RNS Number : 8735X
International Consolidated Min. Inc
30 June 2008
FOR IMMEDIATE RELEASE
30 June 2008
International Consolidated Minerals Inc
("ICMI" or the "Company")
Audited results for the year ended to December 2007
International Consolidated Minerals Inc. (AIM: ICMI), the South American focused mineral exploration and development company, announces
its audited results for the year ended 31 December 2007.
Highlights
* Expanded and proving up the resource base revealing, at least 15 million tonnes of in-situ mineralization in addition to JORC
compliant resources of 7.8 million tonnes of Polymetallic Ore (Ag, Zn, Cu, & Pb).
* Commenced construction of a new mining camp and acquired new offices in Lima to better coordinate operations management
* Started construction of new mining infrastructure and access to the Riqueza deposit and to the Mantos mineralized zones.
* Strengthened the management team with the appointment of Alfonso Brazzini, former CFO of Compa Minas de Buenaventura (a gold and
silver producer in Peru).
* Significant investment in the mine's future development.
* Completed the refurbishment work on processing facilities including the mill and concentrator with some processing of tailings.
* Retained Credit Suisse as a financial adviser to assist in analysis of strategic options going forward.
* Environmental Impact Study approved by the Ministry for Energy and Mines for the development of a mill and concentrator.
Greg Smith CEO of ICM, commented:
"Last year's exploration programme has demonstrated the strong resource potential that Pachapaqui has to offer to the investors. ICM's
location next to the well established mining operations such as Antamina, Pierina, and Atacocha Milpo allows easier access to the markets
across the Pacific at a time when demand for the commodities we produce remains particularly strong. In the coming year we hope to
capitalize on a very favorable position we currently hold".
Enquiries:
International Consolidated Minerals
Greg Smith Chairman, CEO Tel: +44 (0)20 7808 4851
Pawan Sharma Executive Vice President - Corporate Tel: +44 (0)20 7808 4851
Affairs
Strand Partners Limited (Nominated Adviser)
Simon Raggett Tel: +44 (0)20 7409 3494
Warren Pearce Tel: +44 (0)20 7409 3494
Pelham Public Relations
Charles Vivian Tel: +44 (0)20 7743 6672
John McLeod Tel: +44 (0)20 7743 7442
ADDITIONAL INFORMATION ON INTERNATIONAL CONSOLIDATED MINERALS INC.
International Consolidated Minerals Inc (AIM: ICMI) was formed in 2005 to pursue mineral exploration, development and production with
its initial attention in Latin America. ICMI's strategy is to focus on high-quality mining assets at an advanced stage of development. In
early 2006, ICMI acquired the Pachapaqui mining property in central Peru which contains appreciable high grade zinc, lead, copper, silver
and gold mineral reserves and resources. The property consists of 32 mining concessions of 2,105 hectares and one beneficiation concession
of 65 hectares on which is located mining infrastructure and equipment, hydro-electrical generating stations, offices and accommodations,
and concentrating plant facilities. In 2007, while conducting upgrades of the facilities, ICMI embarked on a drilling and exploration
geology programme, initially in one area on the Pachapaqui property, from which the Company has had tremendous success and is confident of
proving up significant additional mineral reserves and resources. The Company intends to bring the Pachapaqui Mine into production in 2009. Further information is available from the Company's
website at: http://www.icmi-inc.com.
- END -
COMPANY REGISTRATION NUMBER: CD-160817
INTERNATIONAL CONSOLIDATED MINERALS INC
ANNUAL REPORT AND FINANCIAL STATEMENTS
For the year ended 31 December 2007
International Consolidated Minerals Inc
Highlights & Achievements to date
For the year ended 31 December 2007
International Consolidated Minerals Inc. (AIM: ICMI) is an independent exploration and development mining company focused on operations
and opportunities in Latin America with an initial focus on Peru.
International Consolidated Minerals Inc. ('ICMI' or the 'Company') manages and owns, through a wholly owned Peruvian subsidiary, 100% of
the Pachapaqui property, on which is situated the past-producing base metals (zinc, lead and copper) and precious metals (silver and gold)
mine located in the rich well-known Central Mineral Belt of Peru.
The Pachapaqui property (the 'Pachapaqui Property', 'Pachapaqui') consists of 32 Peruvian Mining and one Beneficiation Concessions
within a combined surface area of approximately 2,170 hectares, with JORC-standard reserves and resources, and, according to a Competent
Persons Report ('CPR') completed by CSA Consulting Ltd in 2006, exceptional exploration potential for 70 million tonnes of reserves which
would support a mine life of decades. Exploratory diamond drilling commenced during 2007 and by mid December 2007 had already confirmed at
least 15 million additional tonnes of in-situ mineralization in an initial exploration focus area which constitutes only 0.3% of the total
Pachapaqui Mining Concessions area. This initial focus area is just one of several high potential prospects and discoveries made during 2007
on the Pachapaqui Property. Further exploration activities to delineate more mineral resources and reserves, which the Company is very
confident exist, will continue on the property.
Sited on the Pachapaqui Property are existing mining and concentrating facilities which ICMI proposes to upgrade and bring into
production during 2009, at a mill feed rate of 1,500 tonnes per day ('tpd') producing three (zinc, lead and copper) concentrates containing
payable silver and gold. The Company also intends to begin the permitting process in mid 2008 for the construction of additional new
facilities with a proposed mill feed capacity of 6,700 tpd.
The Company expects to receive approval during 2008 for its environmental impact study ('EIS') to operate the Pachapaqui Mine at 1,500
tpd, having already passed through the public consultation process and satisfactorily addressing all issues.
International Consolidated Minerals Limited ('ICML') completed a reverse takeover of the Company (the 'RTO') (formerly known as Platinum
Diversified Mining Inc. ('PDM')) and readmitted to trading on the AIM of the London Stock Exchange on 14 September 2007. Following
readmission the Company changed its name to International Consolidated Minerals Inc.
International Consolidated Minerals Inc
Chairman & Chief Executive Officer's Statement
For the year ended 31 December 2007
Dear Shareholders
I am delighted to present International Consolidated Minerals Inc.'s Annual Report for the financial year ended 31 December 2007.
In line with our long term strategy of becoming a leading independent mining operator in Latin America, we remain focused on targeting
and developing advanced stage mining opportunities in the region. Peru's economic success has been largely supported by the significant
growth of its mining industry which now accounts for more than half of Peru's exports. Even so, Peru has tremendous as yet untapped mineral
resources offering much more opportunity. In addition, Peru is a stable democracy with sophisticated mining laws, infrastructure, logistics
and supplies support. Our initial focus is justifiably in Peru, and in particular on our exciting polymetallic Pachapaqui project.
Our Pachapaqui project is located in one of the most prolific mining belts of the world and hosts a major geological system itself.
Prior to our acquisition, there had been practically no systematic exploration conducted on the property and its potential was not
appreciated or even understood. In 2007, we commenced an aggressive exploration programme aimed at increasing Pachapaqui's reserve and
resource base and the Company's value. This program, though only yet in its initial stages, has been tremendously successful and has
resulted in delineating over 15 million additional tonnes of thick-vein mineralization in one zone occupying only 0.3% of the 2,170 hectare
property. We believe this to be only the 'tip of the ice berg'. From preliminary investigations we are extremely excited by the further
tremendous potential of this property, which our exploration program will continue to quantify in 2008 and beyond.
With the understanding of the geology that we already have, we are planning to start production using the rehabilitated existing
concentrator and infrastructure in early 2009 quickly building up to 1,500 tpd. In addition, we have commissioned a study of a second new
6,700 tpd plant and will begin the permitting process in mid 2008 for its construction and operation. To facilitate an efficient production
start up, we are preparing the site and infrastructure, including the construction of accommodations, with contractors and almost 150
employees at site and in our Lima office. The site is blessed with a first class paved highway to its gate for easy access and a 230 kVA
national electrical transmission line traversing its grid for accessible competitive power.
Beyond that, the potential of this project is such that production can be expected to ultimately reach 10's of thousands of metric
tonnes per day in years to come, likely from several on-site plants. Its growth prospect is tremendous, and will require hundreds of
millions in investment. To assist us in financing and funding our growth, the company will commission Credit Suisse as advisor and to
support us in finding, in 2008, a suitable long term strategic partner who can bring in the necessary financial and technical resources.
Pachapaqui is an exciting project, with world class potential for a bright future, and management is diligently managing its growth. Our
objective is to maximize shareholder value, with carefully thought out rationale recognizing the conditions in which we operate, while at
the same time being a responsible corporate citizen in Peru and operating in an environmentally and safe manner.
In September 2007, we completed a reverse merger with Platinum Diversified Minerals Ltd., and re-listed as International Consolidated
Minerals Incorporated on the AIM of the London Stock Exchange. This afforded us approximately US24m in cash to fund the exploration and
development works, a public listing and access to capital. Our original shareholders retained 79.61% per cent of the Company.
As a public company, we look forward to pursuing further growth opportunities that we know exist in the region, leveraging our knowledge
of the local conditions and the excellent mining-friendly operating environment offered by the Government of Peru. We believe that 2008 will
become for ICMI a year of the start of a successful transition from an exploration to a producing company.
On behalf of the Board I would like to thank our employees, shareholders, the local communities of the Town of Pachapaqui and the
Community of Aquia, and the Country of Peru for their cooperation, assistance and significant contribution to a successful year for our
Company. We view the strong commitment and dedication of our people and all our stakeholders as a crucial factor in continuing to deliver
value to the Company for the benefit of all.
Gregory C. Smith
Chairman & Chief Executive Officer
International Consolidated Minerals Inc
President & Chief Operating Officer's Statement
For the year ended 31 December 2007
Business and Operational Review
Over the course of 2007, ICML focused efforts at its silver-zinc-lead-copper-gold Pachapaqui property in Peru on exploration to increase
mineral resources sufficient to support the operations of a proposed new 6,700 tpd concentrator and those of the existing concentrator
upgraded to 1,500 tpd. At the same time, ICML began preparing the site for a start of production in early 2009 by starting the upgrading and
re-commissioning of the existing site facilities and infrastructure, and the recruitment of key personnel.
The Pachapaqui asset, a former operating mine that had primarily targeted silver but additionally contains tremendous zinc, lead, copper
and gold med-to-high grade resources, was acquired by ICML in 2006. The property is situated within the same mineralization belt as the
world-class mines of Antamina, Pierina, and Atacocha Milpo and is comprised of one beneficiation concession (65 hectares) and 32 mining
concessions (2,105 hectares) on which practically no systematic exploration had been performed prior to IMCI's acquisition. Thus there was
no real historical understanding of the geology or true appreciation of the potential of the project. Since beginning the surface and
underground mapping, diamond drilling, and underground tunnelling exploration program in Q1 2007, ICML has identified several very large
previously unknown geological mineralized structures and has delineated over 15 million tonnes of new polymetallic mineralization, which
will be quickly upgraded to resources, on a very small percentage of the property area. Management believes that additional resources will be delineated as a result of its exploration program which will
continue through 2008 and beyond.
In anticipation of the start-up of production in early 2009, the Group also began the feasibility design of, and performed some
rehabilitation on, the existing site concentrator to increase its production capacity from 800 tpd to 1,500 tpd; began the refurbishment of
the two hydro plants (2.5 MW total capacity) and certain mine infrastructure; overhauled selected mobile mining equipment including a 3.5 yd
scooptram; purchased a new Atlas Copco Rocket Boomer 282 twin-boom drill jumbo; a CAT 235 backhoe (excavator); rented one CAT 950 FEL and
two Cat 500 kW diesel powered electrical generators; ordered long lead time production equipment including two new scooptrams and three new
concentrate filter presses for delivery in 2008; began the process of obtaining permits and designs for the hook-up to the 230 kVA national
power transmission line that traverses the property; and performed successful plant-level tests on the processing on certain of the tailings
to produce low grade but saleable zinc concentrate. A new pickup truck fleet of 10 units was ordered for delivery during 2008. In late 2007, the Group began the recruitment process of key
personnel. To attract and retain these employees, the construction of new first class on-site kitchen and personnel accommodations, as well
as the rehabilitation of existing accommodations and recreation centre, was undertaken.
The Group also commissioned a feasibility study level design for the proposed new 6,700 tpd new facilities.
ICML submitted an Environmental Impact Statement (EIS) for 1,500 tpd operations in 2006, and provided additional support information and
applied for all permits in 2007. The Group anticipates the approval of the EIS during 2008 and all necessary permits for construction during
2008. Another EIS will be prepared completed and submitted for an additional 6,700 tpd mining and concentrating operations.
The site operations are supported by an office in Lima providing administration, payroll, accounting, purchasing and logistics,
environmental-health-safety management, legal, governmental relations, and executive services.
Working with the premise that the upgrade of the existing concentrator to 1,500 tpd will start during the 2nd half 2008, we commenced
our recruiting efforts in Peru for the senior and professional site positions at site. We will have to pay very competitive compensation
packages, including inclusion into future stock options plans, to attract and retain people of acceptable quality for these critical
positions.
Exploration Programme
When ICML took over the Pachapaqui project, it had 43-101 and JORC compliant resources of 7.8 million tonnes, with average grades of
5.84 oz/tonne silver, 4.31% zinc, 2.69% lead, and 0.73% copper. To expand/prove up tonnages for the resource base, ICML started the initial
stage of a new long range exploration programme in Q1 2007. Given the large size of the property, management decided to focus on the Mantos
area where, from existing adits, there were known to be appreciable but as yet un-quantified resources. The Mantos area accounts for
approximately 0.3% of the mining concessions area.
During 2007, ICML successfully drilled 59 diamond drill holes (over 14,000m) and drove 400 meters of tunnel in the Mantos area. All of
the 59 completed diamond drill holes intersected mineralization, predominately in three wide sub-parallel mineralized vein-like zones:
'Esperanza', 'Intermedio' and 'Matter', ranging in true thickness of 1.5 to 8 m, 1.5 to 5 m, and 2 to 32 m, respectively, and averaging
approximately 18 to 25 metres. These zones are separated by rock of 'low-to-no' mineralization in a predominately limestone host rock
totalling up to 25 metres between all three zones. In the focus area, the Mantos zones are now known to extend, from drill hole information
combined with exposure at surface and in underground workings, for a strike length of at least 500 metres and a down-dip length of over 600
metres and still open at depth, dipping at an average of 55 degrees towards the south-west.
To the end 2007, preliminary diamond drilling results indicated at least 15 million tonnes of in-situ mineralization in the Mantos focus
area.
Table 1: Assays from Mantos Drilling Programme
Assay Results to 31 January 2008 (39 of 58 holes)
Vein Inters'ns Avg.Width Average Grades
Au Ag Pb Zn
Cu
No. (m) g/t ozt/t % %
%
Esperanza 21 6.37 0.31 3.04 2.23 5.07
0.64
Intermedio 19 3.86 0.29 2.80 2.24 5.15
0.57
Matter 20 6.51 0.20 2.17 1.98 5.21
0.64
Amelia's 20 6.07 0.31 5.35 1.69 4.22
0.99
Total 80 0.28 3.36 2.02 4.90
0.72
These holes were drilled in an attempt to define the boundaries of the veins of the Mantos area, and may not be representative of the
entire Mantos area veins.
In addition, the Mantos zones have been confirmed by drill holes to be open along strike to the north-west to a distance of least 300 m
outside the current focus area, although the zones appear to be thinning out (to approximately 10 metres in aggregate) at that point. The
300 m section of the deposit to the north-west of the focus area is eroded down to the 4,200 m elevation from 4,500 m elevation in the focus
area, with the resources in this area not being included in current estimates. The remainder of the drilling programme for Mantos in this
stage of the Pachapaqui exploration programme, along with the tunnelling, will carry on throughout 2008 and is designed to improve the
quality category of resources within the Mantos focus area rather than add additional outside tonnage.
The current exploration programme also aims to increase resources tonnes in further areas outside of Mantos. The Group intends to drill
in high prospect areas immediately adjacent to Mantos during 2008 and then expand to other areas as a preliminary property wide program
which, along with surface geological mapping accompanied by detailed geological mapping in selected areas, will begin to give some idea of
the extent of the tremendous resources on this property. This work should help the Company gain a better understanding of the potential
discoveries that exist on the Pachapaqui property which will, in turn, permit long term strategic production planning, development and
implementation as well as assist in planning and prioritizing exploration targets.
By way of example, although no appreciable work has been done as yet on areas outside of Mantos, from preliminary investigations the
property is known to host very extensive skarns, a large breccia in a collapsed caldera, Cu-Au mineralized areas, and a large porphyry
system, totalling it is believed in the hundreds of millions, even possibly billions, of tonnes.
Pachapaqui Mine Rehabilitation Programme
In 2007, the Company performed improvements and rehabilitation property-wide to prepare for production start up.
In the existing concentrator plant, modifications and rebuilds were performed throughout much of the plant, some of which will continue
in 2008. Though much more remains to be completed on the plant building, new floors were installed in the grinding and flotation sections,
new safety guards were placed on pulleys and other moving equipment throughout the plant, new stairs were constructed with handrails, new
lighting was put in place, and new emergency wash stations and fire extinguishers were installed. More plant building work needs to be
completed in the crushing and sizing section. The exterior of the building was painted. Repairs, rebuilds and upgrades were performed on
ball mills �3 and �4, and ball mill �5 was dismantled and shipped to Lima to facilitate its upgrading in 2008. Ball mills �1 and �2 will be
upgraded in 2008. All of the flotation section was completely rebuilt including the cells, motors, pulleys, aerators and launders. Repairs
were completed on the lead and zinc vacuum filters; it should be noted that these filters will be replaced in late 2008 by the new filter presses ordered in May 2007.
The jaw crusher and feeder have been overhauled and are operational, appreciable work remains to be completed in the crushing and sizing
area. The two existing cone crushers and the existing screens have to be refurbished and re-installed along with all new conveying systems.
This work is now the critical path for the restart of the concentrator to process raw ore and will be completed in 2008.
Some processing of tailings (in fact, this is material, now largely oxidized, dumped from the flotation circuits to an area immediately
adjacent to the plant during emergency plant shutdowns in past operations) through the concentrator was undertaken to trouble shoot
equipment, remove certain tailings to facilitate future concentrator construction, and check the recoverability of economic metal.
Approximately 300 tonnes of economic zinc concentrate were produced. Importantly, these concentrator test runs highlighted problems with
hydro plants resulting from obsolete equipment and poor maintenance, and with the electrical system in the plant. Refurbishment was started
on the two on-site hydro plants with the installation of grounding mats and some rebuild of turbines 1 and 2 in the San Martin hydro plant
and 4 and 5 in the San Judas hydro plant. These electrical issues, including upgrading of the generators and electrical panels, and the
installation of automatic operations controls, will be completed in 2008.
Work and upgrades are planned and have to be completed on the plant electrical system in 2008 to improve reliability, flexibility and to
bring the system into compliance with first world industrial electrical codes.
At the mine, the mine workings were signed and barriers erected in dormant areas, ventilation systems were installed as necessary, and
explosive magazines improved. New lamps and safety equipment were acquired.
On the site, certain roads were cleared and upgraded with ditches, lined ditches were put in place to collect and control site drainage
around the concentrator, the on-site power transmission line was repaired and extended, a 'bone yard' was established, the domestic sewer
systems were repaired (with new systems planned for 2008), and a domestic garbage collection and removal system was put in place.
Technology and Accommodations Upgrades
With respect to communications technology, the Pachapaqui site is very remote with no access to in-place land lines or microwave
telephone services. In 2007, ICML completed its large undertaking of installing its world-class communications system at the site and its
Lima office. The Pachapaqui site is now linked by satellite to the local Telefonia national telephone and internet service, and has been
wired with fiber optics cable providing 100% reliable phone and internet lines, and computer LAN. All technical and clerical employees at
site are provided a computer and other state-of-the art technology. Printers, faxes, scanners, plotters, survey total stations, e-mail,
internet access for selected users, geological modelling software, drafting software are in place and functioning for everyday use.
Recognising that in order to attract and retain high level management, and skilled and professional employees today's highly competitive
labour environment, in addition to committing to paying very competitive compensation, ICML started a programme in 2007 of building new and
upgrading existing accommodations and offices on site, including new sleeping quarters, recreational and kitchen/catering facilities for
approximately 200 workers (not including the workers forom the immediate communities). Satellite TV systems were installed in staff
accommodations, and pool tables, a large TV screen, and a home theatre system was installed in the recreation centre. These works will
continue throughout 2008.
Corporate Social Responsibility
The Group pays special attention to its responsibilities and the commitments it makes as a corporate citizen in the communities within
which it operates. ICML has embarked on a number of corporate and social responsibility projects to benefit the wider community living at
the Town of Pachapaqui and the Community of Aquia. In 2007, among other things, ICML completed construction of a new (the first one in the
area) Catholic church, assisted the Town of Pachapaqui in cleaning the town of domestic garbage that had accumulated over the years and
organised and financed an ongoing garbage collection and removal system, provided bussing for the local school, provided free access to
medical facilities at the mine and use of the mine's ambulance in emergencies, began the planning of a community hall with and for the
Community of Aquia, provided input into a the location of a local fish farm, agreed to finance an irrigation study for the area to be
completed by a specialist. During 2008, an 'internet cafe' with six computers will be provided to each of the Town of Pachapaqui and the Community of Aquia and maintained by the Company. In addition,
preferential treatment continues to be given to local businesses and to local residents for employment.
We remain fully committed to high standards of responsible mining and involvement in local surrounding communities.
Health and Safety
ICMI is dedicated to developing and operating its projects in full compliance with international environmental and safety standards. The
Pachapaqui operation maintains an intensive safety programme on both the surface and underground, under the overall direction of an
experienced engineer. The safety department provides training to all new employees and also organises safety sessions for mining crews. A
comprehensive government safety inspection, lasting a week or more, is carried out on-site twice per year. In 2007, we suffered 5 lost time
accidents for 2,032,560 manhours worked, and for the year our on-site Frequency Index was 2.46 (compared to OHSAS 18001 of
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