Highcliff Metals Corp. (IMAHF)

[Dobie Lama]

http://www.imineralsinc.com/s/NewsReleases.asp?ReportID=426272

Nov 03, 2010
i-minerals inc. Announces Positive Results of the Pre-Feasibility Study for its Kelly's Basin Project in Latah County, Idaho USA.
After Tax (33.6%) NPV6% US$61 million
After Tax IRR 19%
Initial Capital Costs $45 million; Life of Mine Capital costs $56 million
25 year mine life with 0.44:1 strip ratio
4.75 year payback

Vancouver, B.C. (November 3, 2010) -- i-minerals inc. (TSX.V: IMA; Pink Sheets: IMAHF) ("the Company") is pleased to announce estimated probable Mineral Reserves of 10.455 million short tons and the updated status of its Preliminary Feasibility Study ("PFS") for the Kelly's Basin Deposit. The PFS covers one of two deposits of economic interest located on the Company's wholly-owned Helmer-Bovill property in Latah County, Idaho, USA. The PFS supporting the Mineral Reserve estimate presented in this press release was managed by SRK Consulting (US) Inc. ("SRK") in Lakewood, Colorado, who also completed the resource modeling and estimation. Tetra Tech ("TT") was commissioned by the Company to complete geotechnical, environmental and site reclamation engineering and design. Roberts & Schaefer ("R&S) was commissioned to complete the design for the planned processing and product packaging facilities.

Dr. Bart Stryhas, PhD., CPG Principal Resource Geologist, an independent Qualified Person as defined by Canadian National Instrument 43-101 ("NI 43-101"), completed the Mineral Resource estimate from which the Mineral Reserve estimate was prepared. Mr. Bret Swanson, BE Mining, MAusIMM, an independent Qualified Person as defined by Canadian National Instrument 43-101 ("NI 43-101") prepared the Statement of Mineral Reserves presented herein.

The PFS has been completed by SRK, TT, and R&S and will be filed on SEDAR (at www.sedar.com) in its entirety as required. All values presented in this press release are in US imperial units and 4Q 2010 US dollars.

Statement of Mineral Reserves

The Mineral Reserve estimate prepared and reported by SRK, under the supervision of Mr. Swanson, and using the September 23, 2010 resource model at an aggregate feldspar and quartz product price of US$107.23 per ton and a cut-off grade based on a Loss on Ignition less than 2.5%. This is summarized in the following table. The project is estimated to produce about 7 million short tons of feldspar and quartz products.

Table 1: Statement of Mineral Reserves, Kelly's Basin Project (as of 21 October 2010)


Grade
Products

Classification
Ore(1)
(kst)
Fe2O3 (%)
K2O (%)
Na2O
(%)
Si02
(%)
LOI(2)
%)
Sodium
Feldspar(3)
(kst)
Potassium
Feldspar(3)
(kst)
Quartz(3)
(kst)

Probable










Kelly's Basin
9,946
1.13
3.35
4.14
72.70
0.93
4,774

1,790

WBL Tailings(4)
509
-
-
-
-
-

92
214

Total
10,455
-
-
-
-
-
4,774
92
2,004


Reserves assume 100% mining recovery at 0% dilution. LoM Stripping ratio for Kelly's Basin is 0.44st waste : 1.00st ore.
Kelly's Basin ore is based on Loss on Ignition (LOI) grade less than 2.5%. WBL Tailings based upon 0% cut-off grade.
Sodium Feldspar and Quartz product tons from Kelly's Basin are based on ore mass recoveries of 48% and 18%, respectfully. Sodium Feldspar and Quartz product tons from WBL Tailings are based on ore mass recoveries of 18.1% and 42%, respectfully.
For WBL Tailings, Fe2O3, K2O, Na2O and SiO2 grades are accounted for in the calculation of sodium feldspar and quartz production.

Results of the Pre-Feasibility Study

The PFS was assumed a weighted average product price - for sodium feldspar, potassium feldspar and quartz -- of $107.23/ton as supported by a market study completed by i-Minerals. Production highlights are tabulated below.

Table 2: Production Highlights
Parameter
Value

Mineral Reserves
10,455 kst

Na-Spar, K-Spar, & Quartz Production
6,870 kst

Average Annual Production Rate
275 kst

Process Throughput Rate (nominal)
1,100 tons ore per day

Overall (all products) Process Recovery
66%

Stripping Ratio (waste:ore)
0.44

Mine Life
25.3 years


On an after-tax basis, technical-economics indicate an NPV6% of US$61million with an IRR of 19%. Payback will occur 4.75 years from the start of production. Economic results are summarized below.

Table 3: Economic Results
Description
LoM Value (US$000s)
Unit Cost (US$/ton product

Gross Revenue
$737,000
$107.23

Freight & Marketing
($61,000)
($8.90)

Royalties
($22,000)
($3.10)

Gross Income
$654,000
$95.20

Mining Costs
($116,000)
($16.90)

Processing Costs
($218,000)
($31.70)

G&A Costs
($8,000)
($1.10)

Operating Costs
($341,000)
($49.70)

Operating Margin
$313,000


Mine Capital
($1,400)
-

Process Capital
($47,800)
-

Tailings Capital
($4,600)
-

Owner Capital
($2,100)
-

LoM Capital
($56,000)
-

Taxes
($94,000)
-


($150,000)
-

CASH FLOW
$163,000
-

NPV6%
$61,000
-

IRR
19%
-


The Kelly's Basin Project is an advanced stage development project located in north-central Idaho. Kelly's Basin together with the WBL Primary Clay deposits represent the largest deposits of high quality feldspar, quartz, kaolin and halloysite in the Western United States.

"A lot of effort has gone into optimizing the Mineral Reserves as the pit design had to factor in the impacts of a short diversion of an intermittent stream," commented Roger Kauffman, President and CEO of i-minerals inc. "When all the factors are incorporated to end up with a strip ratio of only 0.44:1, it provides for attractive mining economics. These results together with the pending results of the WBL Primary Clay deposits Preliminary Economic Analysis paint a very bright future for our Helmer-Bovill property."

i-minerals inc.

per: "Roger Kauffman"

Roger Kauffman,
President & CEO

Contact:
i-minerals inc.
Barry Girling
877-303-6573 or 604-303-6573
Email: [e-mail]