SOURCE: International Minerals Corporation

November 18, 2008 08:30 ET

International Minerals Reports Net Income of US$3.73 Million for First Fiscal Quarter Ended September 30, 2008

SCOTTSDALE, AZ--(Marketwire - November 18, 2008) - International Minerals Corporation (TSX: IMZ) (SWX: IMZ) ("the Company") reported US$3.73 million in consolidated net income for the fiscal first quarter ending September 30, 2008.

During the first fiscal quarter, IMZ achieved the following significant accomplishments (all amounts reported in US$):

--  Completed the quarter with $57.2 million in cash and equivalents,
    aggregate working capital of $54.9 million and total assets of $162.4
    million.
    
--  Reported consolidated net income of $3.73 million, consisting
    primarily of a $3.51 million equity gain on investment and $0.31 million in
    equity income related to the Company's 40%-owned Pallancata silver-gold
    mine in Peru. IMZ's joint venture partner at Pallancata, Hochschild Mining
    PLC ("Hochschild") is the mine operator and holds a 60% interest in the
    project.
    
--  Announced 8% higher total silver production at the Pallancata Mine of
    899,000 ounces at total cash costs of $5.77 per ounce of silver (net of
    gold by-product credit) compared to $5.72 per ounce for the prior three-
    month period (829,000 silver ounces produced). Of the total production of
    899,000 ounces of silver and 3,350 ounces of gold, the Company's
    attributable 40% share was approximately 359,600 ounces of silver and 1,340
    ounces of gold.
    
--  Announced a significant increase to the estimated proven and probable
    mineral reserves at the Pallancata Mine to 5.8 million tonnes at an average
    grade of 329 grams per tonne ("g/t") silver and 1.2 g/t gold, containing
    approximately 62.3 million ounces of silver and 232,000 ounces of gold on a
    100% project basis.
    

This updated reserve estimate represents an 80% increase from the previously released reserve estimate of March 2008 and more than a 450% increase from the reserves estimated in a pre-feasibility study in August 2007.

The consolidated net income for the quarter ended September 30, 2008 of $3.73 million ($0.04 per share) compares to a net loss of $2.7 million (loss of $0.03 per share) for the fiscal first quarter of 2007. The gain is due principally to the equity gain at the Pallancata Mine joint venture of $3.8 million (2007 - loss of $292,442) and the increased foreign exchange gain of $1.2 million (2007 - loss of $1.8 million) due to a weakening of the Canadian dollar against the US dollar. The equity gain resulted from Hochschild sole-funding the costs of expansion of the Pallancata Mine to the 1,000 tonnes per day ("tpd") production level. Capital costs beyond 1,000 tpd are paid 60% by Hochschild and 40% by IMZ.

To date the Pallancata joint venture company, Minera Suyamarca S.A.C. ("Suyamarca"), owned 60% by Hochschild and 40% by IMZ, has not yet distributed cash dividends to the joint venture partners due primarily to the continuing capital investments required for mine expansion from 1,000 tpd to 2,000 tpd and to lower revenue due to declining metal prices. Suyamarca is expected to commence distributing cash dividends to the joint venture partners in calendar second half of 2009, but such cash distributions are dependent on metal prices and sustaining capital cost requirements.

On October 17, 2008, the Company commenced a normal course issuer bid (or share repurchase program) to purchase through the market on the Toronto Stock Exchange 5.0 million of its common shares ("Shares"), representing 5.21% of the Company's 96,030,001 issued and outstanding Shares, as at October 8, 2008. As of November 12, 2008, a total of 527,900 shares had been repurchased at an average price of C$2.69 per Share for a total cost of C$1,421,796. Repurchased Shares will be cancelled.

Outlook

During the balance of fiscal year 2009, the Company's production, exploration and development efforts are expected to focus primarily on:

--  Expanding mine production at the Pallancata silver-gold mine in Peru
    to over 6 million ounces of silver equivalent, making it one of the top-ten
    largest primary silver producers in the world.
    
--  At the Rio Blanco gold-silver project in Ecuador: obtaining required
    environmental and production permits for the construction and development
    of a gold-silver mining operation at Rio Blanco in Ecuador, subject to the
    expiry of the April 2008 Ecuadorian Mining Mandate expected in January
    2009, finalization of the new mining law, and obtaining additional required
    financing.  Construction could commence approximately three to six months
    following granting of all the necessary permits.
    
--  At the Gaby gold project in Ecuador: advancing an economic
    optimization study as a step towards a final feasibility study, if
    warranted. The optimization study is evaluating the potential for enhanced
    economics based on a significantly higher production rate (40,000 to 80,000
    tpd) than used in the February 2008 preliminary feasibility study (20,000
    tpd). The future status of Gaby will also depend on the pending new mining
    law in Ecuador.
    
--  Continuing drilling at the Urbaque property in Peru under the joint
    venture agreement with Barrick and at the Pacapausa project in Peru under
    the agreement between Southwestern and IMZ-Hochschild (funded by the
    Pallancata joint venture company, Suyamarca).
    
--  Seeking new property acquisitions to continuously replenish the
    Company's pipeline of projects, together with additional strategic joint
    venture alliances, such as that with Hochschild at Pallancata and
    Pacapausa, in order to advance projects with reduced additional cash
    outlays by the Company.
    

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 capital expansion costs and completion, 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 amounts 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; risks related to a new mining law in Ecuador, and other risks and uncertainties detailed in the Company's Renewal Annual Information Form for the year ended June 30, 2008, 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                                        9/30/2008       6/30/2008
                                            --------------  --------------

Current
   Cash and equivalents                     $   57,248,625  $   60,447,985
   Short term investments                        1,561,886       1,560,496
   Receivables                                     240,921         140,275
   Due from related parties                        123,556         124,681
   Prepaid expenses and deposits                    14,636          22,889
   Securities held for trade                       175,645         254,075
                                            --------------  --------------
                                                59,365,269      62,550,401

   Property and equipment                          748,226         444,453
   Investments                                      25,000          25,000
   Investment in joint venture company          27,059,155      22,972,335
   Resource properties                          74,196,540      71,965,109
   Environmental bond                               68,352          54,819
   Deferred finance costs                          902,080         988,530
                                            --------------  --------------
                                            $  162,364,622  $  159,000,647
                                            ==============  ==============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current
   Accounts payable                         $      593,830  $      954,051
   Accrued Severance and Payroll                 1,220,638       1,189,445
   Accrued interest payable on convertible
    debentures                                     706,350         181,321
   Due to equity partner in joint venture
    company                                      1,870,533       1,870,533
                                            --------------  --------------
                                                 4,391,351       4,195,350

Long term
   Convertible debentures                       35,430,223      36,111,085
                                            --------------  --------------
                                                39,821,574      40,306,435
                                            --------------  --------------

Shareholders' equity
   Capital stock                               129,850,285     129,850,285
   Contributed surplus                           5,220,027       5,101,104
   Equity component of convertible
    debentures                                   4,945,008       4,945,008
   Deficit                                     (17,472,272)    (21,202,185)
                                            --------------  --------------
                                               122,543,048  118,694,212.00
                                            --------------  --------------

                                            $  162,364,622  $  159,000,647
                                            ==============  ==============






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


                                                 3-Month        3-Month
                                              Period Ended   Period Ended
                                                9/30/2008      9/30/2007
                                              -------------  -------------
EXPENSES

   Amortization                               $      32,198  $       5,949
   General exploration                               38,981         15,394
   Investor relations                                52,417        120,004
   Office and general                                48,584         39,839
   Professional fees                                177,189         86,406
   Salaries and benefits                            238,365        193,776
   Salary charge-outs                               (40,760)       (20,860)
   Stock-based compensation                         118,923      1,161,645
   Transfer agent and listing fees                   38,516         31,006
   Interest and financing costs                     882,928        855,310
   Travel                                            36,149         25,897
                                              -------------  -------------
                                                  1,623,490      2,514,366
                                              -------------  -------------

OTHER ITEMS
   Foreign exchange (loss) gain                   1,217,181     (1,763,805)
   Unrealized gain (loss) on securities held
    for trade                                       (76,378)       164,096
   Management fee income                            138,216         80,800
   Interest income                                  366,742      1,594,262
   Equity gain on capital contributions in
    joint venture                                 3,505,280              -
   Equity gain (loss) in joint venture              313,904       (292,442)
   Write-off of resource properties                (111,542)             -
                                              -------------  -------------
                                                  5,353,403       (217,089)
                                              -------------  -------------


Net income (loss) for the period                  3,729,913     (2,731,455)

Deficit, beginning of period                    (21,202,185)   (21,033,422)
                                              -------------  -------------

Deficit, end of period                        $ (17,472,272) $ (23,764,877)
                                              =============  =============

Earnings (loss) per common share - basic and
 diluted                                      $        0.04  $       (0.03)
                                              =============  =============

Weighted averge number of common
 shares outstanding                              96,030,001     95,220,264
                                              =============  =============








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


                                                  3-Month       3-Month
                                                Period Ended  Period Ended
                                                  9/30/2008     9/30/2007
                                                ------------  ------------

CASH FLOWS FROM OPERATING ACTIVITIES

   Net income (loss) for the period             $  3,729,913  $ (2,731,455)
   Non-cash items
      Amortization                                    32,198         5,949
      Stock-based compensation                       118,923     1,161,645
      Unrealized exchange loss (gain)               (950,259)    1,763,805
      Unrealized loss (gain) loss on securities
       held for trade                                 76,378      (164,096)
      Accrued interest receivable                          -        (1,977)
      Write-off of resource properties               111,542             -
      Interest and financing costs                   882,928       855,310
      Equity loss (gain) on investment in joint
       venture                                      (313,904)      292,442
      Equity gain on capital contribution in
       joint venture                              (3,505,280)            -
   Changes in non-cash working capital items:
      (Increase) decrease in receivables            (100,646)       21,403
      (Increase) decrease in prepaid expense
       and deposits                                    8,253        (9,679)
      Increase (decrease) in accounts payable
       and accrued liabilities                       684,091    (1,644,413)
      Due to / (from) related parties                  1,125      (120,110)
                                                ------------  ------------
   Net cash provided by (used in) operating
    activities                                       775,262      (571,176)
                                                ------------  ------------

CASH FLOWS FROM FINANCING ACTIVITIES

   Proceeds from issuance of capital stock                 -       139,635
                                                ------------  ------------

   Net cash provided by financing activities               -       139,635
                                                ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES

   Change in short term investments                   (1,390)   55,046,582
   Resource property expenditures                 (3,308,112)   (4,645,307)
   Investments in joint venture                     (293,676)      (89,763)
   Purchase of property and equipment               (357,911)       (4,620)
   Environmental bond                                (13,533)       81,599
                                                ------------  ------------

   Net cash (used in) provided by investing
    activities                                    (3,974,622)   50,388,491
                                                ------------  ------------


Change in cash and equivalents for the period     (3,199,360)   49,956,950

Cash and equivalents, beginning of period         60,447,985    29,889,675
                                                ------------  ------------

Cash and equivalents, end of period             $ 57,248,625  $ 79,846,625
                                                ============  ============

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