SOURCE: International Minerals Corporation

International Minerals Corporation

April 11, 2012 18:00 ET

International Minerals Updates Reserve and Resource Estimates at Pallancata Silver Mine

SCOTTSDALE, AZ--(Marketwire - Apr 11, 2012) - International Minerals Corporation (TSX: IMZ) (SWISS: IMZ) reports updated annual mineral reserve and resource estimates for the Pallancata silver mine in Peru, 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, 2011.

The updated mineral resource and reserve estimates reported below (and detailed in Table 1) are calculated using a marginal cut-off grade of 144 grams per tonne ("g/t") silver equivalent (using a 60:1 silver-to-gold ratio), which reflects a marginal cut-off value of approximately $65 per tonne using conservative metal prices of $18 per ounce of silver and $1,080 per ounce of gold.

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

  • 31.9 million ounces ("ozs") silver and 152,000 ozs gold (~41.0 million silver equivalent ozs).
  • 3.45 million tonnes ("Mt") at an average grade of 287 g/t silver and 1.4 g/t gold.
  • 40% of these P&P Reserves are attributable to IMZ.

The updated reserve estimate represents a year-over-year decrease of approximately 11% in tonnage and 17% in contained ounces for both silver and gold. In addition to depletion from 2011 mining, this decrease in reserves is due primarily to (a) the lag in mine development required to upgrade Measured and Indicated ("M&I") resources to P&P reserves (pursuant to Hochschild's current methodology for determining reserves) as the mine expands into new, narrower (less than 4 meters width) vein zones away from the principal producing vein to date -- the Pallancata vein; (b) production from narrower veins leads to an increase in dilution, which for estimation purposes is assigned zero metal content; and (c) the exclusion of certain portions of the resources from the P&P reserves because of operational scheduling.

The 2012 mine plan calls for 28,000 meters of underground development to allow for the conversion of additional M&I resources to P&P reserves.

Measured and Indicated Resource Estimate (on a 100% project basis and including P&P Reserves):

  • 60.0 million ozs silver and 278,000 ounces gold (~76.7 million silver equivalent ozs).
  • 5.0 Mt at an average grade of 372 g/t silver and 1.7 g/t gold.
  • 40% of these resource ounces are attributable to IMZ.

Essentially, the updated resource estimate is the same as the previous year showing that mined resources are being replaced by ongoing exploration and delineation drilling programs, with a year-over-year increase of approximately 2% in tonnage and a 1% decrease in contained silver and gold ounces.

Inferred Resource Estimate (on a 100% basis):

  • 31.3 million ozs silver and 132,000 ozs gold (~39.2 million silver equivalent ozs).
  • 2.8 Mt at an average grade of 347 g/t silver and 1.5 g/t gold.
  • 40% of these resource ounces are attributable to IMZ.

This updated inferred resource estimate represents a year-over-year increase of approximately 17% in tonnage and 23% in contained silver ounces and 27% in contained gold ounces. An aggressive drilling program of 38,000m in 2012 is underway to upgrade these Inferred resources to the M&I category for ultimate conversion to P&P reserves when sufficient underground development is in place and economic viability can be confirmed.

Discussion and Details of Resource and Reserve Estimates

Commenting on the updated resource and reserve estimates, Stephen Kay, President/CEO of IMZ said, "Five years into the operation of the Pallancata Mine, and after having produced almost 32 million ounces of silver and 120,000 ounces of gold through the end of 2011, the overall precious metal resources at Pallancata continue to expand. Successful surface and underground drilling programs, combined with underground development to produce additional reserves, show that metal resources can be consistently replaced at the mine, thus allowing Pallancata to continue its mine life for many years to come as one of the largest and lowest cost silver producers in the world."

In 2011 the Pallancata Mine produced 8.77 million ounces of silver and 33,881 ounces of gold. IMZ estimates that the mine will produce approximately 8.0 million ounces of silver and 34,000 ounces of gold during calendar year 2012, with 40% of those ounces attributable to IMZ.

Table 1: Pallancata Mine - Mineral Reserve and Resource Estimates (Effective date of Dec 31, 2011) at a Marginal Cut-off grade of 144 g/t Silver Equivalent, using a 60:1 Silver-to-Gold Ratio

Reserve Category Tonnes Average
(g/t silver)
(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 2,739,000 289 1.4 25,487,000 121,000 10,195,000 48,000
Probable Reserves 711,000 278 1.3 6,362,000 31,000 2,545,000 12,000
Total Reserves 3,450,000 287 1.4 31,848,000 152,000 12,739,000 61,000
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 4,196,000 382 1.8 51,500,000 238,000 20,600,000 95,000
Indicated Resources 819,000 323 1.5 8,506,000 40,000 3,402,000 16,000
Total Measured and Indicated Resources 5,015,000 372 1.7 60,006,000 278,000 24,002,000 111,000
Inferred Resources 2,813,000 347 1.5 31,335,000 132,000 12,534,000 53,000
  1. Measured and Indicated Resources include Proven and Probable Reserves.
  2. Metal prices used are US$18.00/oz for silver and US$1080/oz for gold.
  3. The estimated reserves include 24% for ore losses and 21% 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, 2011.

Hochschild's data and methodology have been reviewed by IMZ's VP of Corporate Development, Nick Appleyard for mineral resources, and IMZ's VP Special Projects, Alan Matthews for mineral reserves, both Qualified Persons, as defined by National Instrument 43-101.

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, also partnered with Hochschild. Inmaculada is scheduled to be in production by December 2013 and produce approximately 124,000 ounces of gold and 4.2 million ounces of silver annually on a 100% project basis.

IMZ also holds 100% ownership interests in development-stage gold projects in Nevada (Goldfield and Converse), 100% or majority interests in development-stage gold projects in Ecuador (Rio Blanco and Gaby) and a 3% net smelter return royalty from Barrick's Ruby Hill open-pit gold mine in Nevada, which produced approximately 128,000 gold ounces in 2011 and has published reserves of approximately 1.0 million ounces of gold.

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

All dollar amounts refer to United States Dollars.

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, 2011, 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.

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

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