International Minerals to Acquire Ventura Gold

• Press Release
• Source: International Minerals Corporation
• On 11:00 pm EDT, Wednesday September 23, 2009

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--International Minerals Corporation (TSX:IMZ - News) and (SIX:IMZ) (“International Minerals”) and Ventura Gold Corporation (TSX-V:VGO - News) (“Ventura”) jointly announce today that they have entered into a binding letter agreement (the “Agreement”) whereby International Minerals will acquire, in an all-share transaction, all of the issued and outstanding shares of Ventura by way of a statutory plan of arrangement (the “Transaction”).

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Through the Transaction, International Minerals will acquire Ventura’s 51% ownership (and the right to earn a 70% interest) in the Inmaculada gold-silver property in southern Peru, located approximately 25 km southwest of International Minerals’ 40%-owned Pallancata silver-gold mine. International Minerals intends to aggressively advance the Inmaculada Project towards completion of a feasibility study in order to earn a 70% interest in the property. The remaining property interest in Inmaculada is held by Hochschild Mining plc (“Hochschild”), International Minerals’ partner at the Pallancata Mine.

Details of the Transaction:

• Under the Transaction, Ventura shareholders will receive one International Minerals common share for every 10 Ventura common shares held, or 0.1 International Minerals shares for every one Ventura share held. Based on today’s respective International Minerals and Ventura closing prices, the consideration is valued at C$0.43 per Ventura common share, representing a 23% premium to Ventura’s closing share price on September 23, 2009 and a 37% premium based on the 15-day volume weighted average share price for Ventura’s shares. As a result of the Transaction, all existing Ventura share purchase warrants and stock options will be acquired or assumed by International Minerals and adjusted on the basis of the same share exchange ratio. The total value of the Transaction is approximately C$64.6 million on a fully diluted basis (approximately US$60 million).
• International Minerals will issue approximately 13.7 million of its common shares to Ventura shareholders pursuant to the Transaction, representing approximately 12.8% of International Minerals’ total post-Transaction issued and outstanding shares of 106.7 million. International Minerals’ fully diluted share capital will increase to approximately 117.7 million, based on the additional International Minerals’ options and warrants resulting from the assumption by International Minerals of the Ventura convertible securities.
• Ventura will receive a loan in the principal amount of up to US$2.0 million from International Minerals to enable it to continue its ongoing drill program at Inmaculada (the “Loan”). Other than as noted herein, the Loan will bear no interest. The Loan, together with interest accrued thereon at a rate of 10% per annum, will be immediately repayable should Ventura accept a superior proposal.
• Ventura’s financial advisor, National Bank Financial Inc., has provided a preliminary verbal opinion to the Independent Committee of the Board of Ventura that, as of the date hereof, the consideration to be offered to Ventura shareholders pursuant to the Transaction is fair, from a financial point of view, to the holders, other than International Minerals, of common shares of Ventura.
• The Agreement provides for a non-solicitation covenant on the part of Ventura, subject to customary "fiduciary out" provisions that entitle Ventura to consider and accept a superior proposal together with a right in favour of International Minerals to match any superior proposal.
• A break fee of US$500,000 is payable by Ventura to International Minerals in the event that a superior unsolicited offer is accepted by Ventura and is payable by International Minerals to Ventura in the event that International Minerals determines not to proceed with the Transaction.
• The Transaction is subject to, among other things, receipt of regulatory, court and shareholder approval, completion of legal due diligence and completion of definitive documentation. The Agreement contemplates the completion of due diligence and of definitive documentation by October 31, 2009.
• Post Transaction, International Minerals’ balance sheet will show approximately US$44 million in cash, working capital of US$42 million and approximately US$32 million in long-term debt (related to International Minerals’ convertible debentures).

Shareholder Approval

The Transaction must be approved by at least 66 2/3 % of the votes cast by shareholders of Ventura at a special meeting of holders of common shares. The Ventura shareholder meeting to consider the Transaction is expected to be held on or about December 17, 2009 (the “Meeting”) with the Transaction anticipated to close shortly thereafter. Further details of the Transaction will be included in the Management Information Circular to be filed with the regulatory authorities and mailed to Ventura shareholders in connection with the Meeting.

The Board of Directors of Ventura, having received the unanimous recommendation of its committee of independent directors (the “Independent Committee”), is recommending that holders of Ventura common shares vote in favour of the Transaction.

The Board of Directors and officers of both companies that hold Ventura shares have indicated they will vote those shares in favour of the Transaction.

The Transaction, which, was approved by the independent directors of both companies, constitutes a “related party transaction” under Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions) (the “Instrument”) by virtue of International Minerals providing certain administrative and exploration management services to Ventura pursuant to service agreements with Ventura. However, as the fair market value of the consideration issued under the Transaction does not exceed 25% of IMZ's market capitalization and as VGO is listed solely on the TSX Venture Exchange, the Transaction is exempt from the valuation requirements of the Instrument.

Compelling Value of the Business Combination

Stephen Kay, President and Chief Executive Officer of International Minerals, said, “The Ventura transaction is an initial and important step in our corporate strategy to grow International Minerals and build greater value and upside for our shareholders. By combining with Ventura we will add the exciting Inmaculada Project in mining-friendly Peru to our project development and exploration pipeline.

“We consider Inmaculada to be one of the best new precious metal discoveries in recent years and we are firmly convinced that Inmaculada will eventually prove to be another Pallancata-style mining operation. We intend to commit the full strength of our technical and development expertise and strong balance sheet to aggressively advance Inmaculada to the feasibility stage to achieve a 70% interest well ahead of the September 2013 deadline stipulated in the joint venture agreement with Hochschild.”

Eric Edwards, President and Chief Executive Officer of Ventura, added, “The combination with International Minerals provides an immediate and attractive premium to Ventura shareholders. It also provides our shareholders with an opportunity to continue to participate through their shares of International Minerals in:

• accelerated resource expansion upside and maximizing value at the Inmaculada property;
• the growth of a strong precious metal producer with cash flow and key joint venture relationships;
• a focus on Peru and other parts of the Americas; and
• greater exposure to rising gold and silver prices.”

Mr. Edwards continued, “In addition, this transaction, with the associated $2.0 million loan facility from International Minerals, resolves Ventura’s immediate financing requirements so that we can continue with the ongoing, successful drilling program at Inmaculada. We understand that International Minerals intends to accelerate the drill programs in 2009 and 2010 and to complete a feasibility study as soon as possible.”

Inmaculada Project

The Inmaculada property hosts multiple, classic, low-sulfidation epithermal vein systems, located near a well-known mining district and 25 km southwest of the Pallancata silver-gold mine, jointly owned by International Minerals (40% interest) and Hochschild (60% interest).

Since optioning the property from Hochschild in 2007, Ventura’s drilling to date has focused primarily on the Angela Vein, one of the more than 11 known significant vein systems identified so far on the 14,672-hectare Inmaculada property. These veins are relatively under-explored and are exposed on surface for more than 25 km in aggregate strike length.

In January 2009, Ventura defined an initial mineral resource estimate for the Angela Vein based on approximately 15,000 meters (“m”) of core drilling that is detailed in an independent National Instrument 43-101 compliant technical report available at www.sedar.com. The estimated inferred resources comprise 483,000 ounces of gold and 16.6 million ounces of silver, contained in 3.7 million tonnes at 4.0 grams per tonne (“g/t”) gold and 139 g/t silver (on a 100% basis) at a cut-off grade of 3.0 g/t gold equivalent. These resources represent 690,000 gold equivalent ounces using a gold-silver ratio of 80:1 and metal prices per ounce of $750 for gold and $12.00 for silver and the then estimated metallurgical recoveries of 90% for gold and 70% for silver. Metallurgical testwork is underway to verify these recovery rates.

In August 2009, Ventura announced initial results from a follow-up 7,000 m core drilling program on the Angela Vein, including one of the best drill intercepts to date with an estimated true width of 11.0m at an average grade of 4.1 g/t gold and 324 g/t silver (including 4.5 m grading 6.7 g/t gold and 554 g/t silver).

The new drill results have extended the strike length of the Angela Vein to more than 1,100 m and to a depth of approximately 450 m below surface. The deposit remains open at depth and along strike to the northeast. An updated mineral resource estimate is expected in early 2010.

The Inmaculada Project is a joint venture with Compañia Minera Ares S.A.C., a wholly-owned subsidiary of Hochschild. Ventura is the project operator and has already earned a 51% interest and can acquire a 70% interest by completing a feasibility study at its sole cost by September 2013 and by issuing 2.0 million Ventura common shares to Hochschild over a five year period.

The technical information in this release has been reviewed by the respective qualified persons of International Minerals and Ventura: Nick Appleyard, Technical Manager and Mark Cannuli, Exploration Manager.

Advisors

Legal advisor to International Minerals is Axium Law Corporation, Vancouver, Canada, and to Ventura is Gowling Lafleur Henderson LLP, Vancouver, Canada.

The financial advisor to Ventura is National Bank Financial, Vancouver, Canada.

About International Minerals

International Minerals has been listed on the Toronto Stock Exchange since 1994 and the Swiss Stock Exchange since 2002. The company is a silver-gold producer (since 2007), explorer and developer with growing low-cost silver production and reserves from its 40%-owned Pallancata Mine in Peru, one of the top-10 primary silver mines in the world. International Minerals estimates Pallancata’s production (100% project basis) at 7.0 million ounces of silver and 25,000 ounces of gold at total cash costs of US$6.50 per ounce of silver, net of gold by-product credit, in 2009, rising to approximately 10.0 million ounces of silver and 35,000 ounces of gold in 2010.

International Minerals has other interests in projects in Peru and Ecuador, including the Rio Blanco gold-silver underground project and the Gaby gold project, both in Ecuador. The Company has a solid balance sheet with approximately $44 million in cash.

International Minerals currently holds 504,923 common shares of Ventura, representing 0.37% of the issued and outstanding share capital of Ventura.

About Ventura

Ventura is an exploration and development company focused on expanding the NI 43-101 compliant initial resource estimate at its 51%-owned Inmaculada gold-silver project in Peru and advancing it towards a feasibility study in order to earn a 70% interest. Ventura also holds strategic investments with pre-IPO exploration companies and listed junior companies with exploration properties in some of the major gold belts around the world and currently has a total of nine equity investments.

Ventura has three directors on its 5-member board of Directors who are directors and/or senior officers of International Minerals and, accordingly, the board of directors of Ventura created an independent committee of the two independent directors to review this transaction and conduct discussions with International Minerals.

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Cautionary Statement:

The Gold Institute calculation of total cash costs are non-Canadian GAAP financial measures, which International Minerals management believes are useful in measuring operational performance, and also any forward-oriented financial information provided may not be appropriate in relation to Canadian GAAP reporting. Please refer to International Minerals’ financial statements and notes.

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 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 estimates of production, total cash costs, mine life, resources, and dates related to the transaction, the Agreement and the transaction closing. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties such as: risks in attaining ramped-up production and processing rates, risks of cost escalation, risks of estimating mineral resources and reserves, variances between mineral reserves and actual mineral production and other risks and uncertainties detailed in International Minerals’ Renewal Annual Information Form for the year ended June 30, 2008 and in Ventura’s Management Discussion and Analysis for the year ended March 31, 2009, which are available at www.sedar.com under the respective company name. International Minerals and Ventura disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

For further Information, contact:
International Minerals
Wendy Yang, (1) 303-357-4863
Vice President of Investor Relations
or
In Switzerland
Oliver Holzer, +41 (0) 79 402 39 33
www.intlminerals.com
or
Ventura Gold
Eric Edwards, (1) 303-357-4862
President and Chief Executive Officer
www.venturagold.com