SCOTTSDALE, AZ, Dec 18, 2008 (MARKET WIRE via COMTEX) -- International Minerals Corporation (CA:IMZ) (SWX: IMZ) ("the Company") reports a calendar year-end summary of its corporate and project activities during 2008 and its business plans for calendar year 2009.
Corporate
-- The Company's share price, like that of most resource companies,
has not performed well in 2008 due primarily to prevailing adverse
market conditions not only in the natural resources sector but also
in the general financial market. IMZ's current share price is
essentially at the same level as five years ago.
-- Management believes that the Company's accomplishments of the past
year (especially at the Pallancata underground silver-gold mine in
Peru) combined with our future plans will remedy this situation and
IMZ's share price should recover in 2009 together with a likely
resurgence in metal prices.
-- In terms of financial health, the Company is in the enviable
position of having a strong balance sheet with cash and short-term
investments of over US$50 million at calendar 2008 year end, with
expected cash dividends commencing in late 2009 from the 40%-owned
Pallancata Mine.
-- In mid-October 2008, IMZ instituted a share repurchase program
because the Board believed that the market price of the Company did
not fully reflect the underlying value of the Company's business
and its future business prospects. An update on the share
repurchase program will be provided in the Company's second fiscal
quarter financial information for the period ending
December 31, 2008.
A brief update on the Company's key projects is provided below:
Pallancata Silver-Gold Mine, Peru
-- Owned 40% by IMZ and 60% by the mine operator, Hochschild
Mining plc.
-- Pallancata has become one of the success stories in the mining
industry in 2008 and is now the number-one primary silver mine
in Peru in terms of silver reserves.
-- Proven and probable reserve estimates in August 2008 were
approximately 80 million ounces of silver equivalent (using a
75:1 silver:gold ratio) contained within 5.8 million tonnes at
329 g/t silver and 1.2 g/t gold in proven and probable reserves.
See IMZ news release dated August 25, 2008 for further details.
-- Production (100% project basis):
- From start-up (September 2007) to September 30, 2008 almost
3 million ounces of silver and over 10,000 ounces of gold have
been produced.
- For calendar year 2008, production is expected to reach
approximately 4.5 million ounces of silver and 18,000 ounces
of gold.
- In 2009, Pallancata should become one of the top-10 largest
primary silver mines in the world, producing an expected 6 to
7 million ounces of silver annually.
-- Total cash costs, including the government royalty, are currently
under US$6.00 per ounce of silver net of by-product gold credits.
Currently, direct mine site costs (included in the US$6.00 cash
cost) are approximately US$3.15 per ounce (assuming only mining,
processing and mine G&A costs).
-- IMZ's net earnings from the Pallancata Mine to September 30, 2008
are approximately US$3.8 million.
-- Because all cash flow has been required for funding the aggressive
capital expansion program at the Pallancata Mine, to date there
have been no cash dividends distributed to the joint venture
partners. Cash dividends are expected to commence, however, in the
final quarter of calendar year 2009, dependent on metal prices and
ongoing capital requirements.
Rio Blanco and Gaby Gold Projects, Ecuador
-- It has been a difficult year for the mining/exploration sector in
Ecuador.
-- The market awaits the expiry of the mining mandate (that suspended
exploration and mining activities in April) and approval of the new
mining law in January 2009. Normalization of exploration/mining
activities likely will take several months longer while the detailed
regulations for the mining law are prepared and approved.
-- The negotiation of project-specific mining contracts (covering
issues such as income/windfall taxes and royalty payments) for the
more advanced projects (such as IMZ's Rio Blanco, Kinross' Fruta
del Norte, IAMGOLD's Quimsacocha and Corriente's Mirador projects)
are expected to take up to an additional six months to negotiate
with the government.
-- In calendar year 2009, IMZ does not expect to spend significant
funds in Ecuador at the Rio Blanco underground gold-silver project
and the Gaby open-pit gold project and has already reduced its
workforce accordingly. The Company is, however, maintaining its
significant in-country infrastructure and its commitment to
developing its Ecuadorian projects.
-- IMZ has previously completed much of the environmental permitting
process for the proposed development of a mining operation at Rio
Blanco. Final permitting approval is expected by the end of 2009,
with construction (subject to required additional financing)
starting in 2010.
-- In February 2008, the Company completed a preliminary feasibility
report at Gaby, which was not positive at US$650 per ounce gold
price but is currently being optimized for higher tonnage
production. Results of the optimization program will be announced
in the first quarter of 2009.
New Acquisitions
-- In the current market there are significant opportunities for IMZ
to acquire gold-silver companies and/or projects that are in or
near production at low acquisition costs that have not been seen
in the industry for the past 20 years. IMZ is well-positioned with
its cash resources and strong technical team to take advantage of
this situation.
-- IMZ's preference is to seek these opportunities in the Americas,
especially in South America in order to leverage off of IMZ's
considerable technical and corporate expertise from over 15 years
of exploration and development of projects in that region.
-- The Company has evaluated at least 25 companies/projects in 2008,
using its experienced acquisition team, and management is confident
that IMZ will achieve at least one major acquisition during the
coming year.
The technical information in this news release was reviewed by IMZ's Qualified Person, Nick Appleyard, Technical Manager.
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.
For additional information, contact:
Wendy Yang
Tel: (303) 357-4863
Internet Site: http://www.intlminerals.com
SOURCE: International Minerals Corporation
http://www.intlminerals.com
Copyright 2008 Market Wire, All rights reserved.
No comments:
Post a Comment