SOURCE: International Minerals Corporation

International Minerals Corporation

January 25, 2011 17:00 ET

International Minerals Reports Record Quarterly and Annual Production From Pallancata Mine

SCOTTSDALE, AZ--(Marketwire - January 25, 2011) - International Minerals Corporation (TSX: IMZ) (SWISS: IMZ) reports that silver production (100% project basis) at the Pallancata Mine for its second fiscal quarter ended December 31, 2010 (Q2 2011) increased 10% from the prior quarter to a record 2.76 million ounces. IMZ's 40% share of the silver ounces produced in Q2 2011 is 1.1 million.

In addition, for the 12-month period ended December 31, 2010, the Pallancata Mine production increased by 20% year-over-year to a record of 10.14 million ounces of silver. The mine also produced 35,848 ounces of gold in the same period, which represents an increase of 12% year-over-year. IMZ's share of metal production in calendar year 2010 is 4.05 million ounces of silver and 14,339 ounces of gold.

The Pallancata Mine is jointly owned by IMZ (40%) and Hochschild Mining plc ("Hochschild", 60% owner and the mine operator).

For both fiscal Q2 2011 and the 12 month period ended December 31, 2010, direct on-site costs are expected to be below US$3.00 per ounce of silver produced (net of gold by-product credit) and total cash costs (as defined by the Gold Institute) are expected to be below US$6.00 per ounce of silver produced (net of gold by-product credit). Final cost estimates are currently in progress and will be announced in IMZ's Q2 2011 Financial Statements on or before February 14, 2011.

Stephen Kay, President and CEO of IMZ, said, "Based on the calendar year 2010 production figures, the Pallancata Mine has now become the fifth largest primary silver mine in the world. This is quite an achievement considering that the mine only commenced production in late 2007 and it is a credit to Hochschild's operating experience and expertise. We look forward to receiving the annual independent audit of reserves and resources for the 2010 calendar year-end from Hochschild, which will be published in March."

Table 1: Pallancata Mine Production Highlights (100% Project Basis; in US Dollars)

On 100% Basis   Quarter Ended 12/31/10   Quarter Ended 9/30/10   Calendar Full Year 2010   Calendar Full Year 2009
Ore mined (tonnes)   304,277   286,357   1,092,188   904,447
Ore processed (tonnes)   281,035   273,239   1,071,617   922,521
Average head grade silver1(g/t)   358   337   344   327
Average head grade gold1 (g/t)   1.5   1.3   1.4   1.4
Concentrate produced (tonnes)   2,283   2,360   9,541   7,684
Silver grade in concentrate (kg/t)   37.6   33.1   33.0   34.1
Gold grade in concentrate (kg/t)   0.14   0.11   0.12   0.13
Silver produced2 (oz)   2,762,725   2,511,189   10,135,483   8,420,449
Gold produced2 (oz)   10,045   8,265   35,848   31,975
Silver sold3 (oz)   2,549,000   2,490,000   9,998,000   8,405,000
Gold sold3 (oz)   8,300   7,900   33,700   30,700

Table 2: Pallancata Mine Production Highlights (IMZ 40% Share)

IMZ's 40% Share   Quarter Ended 12/31/10   Quarter Ended 9/30/10   Calendar Full Year 2010   Calendar Full Year 2009
Silver produced2 (oz)   1,105,090   1,004,476   4,054,193   3,368,179
Gold produced2 (oz)   4,018   3,306   14,339   12,790
Silver sold (oz)   1,019,600   996,000   3,999,200   3,362,000
Gold sold (oz)   3,230   3,160   13,480   12,280


  1. The reported head grades for silver and gold are based on the overall metallurgical balance for the process plant.
  2. The difference between "produced" metal ounces and "sold" metal ounces is in-process concentrate.
  3. Silver and gold ounces sold are now reported as gross ounces. IMZ has also restated the previously reported sales, which had been reported as net payable ounces.
  4. Direct Site Costs per ounce silver and Total Cash Costs per ounce silver reflect a "mined ore inventory adjustment". IMZ believes that this calculation more accurately matches costs with ounces of production. (Also see notes 4 and 5 below.)
  5. Direct Site Costs per ounce silver comprise direct mining costs, mined ore inventory adjustment, toll processing costs and mine general and administrative costs (net of gold by-product credit).
  6. Total Cash Costs, using the Gold Institute's definition, comprise: mine operating costs, mined ore inventory adjustment, toll processing costs, mine general and administrative costs, Hochschild's management fee, concentrate transportation and smelting costs, taxes and the government royalty (currently approximately 3% of gross revenue for Pallancata), net of gold by-product credit.

IMZ uses an equity accounting basis to record its interest in the Pallancata Mine.

The technical information reported in this news release was reviewed by IMZ's Qualified Person, VP Corporate Development 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.

Cautionary Statement:

The Gold Institute calculation of Total Cash Costs is a non-Canadian GAAP financial measure, which IMZ management believes is useful in measuring operational performance. 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. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties such as the estimates of production costs, and other risks and uncertainties detailed in the Company's Renewal Annual Information Form for the fiscal year ended June 30, 2010, 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.

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