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I-Minerals Updated Pre-Feasibility Study of Its Bovill Kaolin Project Yields $212 Million After Tax NPV and 30.5% IRR

VANCOUVER, BC--(Marketwired - June 03, 2014) - I-Minerals Inc. (TSX VENTURE: IMA) (OTCQX: IMAHF) ("the Company") is pleased to announce that further to its press release of May 14, 2014 wherein the Company announced Measured and Indicated Mineral Resources of 11.2 million short tons of Kaolin-Halloysite-Quartz-potassium feldspar ("K-Spar") bearing primary clay on its Bovill Kaolin Project (the "Bovill Kaolin Project"), SRK has now provided the accompanying results of the Technical Economic Model (TEM) of the Updated Prefeasibility Study ("PFS"). The Bovill Kaolin Project is a strategically located long term resource of high purity quartz, K-spar, halloysite and kaolin formed through the weathering of a border phase of the Idaho Batholith causing all minerals to be contained within a fine white clay-sand mixture referred to as "primary clay." The Bovill Kaolin Project is located within 5 kilometers of state highways with electricity and natural gas already at the property boundary. Highlights of the TEM include:

  • US$330 million Pre-Tax NPV; US$212 million After Tax NPV
  • 38.2% Pre-Tax IRR; 30.5% After Tax IRR
  • Initial Capital Cost of $72.7 million and Total Life of Mine Capital costs $90.8 million
  • 11.2 million short tons of resources
  • 6.9 million short tons of reserves
  • 25+ year mine life with 0.69:1 strip ratio
  • 3 year estimated after tax payback

Statement of Mineral Resources
The Measured and Indicated Mineral Resources are reported in Table 1. No mining cut-off grade is applied since all material within the pit design that does not report to tailings can be mined for a profit. Three mineral products are included in the resource: feldspathic sand, a combination of potassium feldspar ("K-spar") and quartz, kaolinite clay and halloysite clay:

 Table 1: Statement of Measured and Indicated Mineral Resources from the WBL Pit and Middle Ridge areas, (as of 20 April 2014)*

                         Percent (%)                                        
                Tons       Quartz &     Kaolinite   Halloysite              
             (000,000s)   K-Spar Sand     Clay         Clay         Waste   
  Measured           3.3         76.0         13.0          4.5          7.0
  Indicated          7.9         74.4         15.6          2.7          7.3
  Total             11.2         75.0         14.8          3.2          7.1
           Tons (000s)                                                      
               Quartz &                                                     
              K-Spar Sand    Kaolinite Clay  Halloysite Clay      Waste     
  Measured       2,505             417             148             222      
  Indicated      5,902            1,239            215             579      
  Total          8,407            1,656            363             801      

* Note that values presented here have been rounded to reflect the level of accuracy.

Results of the Pre-Feasibility Study
The PFS assumed a weighted average price of primary clay products -- halloysite, kaolin, metakaolin, quartz and K-spar -- of $255/ton as supported by market studies completed by I-Minerals, preliminary studies being undertaken by a European company specializing in halloysite research, and a market study conducted by a major international marketing and research firm. If all of the known Mineral Resource eventually convert to Mineral Reserves, the project mine life could potentially expand to 40 years; however initial indicative economics were performed assuming a 25 year market for primary clay products. Mineral Reserves are presented below in Table 2 and production highlights are tabulated in Table 3. 

Table 2: Statement of Mineral Reserves, (as of May 30, 2014) All figures thousands of tons*

                            Million    Halloysite     Kaolin                
  Reserve                   Tonnes       Grade        Grade      Sand Grade 
  Kelly Hump                                                                
  Proven                          1.9         4.5%        12.6%        76.4%
  Probable                        1.1         5.6%        14.3%        72.9%
  Kelly South                                                               
  Proven                            0         0.0%         0.0%         0.0%
  Probable                        1.4         1.4%        21.6%        69.9%
  Middle Ridge                                                              
  Proven                          0.8         6.4%        11.9%        74.6%
  Probable                        1.6         4.2%        12.1%        76.0%
  Proven                            0         0.0%         0.0%         0.0%
  Probable                        0.9         2.2%        15.3%        75.2%

* Note that values presented here have been rounded to reflect the level of accuracy.

Table 3: Production Highlights

Parameter                                                              Value
Average Annual Plant Production Rate                                 275 kst
Process Throughput Rate (nominal)                       800 tons ore per day
Stripping Ratio (waste: ore)                                            0.69
Mine Life (market limited)                                         25+ years

The reserves of primary clay are under a shallow layer of overburden generally less than 20 feet. Initial pits are limited to depths of approximately 75 feet. Given the physical properties of the primary clay, no drilling or blasting is required. The process flow sheet includes wet screw classification and screen separation of the halloysite -- kaolinite clay fraction -- from the quartz -- K-spar sand fraction. The clay fraction is separated into kaolinite and halloysite using -hydrocylone-, centrifuge, and differential flotation techniques to yield +90% halloysite products. After tertiary grinding, the quartz and K-spar in the sand fraction are separated using standard wet flotation and dry rare earth magnetic separation techniques. Employing up to three stage flotation, quartz purities with less than 200 PPM of total impurities have been produced without the use of any acid leaching techniques.

On an after-tax basis, technical-economics indicate an NPV6% of US$212 million with an IRR of 30.5%. Payback will occur 3 years from the start of production. Economic results are summarized below. 

Table 4: Economic Results1

Description                        LoM Value      LoM Value       Unit Cost 
                                      (US$Ms)        (US$Ms)       (US$/ton 
                                      Pre-Tax      Atfer-Tax        product 
Gross Revenue                   $     1,270.4  $     1,270.4  $      254.79 
  Marketing                              (5.0)          (5.0)        ($1.00)
  Royalties (5% sales)                  (63.5)         (63.5)       ($12.74)
          Gross Income          $     1,201.9  $     1,201.9  $      241.05 
  Mining Costs                          (50.4)         (50.4)       ($10.10)
  Processing Costs                     (295.1)        (295.1)       ($59.18)
  G&A Costs                              (7.2)          (7.2)        ($1.43)
        Operating Costs               ($352.6)       ($352.6)       ($70.72)
  Mine Capital                           (1.4)          (1.4)             - 
  Process Capital                       (69.3)         (69.3)             - 
  Tailings Capital                      (14.1)         (14.1)             - 
  Owner Capital                          (6.1)          (6.1)             - 
          LoM Capital                  ($90.8)        ($90.8)             - 
  Taxes                                               (262.5)             - 
         Subtotal Capital & Tax        ($90.8)       ($353.4)             - 
                      CASH FLOW $       758.4  $       495.9              - 
                          NPV6% $       330.7  $       212.7              - 
                            IRR          38.2%          30.5%             - 

1 Differences in totals and subtotals are due to rounding, and are not material to the results presented. 

The technical economics results for the PFS and its supporting Mineral Resource estimate presented in this press release was completed by SRK Consulting (US) Inc. ("SRK") in Lakewood, Colorado. Tetra Tech ("TT") in Denver, Colorado was commissioned by the Company to complete design of the Proposed Tailings Facility (PTF). HDR, Inc. (HDR) in Boise, Idaho was commissioned by the Company to aid in permitting and environmental issues. Roberts & Schaefer ("R&S"), a KBR Company, was commissioned to complete the design for the planned processing and product packaging facilities. 

Dr. Bart Stryhas constructed the geologic model and resource estimation results reported herein. He is responsible for the resource estimation methodology and the resource statement. Dr. Stryhas is a Qualified Person (QP) and is independent of the issuer applying all of the tests in Section 1.4 of NI 43-101. Valerie 0bie (QP) completed the reserve estimation reported herein and is responsible for the economic assessment.

I-Minerals' Bovill Kaolin Project is a pre-feasibility level mining venture located in north-central Idaho. The mineral reserves delineated from the primary clay represent the largest confirmed deposits of high quality K-feldspar, quartz, and halloysite in the Western United States. This pre-feasibility study is preliminary in nature. 

"Fundamental changes in the K-spar market have compelled us to expand the production as compared with our maiden Prefeasibility Study, results from which were announced in January 2013," stated Thomas Conway, President & CEO of I-Minerals Inc. "To meet the increased demands in the K-spar market in the Updated PFS we are modelling production on a 24 hours per day seven days a week basis ("24/7") as compared with the Maiden PFS production rate of 24/5. Capital costs are up only modestly (about 7.6 million) as compared with the Maiden PFS to reflect increases in Owners Cost which now includes items such as the cost of a full feasibility that were not included in the maiden PFS. First year's sales were also reduced from Life of Mine averages to reflect the realities of ramping up production. The impacts of lower year 1 revenue and increased initial costs probably shaved a few points off the IRR and several million of the NPV as compared with the assumptions utilized in the Maiden PFS. Nonetheless the Updated PFS has yielded very robust results as highlighted by a NPV almost three times higher than the CAPEX and a payback of just over 3 years."

Mr. Conway continued "Given the limited options currently available to K-spar customers we are very confident in our K-spar pricing assumptions and have materially discounted the pricing on the incremental tonnages of halloysite and quartz sold at volumes in excess of 24/5 levels. With the PFS milestone achieved we are about a year from a full feasibility on the Bovill Kaolin Deposit, with great strides already having been made in the associated permitting process. All told, we are very pleased with the results of the Updated PFS and recognize there may be opportunities to further improve upon the results as we push forward with the full feasibility study."

The NI 43-101 compliant Technical Report is being completed by SRK, TT, HDR and R&S and will be filed on SEDAR (at www.sedar.com) in its entirety as required. All values presented in this press release are in US imperial units and Q2 2014 US dollars. 

I-Minerals Inc.

per: "Thomas M. Conway

Thomas M. Conway,
President & CEO


This News Release includes certain "forward looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. Without limitation, statements regarding potential mineralization and resources, exploration results, and future plans and objectives of the Company are forward looking statements that involve various risks. Actual results could differ materially from those projected as a result of the following factors, among others: changes in the world wide price of mineral market conditions, risks inherent in mineral exploration, risk associated with development, construction and mining operations, the uncertainty of future profitability and uncertainty of access to additional capital.

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