Overview

Country:	Peru
Ownership:	40% IMZ, 60% Hochschild
Land Position:	63 sq km

Property Description

The Pallancata silver-gold mine is located approximately 520 km southeast of Lima, approximately 180 km southwest of Cuzco and 240 km northwest of Arequipa. The Pallancata property comprises 6,280 hectares (approximately 63 sq km) in 17 mineral concessions. The Selene silver-gold mine, owned by Compania Minera Ares S.A.C. (Ares), a wholly-owned subsidiary of the Peruvian mining company, Hochschild Mining plc (Hochschild), is located approximately 10 km to the northeast.

The Pallancata mine is jointly-owned by IMZ (40%) and Hochschild (60%), with Minera Ares as the mine operator. In September 2007, underground production commenced, utilizing cut and fill mining, at an initial rate of 500 tonnes per day (tpd). The mine is ramping up to 2,250 tpd, augmenting its mining with long hole stoping for larger tonnage, in 2008. Ore is trucked to Hochschild’s Selene mill for toll processing to produce a saleable silver-gold concentrate.

The Pallancata Mine is ramping up to 2,250 tpd by year-end 2008, which would make it one of the largest primary silver mines in the world. Production in 2008 is expected to be in excess of 4 million ounces of silver equivalent in 2008, with 40% attributable to IMZ.

Under the terms of the joint venture agreement, Hochschild earned its 60% interest by paying for all construction and development capital costs through to production. These costs were non-recoverable from IMZ’s share of cash flow.

IMZ engaged IMC Group Consulting Ltd to prepare a Technical Report (the “Pallancata Report”) under NI 43-101. Please refer to the Pallancata Technical Report, entitled “Technical Report - Pallancata Project Peru” and dated October 12, 2007, by clicking here. The Pallancata Report has been filed on SEDAR under IMZ’s name at www.sedar.com.

Exploration History

Prior to acquiring the Pallancata property in late 2002, IMZ carried out an initial sampling program over the Pallancata Vein and San Javier zone which consisted of 60 rock panel and channel samples. Only two rock channel samples from an old surface working in the central part of the Pallancata Vein reported significant precious metal values. Following the acquisition of the property, IMZ collected a total of 231 surface and underground rock chip and channel samples from the vein and enclosing wall rocks. Values from these samples ranged from trace amounts to 4,380 g/t silver and 0.01 to 22.0 g/t gold.

Based on IMZ’s detailed geological mapping and surface and underground rock sampling program, a total of 17 angled core drill holes were completed in 2003 as part of the Phase 1 program. The assay results confirmed the high-grade, locally “bonanza-grade”, nature of the mineralization in the Pallancata Vein and identified a different style of high-grade silver-gold mineralization in the West Breccia zone that carried a noticeably higher gold content than that generally intersected in the central part of the Pallancata Vein.

IMZ conducted a Phase 2 drill program between August 2004 and June 2005. As in the Phase 1 program, drill hole intercepts with significant silver and gold values were reported, notably in the new drill holes in the West Breccia zone. This Phase 2 drilling in the West Breccia Zone indicated the possible presence of high-grade mineralized shoots at the intercept of north-south striking veins with the northwest-southeast striking Pallancata Vein.

Additional infill and exploration drilling are ongoing. Recent positive results include 20.0m at 760 g/t silver and 3.5 g/t gold and 34.0m at 459 g/t silver and 1.5 g/t gold, both from drill holes located in the Pallancata Central zone.

Exploration Outlook

Exploration is focused in the near term on the excellent upside potential for reserve and resource additions in the Pallancata vein, both at the Pallancata Central as well as the West Breccia ore shoots. Exploration of other prospective veins on the property (Mariana, Mercedes, Virgen del Carmen and San Cayetano) will be followed up in the future.

Geology and Mineralization

IMZ has defined three principal areas of mineralization extending from the San Javier area in the north for over 4km to the Pallancata Vein in the south. Mineralization extends up to 4km in a roughly east-west direction, and the mineralized system has a vertical extent of approximately 500m. The Pallancata Vein is the principal target area and hosts a zone of complex multi-phase veining and faulting that generally has well-defined conduits that underwent major dilation. The Pallancata Vein is over 2km long and is up to 40m wide, including the intensely silicified wall rocks. Individual veins or splays are more typically 0.5m-3.0m wide. The San Javier and Mariana zones display similar veining with high-grade silver and gold mineralization.

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Qualified Person

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