Overview

Country:	Ecuador
Stage of Project:	Feasibility
Ownership:	55% - 100% IMZ (see below)
Land Position:	33 sq km

Property Description

The Gaby gold project is located 130km south of the industrial port and Ecuador’s largest city, Guayaquil. Gaby is located approximately 50km southeast of the Company’s Rio Blanco project. The Gaby property is comprised of 9 mining concessions covering a total of 3,348 hectares (approximately 33 sq km). The property consists of two principal mineralized areas separated by approximately 1.5 km: (1) the Main Gaby deposit, including the Muyuyacu, Villa Sur, Rio Villa 2 and Fermin Bajo concessions; and (2) 1.5 km to the southeast, the Papa Grande/Mollopongo deposits including the Guadalupe, Mollopongo and Papa Grande concessions.  At the Gaby property, IMZ holds a 100% interest in 7 mining concessions, a 55% interest in the concession that hosts the majority of the Main Gaby Deposit, and a 100% interest in the concession that hosts the Papa Grande Deposit.

The Gaby project is at the feasibility stage of project development. Results from a preliminary feasibility study ("PFS" - see February 11, 2008 news release) showed that, while Gaby is currently uneconomic at a $650 gold price per ounce, it was highly leveraged to higher gold prices.  In an addendum to the PFS completed in January 2009 (see January 29, 2009 news release for details), it was determined that the optimal processing rate for Gaby is 60,000 tpd using conventional grinding / cyanidation / CIL recovery methods.  Over the estimated 16 year mine life, Gaby could produce approximately 330,000 ounces of gold (~200,000 to IMZ) at cash costs of ~$670/oz and total costs of ~$850/oz.  Capital costs are estimated at $900 million.  The Gaby Project is currently on hold.  It requires a steady-state gold price of at least $1,000/oz before IMZ could commit to a final feasibility study, which would take approximately 1.5 to 2 years to complete.

For the latest reserves and resources, please refer to the Reserves & Resources Page.   A Technical Report compiled under NI 43-101 by Micon International Ltd and dated March 26, 2008 can be accessed by clicking here: "Gaby Technical Report".  All news releases and the Technical Report are also field on SEDAR at www.sedar.com.

Exploration History

Main Gaby Deposit
Since 1973, the Gaby property has been explored using techniques such as reconnaissance stream sediment and soil geochemical surveys, road cut sampling and drilling. Initial exploration by local Ecuadorian companies in the early 1970s led to the identification of two northwest-trending zones within a 30 sq km area with anomalous gold, tellurium, copper, molybdenum and bismuth mineralization. In 1991, Newmont drilled 11 core holes, but elected not to continue exploration of the property.

The Muyuyacu concession was acquired by an Ecuadorian company, Compania Minera Gribipe (CMG) in 1992. In 1993, IMZ signed an agreement with CMG to acquire a 50% interest in the Muyuyacu concession. The first drilling program commenced in October 1993. IMZ concluded that although the potential of the oxide zone appeared to be limited, results from the deeper holes outlined the western portion of a much larger 850m by 150m “donut shaped” mineralized body which was open to the east. This shape, in combination with the style of mineralization and alteration, is common in porphyry gold-copper systems. IMZ initiated a second phase drilling program on the Muyuyacu concession (and an adjacent concession) in June 1994.

In March 1995, IMZ signed an option agreement with Zappa Resources Ltd. (Zappa, now AKA Ventures, Inc.) to acquire a 51% interest in the Guadalupe concession, which is contiguous to the south with the Muyuyacu concession (and which hosts the southern part of the Main Gaby Deposit). In December 1995, IMZ recommenced drilling to accomplish two principal goals: to infill and further delineate the known gold mineralization on the Main Gaby deposit, and to test a large gold geochemical anomaly covering an area of 5.5km east-west by 1.7km north-south surrounding the Main Gaby deposit. Total drilling by IMZ between October 1993 and March 31, 1997 on the Main Gaby deposit totaled approximately 29,150m (249 drill holes).

In September 1998, IMZ purchased the remaining 49% interest in the Guadalupe concession together with a 50% interest in the Papa Grande concession and a 100% interest in the Mollopongo concession.

Exploration was suspended from the late 1990s to the mid 2000s due to low gold prices.  In March 2006, exploration resumed at Gaby, in part due to the rising price of gold.

In January 2008, IMZ signed an agreement to obtain the remaining 50% interest in the Papa Grande concession. 

Results from the preliminary feasibility drilling program undertaken in 2006 and 2007 confirmed the continuity and grade of the Main Gaby Deposit.  Selected positive results include: 35.0m grading 1.5 g/t gold, 42.1m grading 1.3 g/t gold and 98.0m grading 1.0 g/t gold. (See September 6, 2007 news release.)  Due to the disseminated nature of the gold mineralization at the Main Gaby Deposit, drill intercept thickness can generally be equated to true thickness.

Papa Grande Deposit
During 1994, Zappa carried out an extensive geochemical soil surveying program. The survey outlined a large anomaly of greater than 0.3 g/t gold. Two stages of follow-up trenching were completed between 1994 and 1996. Many of the trenches contained long intervals at grades of greater than 0.1 g/t gold, confirming the soil geochemical anomalies. In addition, 65 existing tunnels were sampled and assay results reported up to 42m at a grade of 1.3g/t gold (Mollopongo) and 62m at 1.6 g/t gold (Papa Grande).

A ground magnetic survey totaling 31 line km was also completed by Zappa over the Papa Grande and Mollopongo areas. The survey was positioned along the pre-existing geochemical survey gridlines. In addition, a geophysical (IP) survey was carried out over the area and indicated several anomalous areas for follow-up. However, since 1998, only surface rock and pit sampling has been carried out by IMZ, primarily due to the low grade nature of the deposit and, until recently, low gold prices.

In 2007, IMZ completed additional preliminary feasibility drilling at Papa Grande.  Highlights of the program include: 48.0m grading 1.7 g/t gold, 40.0m grading 1.4 g/t gold and 54.0m grading 1.2 g/t gold in drill-hole PPG-047.  Due to the broad irregular shape and sub-vertical control to the gold mineralization at the Papa Grande Deposit, drill intercept thicknesses can be equated to approximately 80% of the true thickness of the mineralization in most cases. 

Exploration Outlook

Exploration drilling is focused on the peripheral areas of the two known deposits, Main Gaby and Papa Grande, with upside potential for additional mineral resources.

Geology and Mineralization

The Gaby property is located in the western part of the Cordillera Occidental, adjacent to the narrow coastal plain.  The principal units consist of Cretaceous and Tertiary volcanic rocks and associated volcano-sedimentary units, together with Tertiary intrusive rocks.

At the Main Gaby deposit, the gold-bearing mineralization and pervasive hydrothermal alteration are contained in a large Tertiary-age porphyry-style intrusive body flanked by basic volcanic rocks of Cretaceous age.  The Main Gaby deposit comprises a "U" shaped zone of gold mineralization measuring approximately 1,800m in length and up to 300m in width with gold mineralization intersected over a vertical extent exceeding 500m.

At the Papa Grande deposit, a stock of dacite porphyry has intruded the volcanic sequence resulting in contact metamorphism and widespread crackle brecciation of the host basalts.  The porphyry, which is the main intrusive phase in the Main Gaby deposit, is only a minor component of the Papa Grande area.  Both gold-bearing veins and disseminated gold occur at the Papa Grande deposit.  While the veins are formed along north-northwest trending faults, there is not an obvious control to disseminated gold distribution.

The technical information reported here was supervised and reviewed by IMZ's Qualified Person, Technical Manager Nick Appleyard.