ==============  ==============

(Expressed in United States Dollars)

                                                 3-Month        3-Month
                                              Period Ended   Period Ended
                                                9/30/2007      9/30/2006
                                              -------------  -------------

   Amortization                               $       5,949  $       6,541
   General exploration                               15,394              -
   Investor relations                               120,004         25,139
   Office and general                                39,839         49,418
   Professional fees                                 86,406         19,160
   Salaries and benefits                            193,776         97,317
   Salary charge-outs                               (20,860)       (13,975)
   Stock-based compensation                       1,161,645              -
   Transfer agent and listing fees                   31,006         23,526
   Interest and financing costs                     855,310        778,231
   Travel                                            25,897          3,080
   Write-off of mineral properties                        -      1,631,420
                                              -------------  -------------
                                                  2,514,366      2,619,857
                                              -------------  -------------

   Foreign exchange (loss) gain                  (1,763,805)       214,581
   Unrealized gain on securities held for
    trade                                           164,096              -
   Gain on sale of marketable securities                  -         53,095
   Management fees                                   80,800         15,659
   Interest income                                1,594,262        880,600
   Equity loss in joint venture                    (292,442)             -
                                              -------------  -------------
                                                   (217,089)     1,163,935
                                              -------------  -------------

Net loss for the period                          (2,731,455)    (1,455,922)

Deficit, beginning of period                    (21,033,422)   (18,020,440)
                                              -------------  -------------

Deficit, end of period                        $ (23,764,877) $ (19,476,362)
                                              =============  =============

Net loss per common share - basic and diluted $       (0.03) $       (0.02)
                                              =============  =============

Weighted averge number of common
shares outstanding                               95,220,264     91,860,001
                                              =============  =============

(Expressed in United States Dollars)
                                                  3-Month       3-Month
                                                Period Ended  Period Ended
                                                  9/30/2007    09/30/2006
                                                ------------  ------------

   Net loss for the period                      $ (2,731,455) $ (1,455,922)
   Non-cash items
      Amortization                                     5,949         6,541
      Stock-based compensation                     1,161,645             -
      Unrealized exchange loss (gain)              1,763,805      (214,581)
      Unrealized (gain) loss on securities held
       for trade                                    (164,096)            -
      Gain on sale of marketable securities                -       (53,095)
                    Accrued interest receivable       (1,977)      (52,879)
      Write-off of resource properties                     -     1,631,420
      Interest and financing costs                   855,310       778,231
      Equity loss on investment in joint
       venture                                       292,442             -
   Changes in non-cash working capital items:
      (Increase) decrease in receivables              21,403    (1,253,501)
      (Increase) decrease in prepaid expense
       and deposits                                   (9,679)         (337)
      Increase (decrease) in accounts payable
       and accrued liabilities                    (1,644,413)      482,384
      Due to / (from) related parties               (120,110)     (156,831)
                                                ------------  ------------
   Net cash provided by operating activities        (571,176)     (288,570)
                                                ------------  ------------


   Proceeds from issuance of capital stock           139,635       (25,586)
                                                ------------  ------------

   Net cash provided by (used in) financing
    activities                                       139,635       (25,586)
                                                ------------  ------------


   Sale of short term investments                 55,046,582             -
   Resource property expenditures                 (4,645,307)   (3,169,350)
   Investments in joint venture                      (89,763)      (25,565)
   Purchase of property and equipment                 (4,620)       (6,256)
   Proceeds from the sale of marketable
    securities                                             -          (624)
   Environmental bond                                 81,599             -
                                                ------------  ------------

   Net cash provided by (used in) investing
    activities                                    50,388,491    (3,201,795)
                                                ------------  ------------

Change in cash and equivalents for the period     49,956,950    (3,515,951)

Cash and equivalents, beginning of period         29,889,675    82,717,138
                                                ------------  ------------

Cash and equivalents, end of period             $ 79,846,625  $ 79,201,187
                                                ============  ============

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