SOURCE: International Minerals Corporation

International Minerals Corporation

April 06, 2011 18:00 ET

International Minerals Updates Reserve and Resource Estimates at Pallancata Silver Mine

SCOTTSDALE, AZ--(Marketwire - April 6, 2011) - International Minerals Corporation (TSX: IMZ) (SWISS: IMZ) reports updated mineral reserve and resource estimates for the Pallancata silver mine, jointly owned by IMZ (40% interest) and Hochschild Mining plc ("Hochschild", 60% interest) based on information supplied by Hochschild, the mine operator, as at December 31, 2010.

Resources and Reserves reported below (and detailed in Table 1) are estimated using a marginal cut-off grade of 147 grams per tonne ("g/t") silver equivalent, which reflects a marginal cut-off value of US$55 per tonne using conservative metal prices of US$15.00 per ounce of silver and US$900 per ounce of gold.

Proven and Probable ("P&P") Reserve estimates (on a 100% basis):

  • 38.5 million ounces of silver and 182,000 ounces of gold contained within 3.9 million tonnes ("Mt") at an average grade of 308 g/t silver and 1.5 g/t gold. 40% of these reserve ounces are attributable to IMZ.

Although this updated Reserve estimate represents a year-over-year ("YOY") decrease in contained ounces of 13% for silver and 5% for gold, ongoing exploration drilling has the potential to replace the production on a year-by-year basis. Mine life continues to be approximately 4 years on a reserve basis with additional mine planning and underground development required to upgrade the current M&I and Inferred Resources to Reserves.

Measured and Indicated ("M&I") Resource estimate (on a 100% basis and including P&P Reserves):

  • 60.6 million ounces of silver and 280,000 ounces of gold contained within 4.9 Mt at an average grade of 385 g/t silver and 1.8 g/t gold. 40% of these resource ounces are attributable to IMZ.

This updated M&I Resource estimate represents a YOY decrease in contained ounces of 10% for silver and 3% for gold.

Inferred Resource estimate (on a 100% basis):

  • 25.4 million ounces of silver and 104,000 ounces of gold contained within 2.4 Mt at an average grade of 329 g/t silver and 1.3 g/t gold. 40% of these resource ounces are attributable to IMZ.

This updated Inferred Resource estimate represents a YOY increase in contained ounces of 32% for silver and 35% for gold.

Commenting on the updated resource and reserve estimates, Stephen Kay, President/CEO of IMZ, said, "The overall resources continue to grow at Pallancata, showing that the mine can consistently replace its production through successful exploration programs. During 2011, an aggressive exploration and development drilling campaign will continue, which is designed to both define new resources and to convert existing resources into reserves. IMZ expects that the mine will continue to be one of the largest and lowest cost silver producers in the world for many years to come."

In 2010 the Pallancata mine produced 10.14 million ounces of silver and 35,848 ounces of gold. Since commencement of production in September 2007 (at 500 tonnes per day) to December 31, 2010 (at 3,000 tonnes per day), the Pallancata operation has processed approximately 2.5 million tonnes of material and produced 23.4 million ounces of silver and 86,700 ounces of gold.

IMZ expects that the mine will produce approximately 9.3 million ounces of silver and 36,500 ounces of gold during calendar year 2011, with 40% of those ounces attributable to IMZ. The slight decrease in projected silver production in 2011 over 2010 is due primarily to the mine being able, at current metal prices, to exploit lower grade areas at a lower cut-off grade of 147 g/t silver equivalent compared to 160 g/t silver equivalent in the previous year.

Table 1: Pallancata Mine - Mineral Reserve and Resource Estimates (Effective date of Dec 31, 2010)

Estimate
Category
  Tonnes   Average Grade
(g/t silver)
  Average Grade
(g/t gold)
  100%
Basis Contained Silver
Ounces
  100%
Basis Contained
Gold
Ounces
  IMZ 40% Attributable Silver Ounces   IMZ 40% Attributable
Gold Ounces
Proven
Reserves
  3,353,000   308   1.5   33,185,000   160,000   13,274,000   63,800
Probable
Reserves
  526,000   313   1.5   5,289,000   23,000   2,116,000   9,200
Total
Reserves
  3,879,000   308   1.5   38,474,000   183,000   15,390,000   73,000
                             
Resource
Category
  Tonnes   Average Grade
(g/t silver)
  Average Grade
(g/t gold)
  100%
Basis Contained Silver
Ounces
  100%
Basis
Contained
Gold
Ounces
  IMZ 40% Attributable Silver Ounces   IMZ 40% Attributable
Gold Ounces
Measured
Resources
  4,269,000   390   1.8   53,583,000   250,100   21,433,000   100,000
Indicated
Resources
  630,000   345   1.5   6,990,000   30,000   2,796,000   12,000
Total
Measured
and
Indicated
Resources
  4,899,000   385   1.8   60,573,000   280,100   24,229,000   112,000
                             
Inferred
Resources
  2,402,000   329   1.3   25,425,000   104,100   10,170,000   41,600
  1. Measured and Indicated Resources include Proven and Probable Reserves.
  2. Metal prices used are US$15.00/oz for silver and US$900/oz for gold.
  3. The estimated reserves include 19% for ore losses and 15% for dilution assigned using zero grade.
  4. The estimated mineral resources are not mineral reserves and do not have demonstrated economic viability.
  5. Numbers have been rounded in all categories to reflect the precision of the estimates.
  6. The mineral resources were estimated using ordinary kriging for the major vein units and inverse distance to the power of three for peripheral veins. 
  7. Contained metal in estimated reserves remains subject to metallurgical recovery losses.
  8. The resource and reserve estimates reflect the deposit at the Pallancata Mine as of December 31, 2010.

Hochschild's data and methodology have been reviewed by IMZ's VP of Corporate Development, Nick Appleyard, and IMZ's Engineering Manager, Bob Taylor, both Qualified Persons as defined by National Instrument 43-101.

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.

About International Minerals

In addition to the Pallancata Mine, IMZ also owns a 40% interest in the development stage 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 owns a 3% net smelter return royalty from Barrick's Ruby Hill open pit gold mine in Nevada, which produced approximately 78,000 gold ounces in 2010 and has published reserves of approximately 1.1 million gold ounces.

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

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 estimates of reserves and resources and anticipated production results. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties such as: risks of estimating mineral resources and reserves, variances between mineral reserves and actual mineral production, operating risks and other risks and uncertainties detailed in the Company's 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 Relations
    Tel: +1 480 483 9932

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

    E-mail: Email Contact
    Internet Site: http://www.intlminerals.com