I-Minerals Inc. (the "Company") announces that further to the Company's press release of August 15, 2013, I-Minerals has received initial results from the testing of the core from the first 17 holes completed on Kelly's Hump. Sixteen of 17 holes intersected significant thickness of primary clay with the 17th intersecting an inclusion of country rock, masking the true thickness of the favorable lithology.
Of the 16 holes that returned significant intervals of primary clay, nine returned strong concentrations of halloysite with thicknesses ranging from 5 to 30 feet with halloysite concentrations (of the total rock mass) ranging from 11% to 19%. These data show an average thickness of the halloysite-rich areas at approximately 19.7 feet with the average concentration of halloysite being 13.7%.
Kelly's Hump is a major prospective ridge immediately east of the Middle Ridge area within I-Minerals' Helmer-Bovill property. A new mineral lease acquired in June 2013 forms a key portion of Kelly's Hump. The majority of the halloysite resources defined in the January 2013 Prefeasibility study were on the Middle Ridge.
In keeping with the mining parameters utilized in the January 2013 Prefeasibility study, initial metallurgical work to assess the halloysite concentrations was only undertaken on the top 50 feet of the 17 holes. The Phase 1, wide-spaced drilling, has identified four readily accessible areas of strong halloysite concentrations covering a cumulative area of approximately 77 acres (31 hectares).
As noted in the Company's August 15, 2013 press release, the January 2013 Prefeasibility study (after tax NPV6 $150 million; 28% IRR; 3 year payback; $67 million initial CAPEX; $84 million life of mine CAPEX including sustaining capital), assumed that defined halloysite reserves were only sufficient to support about 10 years of halloysite production. The success at Kelly's Hump in identifying multiple areas containing wide areas of significant concentrations of halloysite is expected to provide halloysite reserves for the entire +20 year mine life when the Prefeasibility study is updated. The January 2013 Prefeasibility study assumed that once halloysite reserves were mined out and halloysite production ceased, kaolin production would commensurately increase. Given that halloysite will be a higher value product than kaolinite, having halloysite reserves, in addition to the already defined potassium feldspar, high pure quartz and kaolinite across the entire 20 year mine life is expected to have a positive impact on the economic valuation as the project moves towards feasibility.
"The quick success at Kelly's Hump has been very encouraging," stated Thomas Conway, President and CEO of I-Minerals. "Not only are we seeing strong concentrations of halloysite - selectively up to three times higher than the average in the Prefeasibility Study, but the halloysite appears to be noticeably whiter than that encountered elsewhere on the property. Needless to say the results exceed all expectations."
Infill drilling in the Middle Ridge areas has been successfully completed. Metallurgical separations and halloysite estimations are currently on going at the University of Idaho. All of this infill drilling was focused on upgrading known areas containing appreciable halloysite concentrations from a probable reserve to a proven reserve.
With the success of the Phase 1 drilling at Kelly's Hump drilling, the Phase 2 drill program is underway. Drill collar locations have been received from SRK Consulting (USA) Inc. for 200-foot spacings. Additional infill drilling should be sufficient that the completion of all holes as set out by SRK would result in a measured resource which could ultimately be upgraded to a proven reserve once a mine plan can be configured to reflect the updated results of the current Prefeasibility study. Drill collar locations are being surveyed and a second drill rig has been mobilized to the property in order to complete the drill program in a timely fashion.
A. Lamar Long, CPG, is a qualified person ("QP") for I-Minerals Inc. and has reviewed and approved the contents of this release.
I-Minerals is developing multiple deposits of high purity-high value halloysite, quartz, potassium feldspar and kaolin at its strategically located Helmer-Bovill property in western Idaho. A 2013 Prefeasibility Study completed by SRK Consulting (USA) Inc. highlights the potential of the Helmer-Bovill property: after tax NPV6 of $150 million; 28% IRR; 3 year payback and $67 million initial CAPEX; $84 million CAPEX including life of mine sustaining capital. Ongoing development work is focused on upgrading the probable reserve to a proven reserve as the Company moves through the feasibility process towards production.