Inmaculada project looking good for Hochschild and Int’l Minerals

International Minerals (IMZ-T) has received a positive feasibility study for its 40%-owned Inmaculada underground gold-silver project in southern Peru, where it anticipates annual gold and silver production totalling 194,000 oz. gold-equivalent on 100% project basis starting in December 2013.

The study, prepared by consultants Ausenco, outlines a 3,500- tonne-per-day underground operation, mining proven and probable reserves of 7.8 million tonnes grading 3.4 grams gold per tonne and 120 grams silver per tonne.

International Minerals and 60% joint-venture partner and operator Hochschild Mining expect to pour 124,000 oz. gold and 4.2 million oz. silver from the mine each year over an initial seven-year mine life. An estimated 49,600 oz. gold and 1.68 million oz. silver each year would be attributable to International Minerals.

The feasibility study calculates a pre-tax net present value for the project of US$181 million using a 5% discount rate, US$1,100 per oz. gold and US$18 per oz. silver. Initial capital costs total US$315 million, with Hochschild required to contribute the first US$100 million toward feasibility study costs and project development. It has spent US$11.5 million so far. Subsequent costs will be funded 60% by Hochschild and 40% by International Minerals.

The two companies partnered to fast track Inmaculada in late 2010 following a joint-venture at the Pallancata silver mine, 25 km to the north. International Minerals has a 40% stake in that mine, which began production in 2007 and is now the world’s fifth-largest primary silver mine. International Minerals earned US$14.9 million from its stake last quarter, and has received nearly US$100 million since production began.

The Inmaculada study comes on the heels of a positive preliminary economic assessment (PEA) for International Minerals’ wholly owned Converse gold project in northern Nevada, released before Christmas.

The Converse study outlined a 160,000-oz.-per-year, 14-year open-pit gold mine, with a full feasibility study for Converse anticipated later this year.

A feasibility study for International Minerals’ wholly owned Goldfield gold project in southern Nevada is expected by mid-2012. A PEA for Goldfield completed in 2007 by the project’s previous owner, Metallic Ventures – which International Minerals acquired in 2010 – outlined an open-pit, 50,000-oz.-gold-per-year operation.

Rio Blanco, the company’s former flagship gold-silver project in Ecuador, is also at the feasibility stage. International Minerals first completed the study in 2006 and updated it in 2009, but is awaiting crucial permits and agreements with the government following 2008 mining permit suspensions in the country.

Although it is one of only three mining companies negotiating production contracts with the Ecuador’s socialist government, deadlines have been repeatedly pushed back with no clear end in sight.

The company also holds a royalty on Barrick Gold‘s (abx-t, abx-n) Ruby Hill gold mine in Nevada, providing US$1.2 million in royalty revenues last quarter.

The various assets have helped strengthen International Minerals’ balance sheet to its strongest-ever position, with cash and equivalents increasing to a record US$98 million as of Sept. 30.

According to data compiled by the Financial Times, five analysts cover the company, with three saying “hold,” one rating it “outperform” and another recommending it as a “buy.” Adam Graf, an analyst at investment bank Dahlman Rose, has a $10.22-price-target buy rating for the stock. He raised it from $8.26 in mid-December after the positive PEA at Converse, as well as the rising gold price.

Shares of International Minerals have dropped over the past nine months, alongside those of many other mining companies. They last traded for $5.72 at presstime on Jan. 11, 2012, down from an all-time high of $8.22 in April 2011. Following the Inmaculada feasibility study’s release on Jan. 11, company shares slipped 5¢.