The Pallancata District is bounded to the north by Hochschild’s Selene Mine and to the south by the Pallancata Mine (40% IMZ, 60% Hochschild). Currently, the area contains two advanced drilling projects, Urbaque (51% IMZ, 49% Barrick) and Pacapausa (20% IMZ, 30% Hochschild, 50% Southwestern Resources).

Pacapausa Project

Property Description

The Pacapausa silver-gold property is located approximately 250 km northwest of Arequipa and is situated between Pallancata Mine (40% IMZ, 60% Hochschild) and Hochschild’s Selene Mine. The property consists of 11 concessions, totaling 8,000 hectares (80 sq km), located immediately adjacent to the Company’s Pallancata Mine in Peru.

Exploration

In May 2007, IMZ completed a first-phase drilling program comprising 11 core drill holes, totaling 2,082m at the Pacapausa property. Silver mineralization was encountered in all 11 drill holes. A number of chalcedonic veins/stockwork zones ranging from 0.2m to 10.8m wide (not true widths) containing visible silver mineralization (as sulfosalts) were intersected in the drilling. Highlights of the 2006-2007 drill program at Pacapausa include intersections of: 10.8m grading 212 g/t silver, 1.5m grading 548 g/t silver, 4.5m grading 205 g/t silver.

Exploration Outlook

No drilling is planned in 2009 due to budget cuts by IMZ's joint venture partner, Hochschild.

Geology and Mineralization

Regionally, the project lies in the Western Cordillera of southern Peru, which comprises principally of Cretaceous and Tertiary volcanic and rare sediments, together with Tertiary intrusive.

Joint Venture

IMZ acquired an additional 25% interest in the Pacapausa property from IAMGOLD in November 2007 and then transferred the Company’s resulting 50% interest in the Pacapausa property to Minera Suyamarca S.A.C., the joint venture company which is the owner of the Pallancata Mine (held 40% by IMZ  and 60% by Hochschild). The remaining 50% interest was held by Southwestern Resources.

With Hochschild's acquisition of Southwestern Resources in 2009, Pacapausa is now held 20% by IMZ and 80% by Hochschild, although IMZ remains as the operator.

Pacapausa is a potential satellite source of material for the Pallancata Mine / Selene Mill.

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Urbaque Project

Property Description

The Urbaque gold project is located adjacent to the Pallancata silver-gold mine and approximately 10km southeast of Hochschild’s Selene silver-gold mine. The property consists of three concessions totaling 2,800 hectares and is at an advanced drilling stage.

On February 26, 2006 (as amended on March 14, 2006), IMZ signed a Letter Agreement with Barrick Gold Corporation’s Peruvian subsidiary, Minera Barrick Misquichilca S.A. (Barrick) with respect to Urbaque.

Exploration

Previous surface rock chip sampling by Barrick (344 samples) over a 4km by 6km area reported a range of assay values from trace amounts to 8.3 g/t gold and 0.1 g/t to 57 g/t silver. During IMZ’s initial sampling program, a total of 30 rock-chip samples were collected over a 5km by 3km area. The samples consisted of quartz veins, breccias and stockworks. In 2007, IMZ completed a detailed geologic mapping and surface rock sampling program, collecting an additional 864 rock chips. Reported values ranged from trace to 6.6 g/t gold and from 0.2 g/t to 592 g/t silver.

In late 2007, an initial drill campaign of eight widely-spaced holes was completed. Highlights of this drilling program include the following mineralized intersections (all estimated true widths): 35.0m at 0.56 g/t gold, including 13.0m at 0.90 g/t gold; 32.0m at 0.91 g/t gold, including 18.0m at 1.22 g/t gold; 55.0m at 0.45 g/t gold, including 18.0m at 0.72 g/t gold and 35.0m at 0.40 g/t gold.

Exploration Outlook

Preliminary cyanide leach tests performed on drill core to evaluate process recovery options for a possible low-grade, bulk-mineable gold deposit were not conclusive and the potential for a heap leach operation is not considered feasible at this time.  Exploration activities have been temporarily suspended on the property pending a corporate decision on the status of the property.

Geology and Mineralization

The principal gold occurrence on the Urbaque property is of the disseminated, high-sulfidation type. The mineralization is localized within a rhyolite flow-breccia, which overlies a sequence of lithic tuffs and is capped by rhyolite flows. Two phases of mineralization have been identified: an early event, associated with silica flooding; and a later event, characterized by hydrothermal breccias and veins. A portion of the mineralization was subjected to post-mineral, normal faulting, and is not exposed at surface.

Joint Venture

Under terms of the Agreement, IMZ must complete 9,000m of drilling within a three-year period to earn a 51% interest in the property. Following this, Barrick will have a one-time back-in right to increase its interest from 49% to 60% and become the operator, if there is a total mineral resource (measured, indicated and inferred) in excess of 2 million ounces of gold, by paying three times IMZ’s drilling costs up to the date of the back-in. If Barrick’s interest is reduced to less than 20%, then Barrick may exchange its interest for a 2% net smelter return (NSR) royalty payable on all minerals extracted from the property after commencement of commercial production.

IMZ is currently evaluating various alternatives for the Urbaque property.

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Qualified Person

The technical information reported here was supervised and reviewed by IMZ's Qualified Person, Exploration Manager Mark Cannuli .