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International Minerals Reports Operating Achievements and


International Minerals Reports Operating Achievements and Financial Results for First Fiscal Quarter Ended September 30, 2012

SCOTTSDALE, AZ -- (Marketwire) -- 11/14/12 -- International Minerals Corporation (TSX: IMZ) (SWISS: IMZ) ("Company" or "IMZ") is pleased to report its operating achievements and financial results for the first fiscal quarter ended September 30, 2012.

All dollar amounts in this news release are reported in US Dollars, unless otherwise noted.

Significant Achievements for the First Fiscal Quarter Ended September 30, 2012 (the "Current Quarter"):


 
--  The Company received a $6.0 million cash distribution from the
    Pallancata Mine in July 2012, bringing the Company's 40%-share
    (Hochschild Mining plc "Hochschild" 60%-owner and operator) of
    cumulative cash distributions from Pallancata to $115.7 million since
    August 2009. The Company has also been advised by the Suyamarca Board
    of Directors that it should expect to receive a further cash
    distribution of $4.0 million from Pallancata in December 2012.
    
    
--  At the 40%-owned Inmaculada development project also in Peru
    (Hochschild 60%-owner and operator), development is progressing on
    schedule and Hochschild has completed its $100 million contractual
    development cost commitment. In September 2012, the Peruvian
    government approved the Environmental Impact Study for Inmaculada,
    achieving a critical milestone in the project's development.
    
    
--  At the 100%-owned Goldfield property in Nevada, the Company has
    engaged the services of M3 Engineering and Technology Corporation
    ("M3") of Tucson, Arizona to manage the Engineering, Procurement and
    Construction Management ("EPCM") activities relating to the design and
    construction of the Gemfield project heap leach gold mine. M3 has
    commenced the detailed design activities for this project. SRK
    Consulting of Reno Nevada has been contracted to complete the project
    Plan of Operations ("PoO") which will be used in the preparation of
    the Environment Impact Statement and permitting. The PoO is expected
    to be filed with the US Bureau of Land Management ("BLM") in December
    of 2012. Permitting is expected to commence in the first calendar
    quarter of 2013 and is expected to take approximately 18 months from
    approval of the PoO.
    
    
--  Also at the Gemfield project, the Company continues with on-going
    process optimization studies and step-out drilling in the recently
    discovered Gemfield Southeast area. In addition, results of the recent
    metallurgical test work have illustrated that a larger crush size
    could possibly allow for a 25% increase in plant throughput (to 7,500
    tpd) with no significant decrease in recoveries. This could mean that
    estimated processing operating costs may be reduced by 11% from $6.36
    per tonne to $5.65 per tonne and G&A costs may be reduced by 20%
    from $2.92 per tonne to $2.34 per tonne; a combined potential
    reduction of approximately 14% in total operating costs. Additional
    metallurgical testwork, however, will be required to confirm the
    recoveries from the larger crush size.

Financial Performance for the First Fiscal Quarter Ended September 30, 2012:

The Company:


 
--  Reported net income from continuing operations after tax for the first
    fiscal quarter ended September 30, 2012 of $10.7 million or $0.09 per
    share compared to net income from continuing operations after tax of
    $14.5 million or $0.12 per share for the fiscal quarter ended
    September 30, 2011 (the "Prior Year's Quarter), reflecting in both
    periods the earnings from the Pallancata Mine.
    
    
--  Reported cash flow from continuing operations of $6.0 million for the
    Current Quarter compared to $18.2 million for Prior Year's Quarter,
    with the change representing the difference in the cash distributions
    from the Pallancata Mine during the respective quarters.
    
    
--  Reported a net loss from discontinued operations after tax of $1.1
    million for the Current Quarter compared to net income from
    discontinued operations after tax of $0.7 million for the Prior Year's
    Quarter. The loss from discontinued operations in the Current Quarter
    represents on-going maintenance costs in Ecuador while the
    contribution to income in the Prior Year's Quarter was income from the
    Ruby Hill mine royalty.
    
    
--  Reported net and comprehensive income after tax of $9.6 million or
    $0.08 per share, for the Current Quarter compared to net and
    comprehensive income of $15.2 million or $0.13 per share, for the
    Prior Year's Quarter. The most significant reason for the decline in
    earnings was because of a reduction in earnings from the Pallancata
    Mine that was a result of lower metal production and a decline in the
    prices of gold and silver.
    
    
--  At the Pallancata Mine:
    
    

 
i.  The Company's 40% share of the equity income from the Pallancata Mine
    was approximately $10.7 million for the Current Quarter compared to
    $15.1 million for the Prior Year's Quarter. Cash distributions paid to
    the Company for the Current Quarter totaled $6.0 million compared to $16
    million in the Prior Year's Quarter; 
    
    
ii. Production for the Current Quarter (on a 100% basis) was approximately
    1.9 million ounces of silver (Prior Year's Quarter: 2.3 million ounces)
    and 6,814 ounces of gold (Prior Year's Quarter: 9,370 ounces). The
    Company's 40% share was approximately 757,310 ounces of silver (Prior
    Year's Quarter: 916,322 ounces) and 2,726 ounces of gold (Prior Year's
    Quarter: 3,748 ounces). The reasons for the decrease in gold and silver
    production were lower ore grades and metallurgical recoveries compared
    to the Prior Year's Quarter. 
    
    
iii. For the Current Quarter, direct site cash costs were $4.69 per ounce of
    silver produced after gold by-product credit (Prior Year's Quarter:
    $1.01 per ounce) and total cash costs after gold by-product credit (as
    defined by the Gold Institute) were $8.49 per ounce of silver produced
    (Prior Year's Quarter: $5.44 per ounce). For the Current Quarter
    compared to the Prior Year's Quarter total cash operating costs, before
    by-product credit, decreased by 3% and, therefore, both direct site and
    total cash costs per ounce reported increased because of lower by-
    product credits and a decrease in silver production.

Operating Statistics for the Pallancata Mine (100% project basis).

The table below reports key operating and cost statistics for the Pallancata Mine for the fiscal quarters ended September 30, 2012 and 2011 and for the fiscal years ended June 30, 2012 and 2011.


 
                                                                            
----------------------------------------------------------------------------
                                   Quarter    Quarter    Fiscal     Fiscal  
                                    Ended      Ended   Year Ended Year Ended
                                 09/30/2012 09/30/2011 06/30/2012 06/30/2011
----------------------------------------------------------------------------
Ore mined (tonnes)                  276,459    269,273  1,041,857  1,069,428
----------------------------------------------------------------------------
Ore processed (tonnes)              277,092    268,673  1,090,033  1,063,008
----------------------------------------------------------------------------
Head grade- Ag (grams/tonne)            257        313        280        324
----------------------------------------------------------------------------
Head grade- Au (grams/tonne)            1.2        1.4        1.2        1.4
----------------------------------------------------------------------------
Concentrate produced (tonnes)         2,073      2,266      8,380      8,622
----------------------------------------------------------------------------
Silver production (ounces)        1,893,274  2,290,805  8,185,244  9,461,573
----------------------------------------------------------------------------
Gold production (ounces)              6,814      9,370     29,689     34,517
----------------------------------------------------------------------------
Silver sold ( ounces)             1,651,900  1,935,300  8,127,900  9,531,300
----------------------------------------------------------------------------
Gold sold (ounces)                    5,870      8,017     28,766     32,824
----------------------------------------------------------------------------
IMZ direct site costs (US$)            4.69       1.01       3.31       2.21
----------------------------------------------------------------------------
IMZ total cash costs (US$)             8.49       5.44       7.37       6.04
----------------------------------------------------------------------------

Notes:

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. Numbers for gold and silver ounces in the sold category have been rounded. 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 (see notes 5 and 6 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. The cost per ounce is net of by-product credit, with by-product gold revenue offsetting operating costs. 6. Total cash costs, using the Gold Institute definition, comprise: mine operating costs, mined ore inventory adjustment, toll processing costs, mine general and administrative costs, Hochschild management fee, concentrate transportation and smelting costs, and government royalty (currently approximately 3% of gross revenue for Pallancata). The cost per ounce is net of by-product credit, with by-product gold revenue offsetting operating costs.

Company Outlook

During the 2013 fiscal year, the Company's exploration and development efforts are expected to focus primarily on:


 
--  At the 40%-ownedPallancata Silver Mine in Peru:
    
    
--  Working with Hochschild to continue production at the 3,000 tpd mining
    rate to produce approximately 7.8 million ounces of silver and 32,000
    ounces of gold, in calendar 2012 (the Company's estimate on a 100%
    project basis) and increasing mineral resources and reserves to extend
    the existing mine life (approximately 4.0 years based on current
    reserves).
    
    
--  At the 40%-ownedInmaculada gold-silver project, also in Peru:
    
    
--  Working with Hochschild to continue with mine development, permitting
    and construction with production targeted to commence prior to the end
    of calendar year 2013, subject to the timely receipt of final
    construction permits, and continuing with an aggressive exploration
    program in order to expand reserves and resources.
    
    
--  At the 100%-ownedGoldfield property in Nevada: advancing the Gemfield
    project to construction in 2014, following the completion of
    permitting, with the goal of potential production in mid-calendar year
    2015.
    
    
--  At the 100%-ownedConverse gold project, also in Nevada: continuing
    with additional technical studies depending upon the results of
    on-going metallurgical testwork.
    
    
--  Finalize the sale of the 100%-owned Rio Blanco gold-silver project and
    the approximately 60%-owned Gaby project in Ecuador.
    
    
--  Continuing to seek investment opportunities in precious metals
    properties in low political risk jurisdictions in the Americas, where
    the Company believes it can increase the value of such properties
    using its exploration, development, financing and administrative
    abilities to enhance value.

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.

The Company's Financial Statements and Management's Discussion and Analysis (MD&A) are posted on the Company's website at: www.intlminerals.com/investors/financial-reports or at www.sedar.com under the Company's name.

Cautionary Statement:

The Gold Institute calculation of Direct Site Costs and Total Cash Costs are non-IFRS financial measures, which Company management believes are 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. Forward-looking statements in this release include statements regarding, production expectations, metallurgical recoveries and operating costs, drilling and development programs on the Company's projects, timing relating to the completion of the sale of Rio Blanco and Gaby projects, and timing of completion of economic studies, construction and production, construction and production permits. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties such as: risks relating to obtaining mining and environmental permits; delays in completing economic studies mining and development risks; the uncertainty in estimating and then obtaining the fair market value of the Rio Blanco and Gaby properties, financing risks; risk of commodity price fluctuations; the uncertainty in estimating metallurgical recoveries and operating costs, political and regulatory risks; and other risks and uncertainties detailed in the Company's Annual Information Form for the year ended June 30, 2012, 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.


 
                                                                            
INTERNATIONAL MINERALS CORPORATION                              
            
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION             
(Expressed in United States dollars) (Unaudited)                            
                                                                            
                                                 September 30,    June 30,  
                                                      2012          2012    
                                                 ------------- -------------
ASSETS                                                                      
                                                                            
Current                                                                     
  Cash and equivalents                           $  83,171,095 $  81,243,474
  Receivables                                           29,364        79,105
  Due from related party                                16,849     6,210,377
  Prepaid expenses and deposits                         42,963        35,373
  Investments                                        2,162,496     2,557,195
  Discontinued operations - Ecuador resource                                
   properties                                       39,925,185    39,976,344
                                                 ------------- -------------
                                                                            
    Current assets                                 125,347,952   130,101,868
Non-current                                                                 
  Property, plant and equipment                     28,001,043       359,724
  Investment in associate                          156,828,036   133,146,660
  Investment in resource properties                 48,739,759    72,401,093
  Reclamation bonds                                    210,100       185,100
                                                 ------------- -------------
                                                                            
    Non-current assets                             233,778,938   206,092,577
                                                 ------------- -------------
                                                                            
Total assets                                     $ 359,126,890 $ 336,194,445
                                                 ============= =============
                                                                            
LIABILITIES AND SHAREHOLDERS' EQUITY                                        
                                                                            
Current                                                                     
  Accounts payable                               $   1,245,953 $   1,397,461
  Accrued severance and payroll costs                  745,547       736,500
  Due to related parties                                35,429        17,649
  Discontinued operations - mine royalty               113,152       113,152
  Discontinued operations - Ecuador resource                                
   properties                                        1,094,478     1,103,150
                                                 ------------- -------------
                                                                            
    Current liabilities                              3,234,559     3,367,912
                                                                            
Non-current                                                                 
  Deferred income tax liability                      8,160,000     8,160,000
                                                 ------------- -------------
                                                                            
    Non-current liabilities                          8,160,000     8,160,000
                                                 ------------- -------------
                                                                            
Shareholders' equity                                                        
  Capital stock                                    240,817,227   240,784,904
  Reserves                                           5,102,397     4,869,396
  Equity gain on carried interest                   29,962,332    16,782,196
  Retained earnings                                 71,850,375    62,230,037
                                                 ------------- -------------
                                                                            
    Capital and reserves attributable to the                                
     shareholders of the Company                   347,732,331   324,666,533
                                                 ------------- -------------
                                                                            
Total liabilities and shareholders' equity       $ 359,126,890 $ 336,194,445
                                                 ============= =============

Nature and continuance of operations


 
                                                                            
Approved on November 9, 2012 by the Directors:                              
                                                                            
     "Stephen J. Kay"    Director          "W. Michael Smith"   Director    
-------------------------              -------------------------            
      Stephen J. Kay                        W. Michael Smith                

The accompanying notes are an integral part of these consolidated financial statements and can be found on the Company's website at: http://www.intlminerals.com/investors/financial-reports.


 
                                                                            
                                                                            
INTERNATIONAL MINERALS CORPORATION                                          
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME           
(Expressed in United States dollars) (Unaudited)                            
                                                                            
                                                    2012           2011     
                                               -------------  ------------- 
                                                                            
Revenue                                        $           -  $           - 
                                                                            
Income from associate                             10,681,607     15,089,200 
                                                                            
Other income                                       1,547,592      1,265,048 
                                               -------------  ------------- 
                                                                            
    Total income                                  12,229,199     16,354,248 
                              
                 -------------  ------------- 
                                                                            
Expenses                                                                    
  Amortization and depreciation                     (195,727)      (191,958)
  Salaries and employee benefits                    (590,099)      (391,165)
  Administrative costs                              (514,148)      (580,080)
  Stock-based compensation                          (254,579)       (93,699)
  Financing expense                                        -       (561,808)
                                               -------------  ------------- 
                                                                            
    Total expenses                                (1,554,553)    (1,818,710)
                                               -------------  ------------- 
                                                                            
Income from continuing operations before taxes    10,674,646     14,535,538 
                                                                            
Income taxes                                               -              - 
                                               -------------  ------------- 
                                                                            
Net income from continuing operations after                                 
 taxes                                            10,674,646     14,535,538 
                                               -------------  ------------- 
                                                                            
Discontinued operations net of taxes                                        
  Income from mine royalty                                 -        671,617 
  Costs of discontinued operations - Ecuador                                
   resource properties                            (1,061,890)             - 
                                               -------------  ------------- 
                                                                            
  Income (loss) from discontinued operations      (1,061,890)       671,617 
                                               -------------  ------------- 
                                                                            
Net income and comprehensive income after                                   
 taxes                                         $   9,612,756  $  15,207,155 
                                               =============  ============= 
                                                                            
Net income from continuing operations after                                 
 taxes per common share                                                     
  Basic                                        $        0.09  $        0.12 
  Diluted                                      $        0.09  $        0.11 
Income/(loss) from discontinued operations                                  
 after taxes per common share                                               
  Basic                                        $       (0.01) $        0.01 
  Diluted                                      $       (0.01) $        0.01 
Net income after taxes per common share                                     
  Basic                                        $        0.08  $        0.13 
  Diluted                                      $        0.08  $        0.12 
                                               =============  ============= 
                                                                            
   Weighted average number of common shares                                 
              outstanding - basic                117,585,887    120,387,368 
   Weighted average number of common shares                                 
             outstanding - diluted               117,913,846    127,059,865 
                                               =============  ============= 

The accompanying notes are an integral part of these consolidated financial statements and can be found on the Company's website at: http://www.intlminerals.com/investors/financial-reports.


 
                                                                            
                                                                            
INTERNATIONAL MINERALS CORPORATION                                          
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS                     
(Expressed in United States dollars) (Unaudited)                            
                                                                            
                                                    2012           2011     
                                               -------------  ------------- 
CASH FLOWS FROM CONTINUING OPERATIONS                                       
  Net income for the year from continuing                                   
   operations                                  $  10,674,646  $  14,535,538 
  Adjustments to net income:                                                
    Amortization and depreciation                    195,727        191,958 
    Stock-based compensation                         254,579         93,699 
    Unrealized foreign exchange gain                 (66,197)    (2,071,016)
    Realized gain on sale of investments            (200,456)             - 
    Unrealized (gain) loss on investments           (453,944)       693,518 
    Financing expense                                      -        561,808 
    Equity income from investment in associate   (10,681,607)   (15,089,200)
    Interest income                                 (101,084)      (154,857)
    Cash distributions received from                                        
     investment in associate                       6,000,000     16,000,000 
  Changes in non-cash working capital items:                                
    Decrease in receivables                           52,508      3,299,514 
    Increase in prepaid expenses and deposits         (7,590)       (85,360)
    Increase in accounts payable                     225,260        226,080 
    Decrease in due from related party                                      
     (excluding cash distribution)                   193,528              - 
    (Decrease) increase in accrued severance                                
     and payroll costs                               (54,772)         1,919 
    Increase (decrease) in due to related                                   
     party                                            17,780        (37,458)
                                               -------------  ------------- 
  Net cash flow from continuing operations                                  
   provided by operating activities                6,048,378     18,166,143 
                                                                            
    Discontinued operations - mine royalty                 -      1,698,095 
    Discontinued operations - Ecuador resource                              
     properties                                   (1,019,403)        (3,690)
                                               -------------  ------------- 
                                                                            
  Net cash flow used in discontinued                                        
   operations                                     (1,019,403)     1,694,405 
                                               -------------  ------------- 
                                                                            
  Net cash provided by operating activities        5,028,975     19,860,548 
                                               -------------  ------------- 
                                                                            
CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES                              
  Proceeds from the issuance of common shares         18,327        307,388 
                                               -------------  ------------- 
                                                                            
  Net cash flow provided by financing                                       
   activities                                         18,327        307,388 
                                               -------------  ------------- 
                                                                            
CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES                              
  Resource property expenditures                  (4,293,249)    (4,291,335)
  Purchase of investments                                  -       (157,165)
  Sale of investments                              1,115,193              - 
  Interest received                                   98,317        100,796 
  Purchase of property and equipment                 (14,942)       (30,320)
  Reclamation bonds                                  (25,000)        
     - 
  Discontinued operations - Ecuador resource                                
   properties                                              -     (4,037,075)
                                               -------------  ------------- 
                                                                            
  Net cash flow used in investing activities      (3,119,681)    (8,415,099)
                                               -------------  ------------- 
                                                                            
Change in cash and equivalents for the period      1,927,621     11,752,837 
Cash and equivalents, beginning of period         81,243,474     85,839,236 
                                               -------------  ------------- 
                                                                            
Cash and equivalents, end of period            $  83,171,095  $  97,592,073 
                                               =============  ============= 

The accompanying notes are an integral part of these consolidated financial statements and can be found on the Company's website at: http://www.intlminerals.com/investors/financial-reports.

For additional information, contact:

In North America: Paul Durham VP Corporate Relations Tel: +1 203-940-2538

Renmark Financial Communications: Christine Stewart +1-416-644-2020 cstewart@renmarkfinancial.com or Robert Thaemlitz +1-514-939-3989 rthaemlitz@renmarkfinancial.com

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

Or email us at: Information@intlminerals.com Internet Site: http://www.intlminerals.com

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