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International Minerals Corporation (TSX: IMZ) (SWISS: IMZ) reports updated mineral reserve and resource estimates for the Pallancata silver mine, Peru, jointly owned by IMZ (40% interest) and Hochschild Mining plc (“Hochschild”, 60% interest) based on information supplied by Hochschild, the mine operator, as of 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):
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):
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):
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 |
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).
