International Minerals Corp.
International Minerals Announces Positive Feasibility Study at Goldfield Gold Project, Nevada. Proven and Probable Reserve Estimate of 511,000 Ounces Gold.
International Minerals Corp. / Key word(s): Research Update 18.07.2012 00:03 Release of an ad hoc announcement pursuant to Art. 53 KR --------------------------------------------------------------------------- NEWS RELEASE International Minerals Announces Positive Feasibility Study at Goldfield Gold Project, Nevada. Proven and Probable Reserve Estimate of 511,000 Ounces Gold. Scottsdale, Arizona, July 17, 2012 - International Minerals Corporation (Toronto and Swiss stock exchanges: 'IMZ') announces positive results from an independent feasibility study on the Gemfield gold deposit at its 100%-owned Goldfield property in Nevada. At a base-case gold price of $1,350 per ounce ('/oz') and a projected 6,000 tonnes per day ('tpd') heap leach processing throughput, an open-pit mine on the Gemfield deposit at Goldfield could return a pre-tax net present value ('NPV') at a 5% discount rate of approximately $102 million and an internal rate of return ('IRR') of 22% based on initial estimated capital cost of $133 million. Basic engineering is scheduled to start in the fourth quarter of 2012 and, subject to ongoing permitting, financing and construction, production is estimated to commence in mid-2015. Proven and Probable mineral reserves for Gemfield are estimated at 14.3 million tonnes ('Mt') at an average grade of 1.1 grams per tonne ('g/t') gold, containing 511,000 ounces of gold, resulting in a mine-life of approximately 6.5 years. The Goldfield property currently hosts three separate gold deposits (Gemfield, Goldfield Main and McMahon Ridge) with total Measured and Indicated resource estimates of 1.2 million ounces gold contained in 31.1 million tonnes at an average grade of 1.2 g/t, including 574,000 ounces of gold contained in 17.0 million tonnes at a grade of 1.0 g/t at the Gemfield deposit (see table 4). The mineral resource is inclusive of the mineral reserve. The Goldfield Main and McMahon Ridge deposits do not form part of the current feasibility study as they remain subject to further drilling and metallurgical testwork. Commenting on the results of the study, Steve Kay, President and CEO of IMZ, said 'The completion of the feasibility study for the Gemfield deposit is not only the first major step in the future development of the overall Goldfield project, but it is also an important milestone in IMZ's goal of becoming a stand-alone mine operator to complement silver and gold production from its 40%-owned Peruvian operations.' Feasibility Study Details The Gemfield feasibility study was overseen by the independent engineering firm, Micon International Limited of Toronto, Canada. Details of the study are shown below in Table 1. Table 1. Gemfield - Feasibility Study Data (all in US Dollars) Table 2. Gemfield - Pre-tax Sensitivity Analysis to Gold Price (base case in bold) Mining Development of the Gemfield deposit will utilize standard open pit technology to create an ultimate open pit having approximate dimensions of 850 meters ('m') north-south by 640m east-west and a maximum depth of 170m. The open pit will be excavated using four distinct mining phases designed to approximate the optimal extraction sequence. Ore and waste will be drilled and blasted on 6m high benches with loading and hauling accomplished using 6.5 cubic meter front-end loaders and 40 tonne ('t') capacity haul trucks. Waste material has largely been characterized as benign in terms of acid rock drainage and will be stored immediately adjacent to and east of the open pit. A stockpiling strategy will be employed to process higher value material ahead of lower value, in addition to smoothing mine production and providing backup crusher feed. The average life-of-mine strip ratio is approximately 2.1:1 (waste:ore), with inter-ramp slope angles ranging from 40 to 45 degrees. Processing The process flowsheet includes 3-stage crushing to achieve 100% passing 12.7mm (0.5 inch) and cyanide heap leaching followed by carbon adsorption/stripping, electrowinning and smelting to produce gold/silver doré bars for shipment to a refinery. Metallurgical testwork by previous owners, combined with IMZ's testwork based on samples from the current drill program, form the basis for the process design criteria. IMZ column test results from the Gemfield deposit oxide zone have returned gold recoveries between 72 and 96% at 100% passing 12.7mm crush size and at the range of gold head grades typically anticipated from the pit. Testwork on mineralized material from below the oxide/sulfide boundary indicates that the sulfide mineralization is refractory to cyanidation and has been assigned zero recovery. A recovery model for the oxide mineralization has resulted in an estimated average life-of-mine recovery of 84%. Environmental and Permitting Work continues on the Environmental Baseline Study ('EBS') and it is on schedule for submission by the end of 2012. Drafting of the Plan of Operations ('PoO') has commenced and will be submitted at the same time as the EBS. The EBS and PoO submissions will cover the mine, process facilities, ancillary infrastructure and the re-alignment of US Highway 95, which crosses the Gemfield deposit. Estimated costs of re-alignment of the highway are $19 million and are included in the initial capital costs of the project. Following acceptance of the EBS and PoO, an Environmental Impact Statement ('EIS') process will commence and the estimated timeline for approval is 15 to 18 months. Permitting will start shortly after the EIS process commences and will run in parallel with the EIS process. Updated Mineral Reserve and Resource Estimates Mineral Reserve Estimate - Gemfield Deposit The mineral reserve estimate for the Gemfield deposit is shown in Table 3 and was calculated by Dayan Anderson MMSA, of Micon International Limited, with an Effective Date of July 17th, 2012. This is the first mineral reserve estimate for the Gemfield deposit. Table 3. Gemfield Deposit - Estimated Mineral Reserves at a gold price of $1,300 per ounce and an average cut-off grade of 0.3 g/t Gold. There are currently no mineral reserve estimates for the McMahon Ridge and Goldfield Main deposits. Mineral Resource Estimates The Goldfield property currently hosts three separate gold deposits (Gemfield, Goldfield Main and McMahon Ridge). Total estimated Measured and Indicated resources are 1.2 million ounces gold contained in 31.1 million tonnes at an average grade of 1.2 g/t of which the Gemfield deposit contains 574,000 ounces of gold within 17.0 million tonnes at an average grade of 1.0 g/t. See Table 4. Updated mineral resource estimates for the Gemfield and McMahon Ridge deposits were calculated by R. Mohan Srivastava (P.Geo), an independent consultant and qualified person, with an effective date of July 17th, 2012. The Goldfield Main deposit mineral resource estimate was previously calculated by R. Mohan Srivastava with an effective date of February 1st, 2011 (see press release dated February 1, 2011). Table 4. Goldfield Project - Estimated Mineral Resources. The resource estimations were conducted using all drill assay data available as of May 2012, representing a total of 532 core and reverse circulation ('RC') drill-holes totaling approximately 76,500m for Gemfield and 317 core and RC drill-holes totaling approximately 38,900m for McMahon Ridge. For Gemfield, the updated resource estimate represents a 10% increase in Measured and Indicated tonnage and a 6% increase in the contained ounces of gold compared to the previously-published resource estimate (July 12 2005). For McMahon Ridge, the updated resource estimate represents a 25% decrease in Measured and Indicated tonnage and a 16% decrease in the contained ounces of gold from the previously-published resource estimate (also July 12 2005). The increase in mineral resources at Gemfield is mostly due to additional drilling, whilst at McMahon Ridge the reduction can be attributed to a change in reporting cut-off from 0.27 g/t to 0.4 g/t as well as a limited amount of new drilling. A new mineral resource was not estimated for Goldfield Main. Gemfield Deposit - Resource Estimation Methodology The ordinary kriging method utilized a search neighbourhood that considered only those nearby drill-hole samples that fell within a single mineralized horizon whose top and bottom was interpreted on east-west cross-sections and connected section-to-section to create triangulated surfaces that delineate the top and bottom of the mineralized zone. The search neighbourhood is oriented parallel to the mineralized zone, following its undulations and has a radius of 53m in the N25 E direction, 30m in the N65 W direction and 6m in the vertical direction, equal to the ranges of the variogram. An octant search was used to limit the effects of sample clustering; within each octant, only the closest four samples were retained for estimation. A block size of 3m×3m×3m was used for estimation; these were re-blocked to 6m×6m×6m for inventorying and reporting the mineral resource. Tonnages were calculated for each block using tonnage factors that vary according to rock-type and alteration. The estimation of grade used the actual capped drill-hole assays; no compositing was performed. Once the ordinary kriging weights had been calculated, these weights were multiplied by the assay length and then re-normalized to sum to one. This technique ensures that variable sample length in drill core samples is correctly accounted for in grade estimation. Resource classification was based on three criteria: 1) distance to the nearest assay sample, 2) number of octants with data, and 3) number of different drill-holes. Below are the principal criteria for each resource category: - Measured Resources have blocks within 1/3 the variogram range of a drill-hole sample from at least four different drill holes in at least four octants. - Indicated Resources have blocks that are within 2/3 the variogram range of a drill-hole sample from at least two drill holes in at least four octants. - Inferred resources have blocks that are within the variogram range of a drill-hole sample. Below the oxide/sulfide boundary, no grade estimates were calculated; all classified mineral resources lie in the oxide zone. McMahon Ridge Deposit - Resource Estimation Methodology The McMahon Ridge deposit is not considered part of the Gemfield feasibility study. However the mineral resource estimate model for this deposit has been updated to ensure consistent reporting between the known deposits on the property. Ordinary kriging was used to estimate the proportions of two populations; one is the host of the continuous mineralization and the other is the host of erratic and discontinuous mineralization. For each population, the gold grade was estimated using nearby assays from the same population; average grade was then calculated by tonnage-weighting the grades of the two populations within each 3m×3m×3m block. The search neighbourhood was oriented parallel to the locally-varying direction of maximum continuity extracted from geological cross-sections. It had a radius of 40m in the strike and down-dip directions, and 5m perpendicular to the tabular mineralization; these are equal to the ranges of the variogram. An octant search was used to limit the effects of sample clustering; within each octant, only the closest four samples were retained for estimation. A block size of 3m×3m×3m was used for estimation; these were re-blocked to 6×6×6m for inventorying and reporting the mineral resource. Tonnage factors varied according to rock-type and alteration. The estimation of grade used drill-hole assays, capped at 100 g/t in the population that hosts continuous mineralization and 10 g/t in the erratic and discontinuous mineralization; no compositing was performed. Once the ordinary kriging weights had been calculated, these weights were multiplied by the assay length and then re-normalized to sum to one. This technique ensures that variable sample length in drill core samples is correctly accounted for in grade estimation. Tonnage and metal content in historical shafts and production stopes were removed from the block model prior to calculating the mineral resource estimate. Resource classification was based on three criteria: 1) Distance to the nearest assay sample, 2) Number of octants with data, and 3) Number of different drill-holes. Below are the principal criteria for each resource category: - Indicated Resources have blocks that are within 2/3 the variogram range of a drill-hole sample from at least two drill holes in at least four octants. - Inferred resources have blocks that are within the variogram range of a drill-hole sample. General The technical information reported in this news release was reviewed by IMZ's Qualified Person, VP Corporate Development, Nick Appleyard. A National Instrument (NI) 43-101 compliant Technical Report, completed by the independent firm, Micon International Limited, will be filed by IMZ on SEDAR within 45 days of the date of this news release. About International Minerals International Minerals is a silver-gold producer, explorer and developer with silver-gold production from its 40%-owned Pallancata Mine in Peru, which is operated by Hochschild. In 2011, Pallancata was the sixth largest primary silver mine in the world. Production at Pallancata in calendar year 2012 is estimated by IMZ to be 7.8 million ounces of silver and 32,000 ounces of gold (on a 100% project basis). IMZ also owns a 40% interest in the development-stage Inmaculada gold-silver project in Peru, which is scheduled to be in production by December 2013 and expected to produce approximately 124,000 ounces of gold and 4.2 million ounces of silver annually on a 100% project basis. In addition to Inmaculada, Pallancata and Goldfield, IMZ also holds 100% ownership interests in the advanced-stage Converse gold project in Nevada and variable ownership interests in gold projects in Ecuador (Rio Blanco 100% and Gaby ~60%). IMZ is listed on the Toronto Stock Exchange (since 1994) and the Swiss Stock Exchange (since 2002). For additional information, contact: In North America Paul Durham, Vice President Corporate Relations Tel: +1 203 883 8359 In Europe Oliver Holzer, Marketing Consultant Tel: +41 44 853 00 47 Or email us at: IR@intlminerals.com Internet Site: http://www.intlminerals.com Cautionary Statements: 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 capital and operating costs; economic returns; timing and significance of future cash flows and revenue from the project; timing and scale of production and processing; and resource and reserve estimates. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties such as: risks relating to estimates of production and processing rates; risks relating to estimates of mineral resources and reserves; risks relating to capital and operating 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 Annual Information Form for the year ended June 30, 2011, which is available at www.sedar.com under the Company's name. A number of measures reported above are non-IFRS (International Financial Reporting Standards) financial measures which include: direct site costs per tonne; direct site costs per ounce (with by-product credit): and total cash operating costs per ounce (with by-product credit). Management believes these items may be useful measures to analyze the economics of the Goldfield project, but readers of this news release should not rely on these non-IFRS measures in isolation. 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. 18.07.2012 News transmitted by EquityStory AG. The issuer is responsible for the contents of the release. EquityStory publishes regulatory releases, media releases on the capital market and press releases. The EquityStory Group distributes authentic and real-time financial news for over 1'300 listed companies. The Swiss news archive can be found at www.equitystory.ch/news --------------------------------------------------------------------------- Language: English Company: International Minerals Corp. 7950 East Acoma Street AZ 85260 Scottdale United States Phone: 001 480 483 9932 Fax: 001 480 483 9926 E-mail: IR@intlminerals.com Internet: www.intlminerals.com ISIN: CA4598751002 Swiss Security Number: 893760 Listed: Freiverkehr in Berlin, München; Open Market in Frankfurt; Toronto, SIX End of Announcement EquityStory News-Service ---------------------------------------------------------------------------
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