International Minerals Signs Agreements with Chinese Company for Financing and Construction of Rio Blanco and Gaby Gold Projects in Ecuador

International Minerals Corporation (TSX: IMZ) (SWX: IMZ) (Toronto and Swiss stock exchanges: "IMZ” or "the Company”) is pleased to announce that the Company has signed Memoranda of Understanding ("MOUs”) with a Chinese company, China CAMC Engineering Co., Ltd. ("China Co.”) for the financing and construction of IMZ’s Rio Blanco and Gaby gold projects in Ecuador (the "Projects”).

IMZ currently holds a 100% interest in the Rio Blanco project and variable interests in the mineral concessions comprising the Gaby project, ranging from 51% to 100%.

Based on the terms of the MOUs for the Projects (see page 2 for details), China Co. would:

• Arrange the required production debt financing for the Projects through one or more Chinese financial institutions (the "Lender”); and
• Construct and deliver turn-key mining operations for the Projects, based on an industry-standard Engineering, Procurement and Construction (EPC) contract.

The transaction remains subject to a number of conditions, including (a) the receipt of the necessary permits for construction of mining and processing facilities at the Projects in Ecuador; (b) Canadian regulatory approvals; and (c) the completion of definitive documentation providing for the production financing and EPC contract, the latter with a targeted completion date of January 31, 2011.

IMZ’s President and CEO, Stephen Kay stated: "We are very pleased to sign these MOUs with China Co., who have a well-established reputation for designing, engineering and constructing high-quality, turn-key industrial projects worldwide. We look forward to working with China Co. to expedite the financing, construction and commencement of production at the Rio Blanco and Gaby deposits.”

The key aspects of the MOUs are summarized below, with the final amount of financing required for the Projects remaining subject to final engineering and design work by China Co.

The projected time-line for construction of the Projects is dependent on several factors:

• At Rio Blanco, a feasibility study has already been completed (February 2006) and detailed engineering is 90% complete. Approval of the Environmental Impact Study ("EIS”) for construction of a mine was well-advanced prior to the suspension of all exploration activities in Ecuador by the Ecuadorian government in March 2008. The EIS approval process is expected to resume shortly and it is hoped that approvals can be received by IMZ in the first half of 2011. It is anticipated that the earliest that production could commence at Rio Blanco would be late in 2013 or early 2014 and is dependent upon the negotiation of a production contract for the project, as required under the Ecuadorian Mining Law.
• At Gaby, although a preliminary feasibility study has been completed by IMZ with an estimated 6.9 million gold ounces in the measured and indicated resource category (4.1 million ounces attributable to IMZ), the time line to production will be longer than Rio Blanco because a feasibility study remains to be completed before permitting can commence.

Below are the key parameters of the MOUs signed with China Co.:

A finders fee is payable to an arms length third party in connection with facilitating the financing arrangements, payable as follows upon drawdown of funds from the Lender: (a) 5% of the first US$300 million; (b) 3% of the next US$600 million and (c) 2% of any additional funding.

About the Rio Blanco Project

Below are the key parameters of the Rio Blanco project based on (a) the results of an independent feasibility study and subsequent independent NI 43-101 compliant technical report, both dated January 30, 2006; and (b) internally-updated operating and capital costs announced in a news release dated February 19, 2009:

• High-grade epithermal, gold-silver vein deposit.
• Proven & probable reserves: 605,000 ounces ("ozs”) gold and 4.3 million ounces ozs silver, contained in 2.2 million tonnes ("Mt”) at 8.8 gram per tonne ("g/t”) gold and 62 g/t silver.
• Estimated average annual production: approximately 70,000 ozs gold and 400,000 ozs silver.
• Total cash costs: approximately $300/oz gold (after silver by-product credit).
• Initial mine life: 7.5 years at 800 tonnes per day ("tpd”) production (underground).
• Capital expenditure ("capex”): Approximately $165 million, comprising $120 million estimated initial capex and $45 million in estimated working/sustaining capital.
• Internal Rate of Return ("IRR”): 32% at $1,000/oz gold and 46% IRR at $1,300/oz gold.
• Life-of-mine cash flow: approximately $246 million at $1,000/oz gold and $405 million at $1,300/oz gold.

About the Gaby Project

Below are the key parameters of the Gaby project (on a 100% project basis) based on the results of a January 29, 2009 internally-prepared addendum to the independent Preliminary Feasibility study dated February 11, 2008 (which generated an independent NI 43-101 compliant technical report dated March 26, 2008):

• Low grade gold porphyry deposit.
• Measured and indicated resources: 6.9 million ozs gold contained in 356 Mt at 0.6 g/t gold (59% attributable to IMZ).
• Inferred resources: 2.9 million ozs gold contained in 143 Mt at 0.6 g/t gold (62% attributable to IMZ).
• Estimated average annual production: approximately 330,000 ozs gold.
• Total cash costs: approximately $700/oz gold.
• Initial mine life: 16 years at 60,000 tpd production (open pit).
• Initial capital expenditure: Estimated at approximately $1.0 billion.
• Internal Rate of Return ("IRR”): 11% at $1,000/oz gold and 20% IRR at $1,300/oz gold.
• Life-of-mine cash flow: approximately $900 million at $1,000/oz gold and $3 billion at $1,300/oz gold.

The technical information reported in this news release was reviewed and approved by IMZ’s Qualified Person, VP of Corporate Development, Nick Appleyard.

About International Minerals

International Minerals is a silver-gold producer and developer with silver and gold production from its 40%-owned Pallancata Mine in Peru, one of the top-10 primary silver mines in the world. Production of approximately 10 million ounces of silver and 33,000 ounces of gold (on a 100% project basis) is estimated by IMZ in calendar year 2010.

IMZ also owns a 40% interest in the Inmaculada gold-silver project in Peru and majority or 100% ownership interests in development stage gold projects in Nevada (Goldfield and Converse) and Ecuador (Rio Blanco and Gaby). IMZ also owns a 3% net smelter return (NSR) royalty from Barrick’s Ruby Hill gold mine in Nevada, which produced approximately 100,000 gold ounces in 2009.

IMZ is listed on the Toronto Stock Exchange (since 1994) and the Swiss Stock Exchange (since 2002).

About China CAMC Engineering Co., Ltd. and China National Machinery Industry Corporation

China CAMC Engineering Co., Ltd, is a publicly-traded company listed on the Shenzhen Stock Exchange in China and is a majority-owned subsidiary of China National Machinery Industry Corporation (SINOMACH).

China CAMC Engineering Co. Ltd’s principal business is focused on the engineering, design, equipment procurement and construction (EPC) of turn-key industrial projects both in China and internationally, including South America. The scope of these EPC contracts covers an eclectic mixture of projects, including: power generation, engineering, transportation, water, food, textiles, telecommunications, petrochemical and agricultural.

SINOMACH has the most diversified business range in China’s machinery industry with 55 wholly owned subsidiaries. Its services cover a wide range of sectors including mining, metallurgy, energy, construction, aerospace, automobile, finance, engineering and shipbuilding.

Cautionary Statement:

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 estimates of capital and operating costs; economic returns; timing and significance of future cash flows and revenue from the project; timing and outcome of the announced transaction; and timing and scale of production and processing; and resource estimates. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties such as: risks relating to estimates of production and processing rates; risks relating to estimates of mineral resources; risks relating to capital and operating costs; risks relating to obtaining mining and environmental permits; mining and development risks; risk of commodity price fluctuations; political and regulatory risks; risks of timing and completion of complex financing and construction transactions; and other risks and uncertainties detailed in the Company’s Renewal Annual Information Form for the year ended June 30, 2010, 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.