International Minerals Reports $12.0 Million in Pre-Tax Income for Second Fiscal Quarter Ending December 31, 2011

SCOTTSDALE, AZ--(Marketwire -02/14/12)- International Minerals Corporation (TSX: IMZ.TO - News) (SWISS: IMZ.TO - News) (the "Company") reports continuing excellent financial results for the second fiscal quarter ended December 31, 2011 (the "Current Quarter").

Current Quarter highlights include $12.0 million in pre-tax income and $11.1 million in consolidated net and comprehensive income after tax ($0.09 per share), including net equity earnings of $13.1 million from the Company's 40% interest (Hochschild Mining 60%) in the Pallancata Mine in Peru.

For the six-month period ended December 31, 2011, the Company reported pre-tax income of $27.2 million and consolidated net and comprehensive income after tax of $26.3 million ($0.22 per share).

In addition, during the Current Quarter the Company received cash distributions of $12.0 million from the Pallancata Mine, representing its 40% share of free cash flow from prior periods. IMZ anticipates that it will receive its next cash distribution from Pallancata in early April of 2012.

Other notable highlights include the following news release announcements: (a) on December 19, 2011, the results of an independent Preliminary Economic Assessment ("scoping study") for the Company's 100%-owned Converse project in Nevada and (b) on January 11, 2012, the results of an independent Feasibility Study for the Inmaculada project in Peru (40% IMZ / 60% Hochschild).

All amounts in this news release are reported in US dollars.

Highlights for the Three-Month Period Ended December 31, 2011:

During the Current Quarter, the Company achieved the following significant results:

• Pre-tax income of $12.0 million for the Current Quarter compared to $16.6 million for the three months ended December 31, 2010 (the "Prior Year's Quarter"). Income for the Prior Year's Quarter included a non-recurring gain of $2.4 million arising from the sale of an 11% interest in the Inmaculada property to Hochschild in December 2010.
  
  
• After-tax consolidated net and comprehensive income of $11.1 million (or $0.09 per share) compared to consolidated net and comprehensive income after tax of $16.6 million (or $0.14 per share) for the Prior Year's Quarter.
  
  
• Realized net earnings of $13.1 million for the Current Quarter from the Company's 40% share of the Pallancata Mine after the deduction of the Company's monitoring costs and the amortization of certain non-reimbursable costs, compared to $16.3 million for the Prior Year's Quarter.
  
  
• Cash and equivalents at December 31, 2011 increased to $95.7 million from $51.7 million at December 31, 2010 and $86.1 million at June 30, 2011.
  
  
• At December 31, 2011 working capital remained robust at $59.8 million compared to working capital of $52.4 million at June 30, 2011.
  
  
• Consolidated cash flow from operating activities for the Current Quarter was $10.7 million compared to consolidated cash flow from operating activities of $20.6 million for the Prior Year's Quarter. Cash flow from operating activities is materially affected by the timing and amount of cash distributions from the Pallancata Mine for any given reporting period.
  
  
• Gross royalty revenue received by IMZ from its 3% net smelter return royalty from Barrick's Ruby Hill gold mine (the "Barrick Royalty") was $1.3 million for the Current Quarter (net royalty income was $0.8 million). These figures compare to gross royalty revenue of $1.2 million and net royalty income of $1.0 million for the Prior Year's Quarter.
  
  
• The Pallancata Mine (on a 100% project basis) produced approximately 2.3 million ounces of silver and 8,304 ounces of gold in the Current Quarter, compared to 2.8 million ounces of silver and 10,045 ounces of gold in the Prior Year's Quarter.
  
  
• The Company's 40% share of production from the Pallancata Mine in the Current Quarter was approximately 916,000 ounces of silver and 3,322 ounces of gold compared to 1.1 million ounces of silver and 4,018 ounces of gold for the Prior Year's Quarter. The decrease in gold and silver production for the Current Quarter compared to the Prior Year's Quarter was due to a decrease in the grade of both silver and gold processed, due primarily to the fact that the higher metal prices prevailing during the Current Quarter allowed lower grade material to be mined profitably.
  
  
• Direct site costs for the Current Quarter at the Pallancata Mine were approximately $2.35 per ounce silver produced (after gold by-product credits) and total cash costs (as defined by the Gold Institute) were $6.26 per ounce silver (after gold by-product credits). For the Prior Year's Quarter, direct site costs and total cash costs were lower at $1.05 and $4.89 per ounce silver, respectively.
  
  
• Direct site and total cash costs were higher in the Current Quarter compared to the Prior Year's Quarter because of lower metal production, inflationary cost pressures and an unfavorable appreciation of the Peruvian Sol against the US dollar for mine-related site costs.

Other Financial Information for the Three-month Period Ended December 31, 2011:

• Other expenses totaled $1.7 million for the Current Quarter compared to $1.9 million for the Prior Year's Quarter. The decrease in costs in the Current Quarter are mostly due to lower interest and financing costs related to the convertible debentures, as there is no remaining amortization of the deferred financing costs on the debentures because of their maturity in May 2012. The only significant increase in spending compared to the Prior Year's Quarter was a $206,000 increase in professional fees, primarily incurred during the adoption of International Financial Reporting Standards (IFRS).
  
  
• Other items represented a reduction in income of $0.3 million for the Current Quarter compared to net other income of $1.3 million for the Prior Year's Quarter. As previously discussed, other income for the quarter ended December 31, 2010 included a $2.4 million gain from the sale of an 11% interest in Inmaculada to Hochschild.
  
  
• In the Current Quarter, the Company recognized a withholding tax expense of $820,000, which was the Peruvian withholding tax (4.1%) on a cash dividend received by IMZ from its Peruvian subsidiary.
  
  
• At December 31, 2011, the Company's total deferred income tax liability was $8.0 million, which represents the deferred tax liability recorded on the January 2010 acquisition of Metallic Ventures. This tax liability is expected to be a non-cash item and will be amortized at such time as operations commence at the Goldfield or Converse properties or it will be expensed if they are both sold or abandoned.

The Company accounts for its 40% interest in Suyamarca (which owns and operates the Pallancata Mine and the Inmaculada development property) on an equity accounting basis.

Financial Results for the Six-Month Period Ended December 31, 2011:

• The Company reported pre-tax income of $27.2 million for the six-month period ended December 31, 2011 (the "Current Six Month Period") compared to pre-tax income of $25.2 million for the six-month period ended December 31, 2010 (the "Previous Six Month Period").
  
  
• Consolidated net and comprehensive income after tax for the Current Six Month Period was $26.3 million ($0.22 per share) compared to $25.2 million in consolidated net and comprehensive income ($0.22 per share) for the Previous Six Month Period and the increase was primarily due to increased equity income from the Pallancata Mine.
  
  
• Consolidated cash flow from operating activities for the Current Six Month Period was $30.4 million compared to $22.1 million for the Previous Six Month Period, with the increase due to an increase in cash distributions from the Pallancata Mine.
  
  
• Net equity income from the Pallancata Mine for the Current Six Month Period was $27.9 million compared to $25.2 million for the Previous Six Month Period. This increase was largely a function of higher metal prices offset by lower metal production and sales.
  
  
• Net royalty income from the Barrick Royalty for the Current Six Month Period was $1.5 million compared to net royalty income of $1.6 million for the Previous Six Month Period.

Operating Statistics for the Pallancata Mine (100% Project Basis).

The table below reports key operating and cost statistics for the Pallancata Mine for the fiscal quarters ended December 31, 2011 and 2010, respectively and for the calendar years ended December 31, 2011 and 2010, respectively, together with the results for the quarter ended September 30, 2011.

 

----------------------------------------------------------------------------
                       Quarter    Quarter    Quarter     Year       Year
                        Ended      Ended      Ended      Ended      Ended
                      12/31/2011 12/31/2010 09/30/2011 12/31/2011 12/31/2010
----------------------------------------------------------------------------
Ore mined (mt)           291,607    304,277    269,273  1,039,674  1,090,948
----------------------------------------------------------------------------
Ore processed (mt)       293,060    281,035    268,673  1,070,467  1,071,617
----------------------------------------------------------------------------
Head grade- Ag (g/t)         293        358        313        301        344
----------------------------------------------------------------------------
Head grade-Au (g/t)         1.27       1.50       1.43       1.33       1.40
----------------------------------------------------------------------------
Concentrate produced       2,363      2,283      2,266      8,608      9,541
 (mt)
----------------------------------------------------------------------------
Silver production      2,288,930  2,762,725  2,290,805  8,767,394 10,135,483
 (oz)
----------------------------------------------------------------------------
Gold production (oz)       8,304     10,045      9,370     33,881     35,849
----------------------------------------------------------------------------
Silver Sold ( ozs)     2,636,200  2,548,700  1,935,300  9,063,800  9,998,000
----------------------------------------------------------------------------
Gold sold (ozs)            9,315      8,333      8,017     33,900     32,600
----------------------------------------------------------------------------
IMZ direct site costs       2.35       1.05       1.01       2.20        222
 (US$)
----------------------------------------------------------------------------
IMZ total cash costs        6.26       4.89       5.44       6.38       5.47
 (US$)
----------------------------------------------------------------------------

Notes:
1. The reported head grades for silver and gold are based on the overall metallurgical balance for the process plant.
2. The difference between "produced" metal ounces and 'sold" metal ounces is in-process concentrate. Silver sales have been rounded.
3. Silver and gold ounces sold are reported as gross ounces.
4. Direct site costs per ounce silver and total cash costs per ounce silver reflect a "mined ore inventory adjustment". IMZ believes that this calculation more accurately matches costs with ounces of production (Also see notes 4 and 5 below).
5. Direct site costs per ounce silver comprise direct mining costs, mined ore inventory adjustment, toll processing costs and mine general and administrative costs. The cost per ounce is net of gold by-product credits.
6. Total cash costs, using the Gold Institute definition, comprise: mine operating costs, mined ore inventory adjustment, toll processing costs, mine general and administrative costs, Hochschild management fee, concentrate transportation and smelting costs, local and regional taxes and the government royalty. The costs per ounce are net of gold by-product credits.

Company Outlook

During the 2012 fiscal and calendar years, the Company's exploration and development efforts are focused on:

• At the Pallancata silver mine in Peru:
  • Working with Hochschild to continue production at the 3,000 tpd mining rate to produce approximately 8.0 million ounces of silver and 34,000 ounces of gold in calendar year 2012 (the Company's estimate on a 100% project basis).
    
  • Increasing mineral resources and reserves to extend the existing mine life (approximately a 4 years based on current reserves).
    
    
• At the Inmaculada gold-silver project in Peru:
  • Working with Hochschild to continue with mine development and construction with production targeted to commence prior to the end of calendar year 2013.
    
  • Continuing with an aggressive exploration program in order to expand reserves and resources.
    
    
• At the Goldfield gold project in Nevada, to complete a feasibility study in the summer of 2012, with the goal of potential production in calendar 2015.
  
  
• At the Converse gold project in Nevada, to commence a feasibility study in the summer of 2012.
  
  
• At the Rio Blanco gold-silver project in Ecuador, to conclude discussions with the Ecuadorian government with respect to the negotiation of a production contract, which will include quantification of certain tax and royalty issues related to the 2009 Mining Law.
  
  
• Also subject to clarification of the mining law issues mentioned above, to advance the Gaby gold project with the commencement of a feasibility study before the end of the calendar year.
  
  
• Enhancing cash flow by acquiring a producing asset or assets in a low-risk political and environmental jurisdiction in the Americas.
  
  
• Continuing to seek additional strategic joint venture alliances, such as that with Hochschild at Pallancata and Inmaculada, in order to fast-track projects to production and to reduce future cash outlays by the Company.

Hochschild Mining plc does not accept any responsibility for the adequacy or inadequacy of the disclosure made in this news release and any such responsibility is hereby disclaimed in all respects.

To view the Company's financial statements and MD&A, please click the following link:
http://www.intlminerals.com/financialreports.php

Cautionary Statement:

The Gold Institute calculation of Direct Site Costs and Total Cash Costs are non-IFRS financial measures, which Company management believes are useful in measuring operational performance. Some of the statements contained in this release are "forward-looking statements" within the meaning of Canadian securities law requirements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to differ materially from the anticipated results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements in this release include statements regarding production expectations, drilling and development programs on the Company's projects, timing of completion of economic studies and the timing of commencement of construction and production and, obtaining of required environmental and production permits. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties such as: risks relating to obtaining mining and environmental permits; mining and development risks; financing risks; risk of commodity price fluctuations; political and regulatory risks; risks related to the new mining law in Ecuador, and other risks and uncertainties detailed in the Company's Annual Information Form for the year ended June 30, 2011, which is available at www.sedar.com under the Company's name. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 
INTERNATIONAL MINERALS CORPORATION
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(Expressed in United States dollars)
(Unaudited)
                                      December 31,     June 30,      July 1,
                                              2011         2011         2010
                                      ------------ ------------ ------------

ASSETS

Current
  Cash and equivalents                $ 95,730,036 $ 86,127,062 $ 29,099,344
  Receivables                            1,513,474    4,567,909    4,192,295
  Due from related party                   182,597      557,367            -
  Prepaid expenses and deposits            160,766      135,969      158,772
  Investments                            4,160,727    4,437,839    3,082,317
                                      ------------ ------------ ------------

      Current assets                   101,747,600   95,826,146   36,532,728
Non-current
  Property, plant and equipment
    Investment in Ruby Hill royalty     10,521,808   11,402,904   13,409,126
    Other property, plant and
     equipment                             554,092      504,033      473,093
                                      ------------ ------------ ------------
      Total property, plant and
       equipment                        11,075,900   11,906,937   13,882,219

  Investment in associate              126,475,665  118,898,399   36,668,508
  Investment in resource properties    155,536,960  141,619,839  202,263,484
  Reclamation / environmental bonds        213,108      213,108      212,701
                                      ------------ ------------ ------------

      Non-current assets               293,301,633  272,638,283  253,026,912
                                      ------------ ------------ ------------

Total assets                          $395,049,233 $368,464,429 $289,559,640
                                      ============ ============ ============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current
  Accounts payable                    $  1,165,373 $    778,529 $  2,745,732
  Accrued severance and payroll costs    1,445,523    1,436,516    2,688,028
  Due to related parties                    20,705       73,079       11,819

  Accrued interest payable on
   convertible debentures                  179,538      187,661      174,869
  Convertible debentures                39,171,881   40,944,188            -
                                      ------------ ------------ ------------

      Current liabilities               41,983,020   43,419,973    5,620,448
Non-current
  Convertible debentures                         -            -   36,646,543
  Deferred income tax liability          8,000,000    8,000,000    8,600,000
                                      ------------ ------------ ------------
      Non-current liabilities            8,000,000    8,000,000   45,246,543
                                      ------------ ------------ ------------

Shareholders' equity
  Capital stock                        239,610,642  245,260,695  217,204,514
  Reserves                               4,699,078    4,774,831    7,100,512
  Equity component of convertible
   debentures                            4,945,008    4,945,008    4,945,008
  Equity gain on carried interest        7,400,000            -            -
  Retained earnings                     88,411,485   62,063,922    2,666,515
                                      ------------ ------------ ------------

      Capital and reserves
       attributable to the equity
       holders of the Company          345,066,213  317,044,456  231,916,549
                                      ------------ ------------ ------------

  Non-controlling interest in
   subsidiary                                    -            -    6,776,100
                                      ------------ ------------ ------------

Total liabilities and shareholders'
 equity                               $395,049,233 $368,464,429 $289,559,640
                                      ============ ============ ============

Approved on February 13, 2012 by the Directors:

       "Stephen J. Kay"       Director      "W. Michael Smith"  Director
------------------------------            ----------------------
        Stephen J. Kay                       W. Michael Smith

 
INTERNATIONAL MINERALS CORPORATION
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE
 INCOME
(Expressed in United States dollars)
For the three and six month periods ended December 31 (Unaudited)

                          3-Month       3-Month       6-Month       6-Month
                           Period        Period        Period        Period
                       12/31/2011    12/31/2010    12/31/2011    12/31/2010
                     ------------  ------------  ------------  ------------

ROYALTY INCOME
  Royalty income     $  1,342,793  $  1,191,653  $  2,524,946  $  2,012,035
  Depletion of
   royalty interest      (429,668)     (149,089)     (881,096)     (262,094)
  Net proceeds tax        (67,139)      (59,583)     (126,247)     (100,602)
                     ------------  ------------  ------------  ------------
    Net royalty
     income               845,986       982,981     1,517,603     1,649,339
                     ------------  ------------  ------------  ------------

INCOME FROM
 ASSOCIATE
  Equity income from
   associate           13,448,800    16,425,307    28,538,000    25,671,826
  Joint venture
   monitoring costs      (177,110)      (39,870)     (232,212)     (113,295)
  Amortization of
   non-reimbursable
   costs                 (180,367)     (111,466)     (360,734)     (360,733)
                     ------------  ------------  ------------  ------------
    Net income from
     associate         13,091,323    16,273,971    27,945,054    25,197,798
                     ------------  ------------  ------------  ------------

EXPENSES
  Amortization             13,252         8,796        24,843        17,434
  General
   exploration            (16,888)        7,503        23,609        17,169
  Interest and
   financing costs        536,184       976,191     1,097,992     1,923,174
  Investor relations      196,504       233,231       386,864       357,542
  Office and general      209,887       126,627       565,369       322,666
  Professional fees       323,763       117,199       326,245       194,111
  Salaries and
   benefits               283,484       277,672       525,296       567,749
  Stock-based
   compensation            81,040       105,838       174,739       317,908
  Transfer agent and
   listing fees            38,326         7,444        87,656        49,747
  Travel                   48,842        84,675        85,022        98,768
                     ------------  ------------  ------------  ------------
    Total expenses     (1,714,394)   (1,945,176)   (3,297,635)   (3,866,268)
                     ------------  ------------  ------------  ------------

OTHER ITEMS
  Foreign exchange
   (loss) gain           (770,799)     (701,719)    1,032,910      (698,009)
  Unrealized gain
   (loss) on
   securities held-
   for-trading            432,106     1,107,687      (261,412)    1,952,476
  Gain on sale of
   interest in
   mineral property             -     2,361,579             -     2,361,579
  Interest income         136,650        41,757       291,507        77,779
  Gain on settlement
   of debt                      -         5,717             -         5,717
  Write-off of
   resource
   properties             (60,463)   (2,296,639)      (60,463)   (2,296,639)
  Recovery of
   resource
   properties                   -       777,280             -       777,280
                     ------------  ------------  ------------  ------------
    Total other
     items               (262,506)    1,295,662     1,002,542     2,180,183
                     ------------  ------------  ------------  ------------

Income before taxes    11,960,409    16,607,438    27,167,564    25,161,052

Withholding tax          (820,000)            -      (820,000)            -
                     ------------  ------------  ------------  ------------

Net and
 comprehensive
 income after taxes    11,140,409    16,607,438    26,347,564    25,161,052
                     ============  ============  ============  ============



Earnings per common
 share - basic       $       0.09  $       0.14  $       0.22  $       0.22
                     ============  ============  ============  ============
Earnings per common
 share - diluted     $       0.09  $       0.14  $       0.22  $       0.21
                     ============  ============  ============  ============

Weighted average
 number of common
 shares outstanding
 - basic              120,467,808   117,870,479   120,427,588   116,562,399
Weighted average
 number of common
 shares outstanding
 - diluted            126,942,725   119,051,197   127,010,765   117,383,847
                     ============  ============  ============  ============

 
INTERNATIONAL MINERALS CORPORATION
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(Expressed in United States dollars)
For the three and six month periods ended December 31 (Unaudited)

                             3-Month      3-Month      6-Month      6-Month
                              Period       Period       Period       Period
                               Ended        Ended        Ended        Ended
                          12/31/2011   12/31/2010   12/31/2011   12/31/2010
                        ------------ ------------ ------------ ------------

CASH FLOWS FROM
 OPERATING ACTIVITIES
  Net income for the
   period               $ 11,140,409 $ 16,607,438 $ 26,347,564 $ 25,161,052
  Add non-cash items:
    Amortization              13,252      (39,219)      24,843      (26,913)
    Depletion of royalty
     income                  429,668      149,089      881,096      262,094
    Stock-based
     compensation             81,040      105,838      174,739      317,908
    Unrealized foreign
     exchange loss
     (gain)                  505,062    2,081,120   (1,565,952)   2,077,410
    Unrealized (gain)
     loss on investments    (432,106)  (1,107,687)     261,412   (1,952,476)
    Write-off of
     resource properties      60,463    2,296,639       60,463    2,296,639
    Interest and
     financing costs         536,184    1,027,712    1,097,992    1,974,695
    Equity income from
     associate           (13,448,800) (16,425,307) (28,089,200) (25,671,826)
    Amortization of non-
     reimbursable costs      180,367      111,466      360,734      360,733
    Gain in sale of
     ownership interest            -   (2,361,579)           -   (2,361,579)
    Add cash item: Cash
     distributions
     received from
     associate            12,000,000   20,000,000   28,000,000   20,000,000

  Changes in non-cash
   working capital
   items:
    Decrease (increase)
     in receivables         (703,270)  (1,037,099)   3,054,435    2,112,473
    Decrease (increase)
     in prepaid expenses
     and deposits              9,147      130,435      (24,797)     126,126
    Increase in accounts
     payable                  13,905    1,148,958       64,289            -
    Decrease in due from
     related parties         374,770            -      374,770            -
    Decrease in accrued
     severance and
     payroll costs           (96,166)  (2,099,122)     (96,717)  (2,616,552)
    Increase (decrease)
     in due to related
     party                    (6,348)       3,035      (52,374)       9,120
  Net cash provided by
   operating activities   10,657,577   20,591,716   30,424,497   22,068,903
                        ------------ ------------ ------------ ------------


CASH FLOWS FROM
 FINANCING ACTIVITIES
    Proceeds from the
     issuance of common
     shares                  361,973   22,567,985      669,360   22,608,369
    Convertible
     debenture interest
     payment              (1,097,992)  (1,099,780)  (1,097,992)  (1,099,780)
                        ------------ ------------ ------------ ------------

    Net cash provided by
     (used in) financing
     activities             (736,019)  21,468,205     (428,632)  21,508,589
                        ------------ ------------ ------------ ------------

CASH FLOWS FROM
 INVESTING ACTIVITIES
  Resource property
   expenditures           (5,377,472)  (5,710,312) (13,493,375) (10,795,134)
  Investments in
   associate                       -  (10,000,000)           -  (10,000,000)
  Purchase of
   investments                     -            -     (157,165)    (148,054)
  Purchase of property
   and equipment            (101,700)           -     (132,020)      (6,105)
  Reclamation /
   environmental bonds             -            -            -       (3,407)
  Purchase of treasury
   stock                  (6,610,331)           -   (6,610,331)           -
                        ------------ ------------ ------------ ------------

  Net cash used in
   investing activities  (12,089,503) (15,710,312) (20,392,891) (20,952,700)
                        ------------ ------------ ------------ ------------

Change in cash and
 equivalents for the
 period                   (2,167,945)  26,349,609    9,602,974   22,624,792
Cash and equivalents,
 beginning of period      97,897,981   25,374,527   86,127,062   29,099,344
                        ------------ ------------ ------------ ------------

Cash and equivalents,
 end of period          $ 95,730,036 $ 51,724,136 $ 95,730,036 $ 51,724,136
                        ============ ============ ============ ============

 
INTERNATIONAL MINERALS CORPORATION
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN
 SHAREHOLDERS' EQUITY
(Expressed in United States dollars, except share amounts)
DECEMBER 31, 2011 (Unaudited)


                          Share Capital
                                                        Equity
                                           Reserves   component
                                          for share          of
                 Number of        Share       based convertible
                    shares      capital    payments        debt
              ------------ ------------ ----------- -----------
Balance July
 1, 2010       115,242,581 $217,204,514 $ 7,100,512 $ 4,945,008
Issued on
 exercise of
 options           592,500    3,961,328  (1,319,104)          -
Issued on
 private
 placement       3,655,746   20,000,000           -           -
Share issuance
 costs                   -      (33,856)          -           -
Stock-based
 compensation            -            -     317,908           -
Inmaculada
 contribution
 loss                    -            -           -           -
Sale of
 controlling
 interest in
 Quellopata              -            -           -           -
Net income for
 the period              -            -           -           -
              ------------ ------------ ----------- -----------
Balance
 December 31,
 2010          119,490,827 $241,131,986 $ 6,099,316 $ 4,945,008
              ------------ ------------ ----------- -----------
Issued on
 conversion of
 debentures          2,616       18,570           -           -
Issued on
 exercise of
 options           804,120    4,110,139  (1,356,470)          -
Stock-based
 compensation            -            -      31,985           -
Net income for
 the period              -            -           -           -
              ------------ ------------ ----------- -----------
Balance June
 30, 2011      120,297,563 $245,260,695 $ 4,774,831 $ 4,945,008
              ------------ ------------ ----------- -----------
Issued on
 conversion of
 debentures          5,813       40,425           -           -
Issued on
 exercise of
 options           179,500      919,853    (250,493)          -
Purchase of
 treasury
 stock                   -   (6,610,331)          -           -
Stock-based
 compensation            -            -     174,739           -
Equity gain on
 carried
 interest                -            -           -           -
Net income for
 the period              -            -           -           -
              ------------ ------------ ----------- -----------
Balance at
 December 31,
 2011          120,482,876 $239,610,642 $ 4,699,078 $ 4,945,008
              ------------ ------------ ----------- -----------


                  Equity
                    gain                                  Non-
              on carried     Retained              controlling        Total
                interest     earnings        Total    interest       equity
              ---------- ------------ ------------ ----------- ------------
Balance July
 1, 2010      $        - $  2,666,515 $231,916,549 $ 6,776,100 $238,692,649
Issued on
 exercise of
 options               -            -    2,642,224           -    2,642,224
Issued on
 private
 placement             -            -   20,000,000           -   20,000,000
Share issuance
 costs                 -            -      (33,856)          -      (33,856)
Stock-based
 compensation          -            -      317,908           -      317,908
Inmaculada
 contribution
 loss                  -   (1,421,000)  (1,421,000)  1,421,000            -
Sale of
 controlling
 interest in
 Quellopata            -            -            -  (8,197,100)  (8,197,100)
Net income for
 the period            -   26,582,052   26,582,052           -   26,582,052
              ---------- ------------ ------------ ----------- ------------
Balance
 December 31,
 2010                  - $ 27,827,567 $280,003,877 $         - $280,003,877
              ---------- ------------ ------------ ----------- ------------
Issued on
 conversion of
 debentures            -            -       18,570           -       18,570
Issued on
 exercise of
 options               -            -    2,753,669           -    2,753,669
Stock-based
 compensation          -            -       31,985           -       31,985
Net income for
 the period            -   34,236,355   34,236,355           -   34,236,355
              ---------- ------------ ------------ ----------- ------------
Balance June
 30, 2011              - $ 62,063,922 $317,044,456 $         - $317,044,456
              ---------- ------------ ------------ ----------- ------------
Issued on
 conversion of
 debentures            -            -       40,425           -       40,425
Issued on
 exercise of
 options               -            -      669,360           -      669,360
Purchase of
 treasury
 stock                 -            -   (6,610,331)          -   (6,610,331)
Stock-based
 compensation          -            -      174,739           -      174,739
Equity gain on
 carried
 interest      7,400,000            -    7,400,000           -    7,400,000
Net income for
 the period            -   26,347,564   26,347,564           -   26,347,564
              ---------- ------------ ------------ ----------- ------------
Balance at
 December 31,
 2011         $7,400,000 $ 88,411,485 $345,066,213 $         - $345,066,213
              ---------- ------------ ------------ ----------- ------------