Pallancata 43101 Report

Pallancata Project
Peru

Technical Report

October 25
th
, 2005

Prepared By: Mark Cannuli
M.Sc., P.Geol

For: International Minerals Corporation
7950 E. Acoma Drive Suite 211
Scottsdale, Arizona, 85260, USA
2
Table of Contents

1 Summary.......................................................................................................................... 5
2 Introduction and Terms of Reference............................................................................. 7
3 Disclaimer....................................................................................................................... 7
4 Property Description and Location................................................................................. 7
4.1 Area of Property........................................................................................................ 7
4.2 Location of Property................................................................................................. 8
4.3 Claim numbers or Names.......................................................................................... 9
4.4 Nature and Extent of Title......................................................................................... 9
4.5 Survey....................................................................................................................... 9
4.6 Location of Mineralized Zones............................................................................... 10
4.7 Royalties and Payments.......................................................................................... 10
4.7.1 Pallancata, Pallancata No. 1 and Virgen del Carmen No.1............................. 10
4.7.2 Oro Vega 500................................................................................................... 11
4.7.3 Tucsa 2002, Pallancata 2002, La Tranca 2003 and Oro Vega 800.................. 11
4.7.4 Pacapausa Concessions.................................................................................... 11
4.7.5 Mining Royalty................................................................................................ 12
4.8 Environmental Liabilities........................................................................................ 12
4.9 Permits.................................................................................................................... 12
5 Accessibility, Climate, Local Resources, Infrastructure and Physiography.................. 12
5.1 Topography, Elevation and Vegetation.................................................................. 12
5.2 Access..................................................................................................................... 12
5.3 Proximity to Population Centre.............................................................................. 13
5.4 Climate.................................................................................................................... 13
5.5 Sufficiency of Surface rights.................................................................................. 13
6 History.......................................................................................................................... 13
6.1 Prior Ownership...................................................................................................... 13
6.2 Type, Amount, Quantity and Results of Exploration............................................. 13
6.2 Historical Mineral Resource................................................................................... 14
6.3 Production............................................................................................................... 15
7 Geological Setting......................................................................................................... 15
8 Deposit Type................................................................................................................. 16
9 Mineralization............................................................................................................... 16
10 Exploration.................................................................................................................. 18
10.1 Results of Surveys and Investigations.................................................................. 18
10.1.1 Pallancata Zone.............................................................................................. 18
10.1.2 Mariana Zone................................................................................................. 21
10.1.3 San J avier Zone.............................................................................................. 23
10.2 Interpretation of Exploration Information............................................................ 23
10.3 Statement Regarding use of Contractors to Carry out Exploration...................... 23
10.4 Statement Regarding Data Reliability.................................................................. 24
11 Drilling........................................................................................................................ 24
11.1 IMCs Phase 1 Core Drill Program....................................................................... 28
11.2 IMCs Phase 2 Core Drill Program....................................................................... 28
11.3 Pallancata Zone Drill Results................................................................................ 28
3
11.4 Mariana Zone - Core Drill Results........................................................................ 34
11.5 San J avier Zone Drill Results............................................................................... 34
11.6 Relationship between Sample Length and True Thickness in Drill-holes............ 35
12 Sampling Method and Approach................................................................................ 35
12.1 Description of Sampling Methods........................................................................ 35
12.1.1 Core Drilling.................................................................................................. 35
12.1.2 Rock Chip Sampling...................................................................................... 35
12.2 Drilling, Sampling or Recovery Factors............................................................... 36
12.3 Sample Quality...................................................................................................... 36
12.4 Controls to sample length..................................................................................... 36
13 Sample Preparation, Analyses and Security............................................................... 36
13.1 Sample Preparation conducted by IMC................................................................ 36
13.2 Details Regarding Sample Preparation and Analysis........................................... 36
13.3 Summary of Quality Control ................................................................................ 37
13.4 Authors Opinion.................................................................................................. 37
14 Data Verification.......................................................................................................... 38
14.1 Quality Control and Data Verification.................................................................. 38
14.2 Author Verification............................................................................................... 38
14.3 Limitations on Data Verification.......................................................................... 39
14.4 Reasons for any Failures to Verify Data............................................................... 39
15 Mineral Processing and Metallurgical Testing............................................................ 39
16 Mineral Resource and Mineral Reserve Estimates...................................................... 39
16.1 Drill Hole Density................................................................................................. 39
16.2 Specific Gravity.................................................................................................... 40
16.3 Methodology......................................................................................................... 41
16.4 Grade Cutting........................................................................................................ 41
16.5 Interpretation and Interpolation............................................................................ 42
17 Other Relevant Data and Information.......................................................................... 45
18 Interpretation and Conclusions.................................................................................... 45
19 Recommendations........................................................................................................ 45
20. References................................................................................................................... 47
21. Certificate of Qualified Person................................................................................... 48

Table of Figures

Figure 1, Regional Location Map........................................................................................8
Figure 2, Pallancata Project Area.......................................................................................10
Figure 3, Geology of the Pallancata Area..........................................................................15
Figure 4, Pallancata Drill Hole Location Map...................................................................25
Figure 5, Mariana Drill Hole Location Map......................................................................26
Figure 6, San J avier Drill Hole Location Map...................................................................27
Figure 7, Flow Chart for Conventional Sample Preparation and Analysis .......................37
Figure 8, Probability plot of greater than 150 g/t Silver assays.........................................41
Figure 9, Drill Section 20,000 with geology and interpreted mineralized outlines...........43

4
Table of Tables

Table 1 Pallancata surface sampling results......................................................................19
Table 2, Mariana Surface Sample Results.........................................................................22
Table 3, Drilling Summary................................................................................................24
Table 4, Pallancata IMC Phase 1 drill results....................................................................30
Table 5, Pallancata, IMC Phase 2 drill results...................................................................33
Table 6, Mariana, IMC Phase 2 drill results......................................................................34
Table 7, San J avier, IMC Phase 2 drill results...................................................................34
Table 8, Control samples...................................................................................................38
Table 9, Specific Gravity Measurements from Pallancata Diamond Drilling...................40
Table 10, Sectional Polygonal Resource Estimation.........................................................44
Table 11, Resource Summary............................................................................................44

5
1 Summary

This technical report summarizes the exploration programs carried out by International
Minerals Corporation (IMC) on the Pallancata silver-gold property in southern Peru
from J uly 2002 to present. IMC holds the Pallancata property through its wholly-owned
Peruvian subsidiary, Minera Oro Vega S.A.C. (Oro Vega).

The Pallancata property is located approximately 520 km southeast of Lima, in the
department of Ayacucho. IMCs property position currently totals 11,252 hectares
(approximately 113 sq km) in 19 mineral concessions. The primary property (Pallancata)
comprises eight concessions: three are held under the terms of an option-to-purchase
agreement with a local Peruvian individual, and five concessions were claimed directly
by Oro Vega. An additional 11 concessions (the Pacapausa property) are held under a
recently signed (J une 20, 2005) option agreement with Southwestern Resources Corp. To
date no exploration work has commenced by IMC on the Pacapausa property.

IMCs exploration programs to date at Pallancata have included geological mapping,
surface and underground rock sampling and two phases of core drilling (in 2003-2005).
Prior to IMCs activities on the property, Pallancata has seen little modern exploration
with only historical workings from the Spanish Colonial era being present as small open-
pits and partly-accessible, underground workings. More recently, the underlying
property owner worked the main Pallancata vein on a small scale sporadically in the
1970s and 1980s but no production records are available.

The Pallancata property hosts a low-sulfidation precious metal epithermal system of
probable mid-Miocene age within Tertiary volcanics and intrusives. Silver and gold
mineralization is present in a complex array of vein structures, breccias (both
hydrothermal and tectonic), stockworks and silicified zones up to 40m wide in places, but
more typically in the 0.5 3.0m range. Vein structures comprise stockworks and vein
breccia with typical epithermal textures and commonly contain bonanza-type silver and
gold grades, especially in West Pallancata (West Breccia zone). The mineralization is
generally sulfide poor and includes ruby silver (pyrargyrite / proustite), argentite, pyrite,
marcasite, electrum, and rarely, native gold and galena.
All the rock types in close proximity to the vein zone display strong silicification. Clay
alteration (illite - smectite) is pervasive, but due to the pumice content of the volcanics in
the area, it is difficult to differentiate the clay alteration from diagenetic alteration.

Precious metal mineralization is present over a surface area of some 20 sq km.
Vertically, the epithermal system has a known extent of 500m, from an elevation of
4,700m in the north to 4,200m in the central part of the target area. The main target vein
(Pallancata) currently extends for approximately 1.7km in strike length, with a width of
up to 40m, including the intensely silicifed wall rocks.

6
IMC conducted an initial sampling program in J uly 2002 consisting of 60 rock panel and
channel samples which returned assay results ranging from trace to 6.3g/t gold and <0.2
g/t to 2,310g/t silver.
In a more extensive follow-up program in early 2003, IMC collected a further 231
surface and underground rock chip and channel samples from the vein and enclosing
wallrocks, with values ranging from <0.2 g/t to 4,380 g/t silver and 0.01 g/t to 22.0 g/t
gold. In December 2003, IMC completed a Phase 1 core drilling program comprising 17
holes totaling 2,490m. Of the 17 drill holes, 14 tested the central section of the main
Pallancata vein structure and an initial three drill holes tested a brecciated and
stockworked zone, designated the West Breccia Zone, located along the western
extension of the main Pallancata vein. Drill assay results from this Phase 1 program
included 1.9m at 2,480 g/t silver in PAC-9, and 2.8m (estimated true width) at 1,022 g/t
silver with 3.6 g/t gold in PAC-4, confirming the high-grade, locally bonanza, nature
of mineralization in the complex Pallancata vein system. The drilling also identified a
different style of high-grade silver-gold mineralization in the West Breccia zone carrying
a noticeably higher gold content than the main Pallancata vein.
Based on the encouraging results from the Phase 1 drilling program, a Phase 2 core
drilling program comprising 51 holes totaling 13,497m was completed by IMC in J une
2005. Drill assay results included 6.6m (estimated true width) at 2,107 g/t silver and 11.8
g/t gold, including 2.6m at 4,243 g/t silver and 25.7 g/t gold in PAC 20, and 12.8m
(estimated true width) at 989 g/t silver and 1.3 g/t gold in PAC 26.

In early 2004, IMC geologists discovered high-grade epithermal vein mineralization in
the Mariana vein located some 800m to the north of the Pallancata vein. A total of 72
rock channel samples taken from accessible Spanish colonial workings along the 350m
exposed strike length of the vein gave results ranging from 72 g/t to 8,240 g/t silver and
0.3 g/t to 26.7 g/t gold, averaging 802 g/t silver and 2.7 g/t gold.

To the north of the Mariana Vein, the San J avier Zone comprises two sub-parallel
epithermal veins. During the initial sampling program, IMC collected a total of seven
surface rock chip samples and one dump grab sample from this area, which reported
values from 4 g/t to 377 g/t silver and 0.04 g/t to 3.8 g/t gold. Several previously
inaccessible underground and surface workings (also dating back to the Colonial era)
were located by IMC.

IMC has calculated an Inferred Resource estimate (as defined by NI 43-101) for the main
Pallancata zone, excluding the Mariana and San J avier Zones. Mineralization remains
open to the west and east and at depth to the west. Due to the relative paucity of drill-
hole data at this time, the resource was estimated on a simple polygonal basis on cross-
sections using length-weighted average grades to generate a silver and gold grade for
each polygon. The Inferred Mineral Resource for the main Pallancata zone is
approximately 38.6 million ounces silver and 147,000 ounces gold contained within 2.7
million tonnes of material at a grade of 445 g/t silver and 1.7 g/t gold based on uncut
silver and gold grades utilizing a cut-off of 150 g/t silver to define the polygons. The
7
Inferred Resource is not a mineral reserve and does not have demonstrated economic
viability.

2 Introduction and Terms of Reference

At the request of Stephen Kay, President and CEO of International Minerals Corporation
(IMC) this report has been written to fulfill IMCs obligation to file a technical report
as described in NI 43-101. The author has completed a review of all prior technical
reports that are relevant to the location, infrastructure, project history, geology, past and
present exploration activities, results of major studies, and quality assurance and quality
control.

This technical report covering International Minerals Corporations Pallancata property
has been compiled to conform to the disclosure and reporting requirements established by
Canadian Securities AdministrationNational Instrument 43-101, Companion Policy 43-
101CP and Form 43-101F1.

The author visited the property on Oct 10
th
and 17
th
2005 and has thoroughly reviewed
data in IMCs Lima, Peru office.
3 Disclaimer

The author has not verified reports, opinions or statements concerning legal,
environmental, political or other issues relevant to the technical report. No responsibility
is assumed for the accuracy of such items that were furnished by other parties and the
author makes no personal warranties or representations concerning such information
whatsoever.

All information adopted for use in this report by the author was obtained from sources
considered to be reliable and it is believed to be true and correct.

Any opinions or interpretations expressed in this report are personal to the author and are
not meant to be furnished herein as anything other than opinions or interpretations and
any party relying on such opinions or interpretations does so at their own risk. The
authors do not make any warranty that recommendations for further work will be either
successful or profitable.

4 Property Description and Location

4.1 Area of Property

8
IMCs property position currently totals 11,252 hectares (approximately 113 sq km) in 19
concessions. Three concessions are held under terms of an option-to-purchase agreement
with Sr J avier Triveo Pinto Pallancata (432 hectares), Pallancata No.1 (450 hectares)
and Virgen del Carmen No.1 (350 hectares). Eleven concessions are held under terms of
option agreement from Southwestern Gold Paca I (800 hectares), Paca II (800
hectares), Paca III (1,000 hectares), Paca IV (400 hectares), Paca V (877 hectares), Paca
VI (800 hectares), Paca XV (798 hectares), Paca XXXV (900 hectares), Paca XXXVI
(200 hectares), Paca XXXVII (958 hectares) and Paca XXXVIII (400 hectares). The five
remaining concessions were claimed directly by Oro Vega from the Peruvian government
Tucsa 2002 (600 hectares), Pallancata 2002 (573 hectares), Oro Vega 500 (205
hectares), La Tranca 2003 (110 hectares) and Oro Vega 800 (600 hectares).
4.2 Location of Property

The Property is located approximately 520km southeast of Lima in the Coronel
Castaeda District, Parinacochas Province, Ayacucho Department. It is approximately
180 km southwest of Cuzco and 240 km northwest of Arequipa (see Figure 1). The
nearest operating mine, Hochschilds Explorador silver-gold (Selene mine), is located
approximately 10 km to the northeast.

Figure 1, Regional Location Map
9
4.3 Claim numbers or Names

The mineral concessions are identified as Pallancata, Pallancata No.1, Virgen del Carmen
No.1, Tucsa 2002, Pallancata 2002, Oro Vega 500, La Tranca 2003, Oro Vega 800, Paca
I, Paca II, Paca III, Paca IV, Paca V, Paca VI, Paca XV, Paca XXXV, Paca XXXVI, Paca
XXXVII and Paca XXXVIII (see figure 2).

4.4 Nature and Extent of Title

Under Peruvian law, the right to explore for and exploit minerals is granted by way of
mining concessions. A Peruvian mining concession is a property right, independent from
the ownership of land on which it is located. The concession can be defended against
possible claim by third parties, transferred or sold, leased, mortgaged and may be
inherited in families. In general, a mining concession may be subject of any transaction or
contract. Government authorization is not required for this purpose.

IMC holds title to all of the concessions described in Section 4.1. In addition, the
company holds surface rights to 107 hectares.

According to the mining law, the basic unit for newly claimed mineral concessions is 100
hectares and the maximum of 1,000 hectares. The concession is irrevocable and indefinite
as long as its holder fulfills the obligations prescribed by law to maintain them. There is
no limit to the number of concessions that may be held by a company or individual.

From year 2001, the concession holder must pay an annual rent (derecho de vigencia)
of US$3.00 per hectare by J une 30th of each year (previously, and since 1991 it was of
US$2.00 per hectare). The concession holder must sustain a minimum level of annual
commercial production of US$100 per hectare in gross sales within six years of the grant
of the concession. If the concession has not been put into production within that period,
then the concession holder must make an additional payment called Penalty
(Penalidad) of US$6.00 per hectare for the 7th through 11th year following the granting
of the concession and of US$20.00 per hectare thereafter. The concession holder shall be
exempted from the Penalty if the investment made during the previous year was 10 times
the Penalty (i.e.US$60 per hectare per year 7th through to 11th).

4.5 Survey

IMC personnel have surveyed the concession limits of the Pallancata group of
concessions, only 3,300 hectares of photogrametric topography survey has been
performed on the Pacapausa concessions. No external, independent audit of this data has
taken place.

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4.6 Location of Mineralized Zones

The location of known mineral resources relative to the outside property boundaries are
shown in figure 2. There are no waste dumps on the property.

Figure 2, Pallancata Project Area

4.7 Royalties and Payments
4.7.1 Pallancata, Pallancata No. 1 and Virgen del Carmen No.1

In J une and August 2002, Oro Vega entered into option agreements to acquire a 100%
interest in the Pallancata, Pallancata No.1, and Virgen del Carmen No.1 concessions (the
Optioned Concessions). IMC can acquire an initial 75% in the Optioned Concessions
by making cash payments totaling $1,000,000 over 7 years. To date IMC has paid
$127,800, with the remaining option payments of $872,200 due as follows:

11
November 2005 J une 2006 (paid quarterly) $36,000
August 2006 J une 2007 (paid quarterly) $48,000
August 2007 J une 2008 (paid quarterly) $49,950
August 2008 May 2009 (paid quarterly) $50,250
September 2009 $447,200
October 2009 $240,800

IMC can acquire an additional 25% interest in the Optioned Concessions (for an
aggregate total interest of 100%) by paying an additional $600,000 (for an aggregate
payment of $1,600,000) payable as to $837,200 in September 2009 and $450,800 in
October 2009.
4.7.2 Oro Vega 500

The concession was staked by Oro Vega in 2004, however there was a simultaneous
claiming by a third party who declined to participate in a public bid for a payment of US$
3,000 plus a 10% of the claim. Oro Vega in March 2005 purchased this 10% for
US$25,000 and a 3% Net Profits Interest Royalty upon commencement of commercial
production. The Royalty can be purchased at any time by Oro Vega for US$500,000.
4.7.3 Tucsa 2002, Pallancata 2002, La Tranca 2003 and Oro Vega 800

Oro Vega claimed the Tucsa 2002, Pallancata 2002, La Tranca 2003 and Oro Vega 800
mineral concessions directly from the Peruvian government.

4.7.4 Pacapausa Concessions

In J une 2005, Oro Vega entered into an option agreement with Southwestern Resources
to acquire interest in 11 concessions adjacent to the Pallancata claims. The concessions,
Paca I to VI, Paca XV and Paca XXXV to XXXVIII, total 8,000 hectares (80 sq.km).
Oro Vega can earn an initial 50% interest in the property by investing a minimum of $1
million in exploration expenditures (including at least 1,000m of diamond drilling in the
first 18 months) over a period of 66 months. The minimum expenditure schedule is as
follows:

$100,000 during the first 18 months of the agreement (1-18);
$150,000 during the following 12 months (19-30);
$200,000 during the following 12 months (31-42);
$250,000 during the following 12 months (43-54); and
$300,000 during the final 12 months (55-66).

Following vesting, Oro Vega can earn an additional 10% (for an aggregate total of 60%)
by completing a positive feasibility study. Oro Vega can then acquire an additional 10%
(for an aggregate total of 70%) by arranging financing for commercial production. If Oro
Vega elects not to acquire the additional 20%, the project will be financed on a 50/50
12
basis by both parties with customary dilution clauses in case one party elects not to
contribute to an approved program. If either partys articulating interest reaches 15%,
then that partys interest will be converted to a 2% NSR royalty, of which 1% NSR
royalty can be bought at any time for $1,000,000.

4.7.5 Mining Royalty

Once the mine is in production, the concession holder must pay in favor of the Peruvian
State a royalty to be determined in reference to the value of the ore concentrates less the
costs for indirect taxes, insurance, freight and storage in ports. Following ranks apply to
establish the royalty, per year:

a) Up to US$ 60 million dollars 1 %
b) For the excess of US$ 60 millions up to US$ 120 million dollars 2%
c) For the excess of US$ 120 million dollars 3%
4.8 Environmental Liabilities

No environmental Liabilities from previous works on the area
4.9 Permits

In order to complete drillings on Pallancata Oro Vega has obtained the following permits:
October 2003 Permit for 4800m of drilling
August 2004 Permit for 8725m of drilling
May 2005 Permit for Additional 4000m
All these permits were obtained from Ministerio de Energia y Minas of Peru with the
presentation of Environmental Evaluation Studies.

5 Accessibility, Climate, Local Resources, Infrastructure and
Physiography
5.1 Topography, Elevation and Vegetation

Situated in the Western Cordillera of Southern Peru, elevations in the Pallancata property
range from 4,200m in the central part of the property to 4,700m in the Virgen del Carmen
No.1 concession in the north. The project area topography is rugged with substantial
exposure. The elevation, rock exposure, steep slopes and lack of substantial soil cover
result in a lack of major vegetation.
5.2 Access

The preferred method of access to the property (for acclimatization purposes) is via air to
Cuzco and then by ground transportation on a paved road to Izcahuaca in the direction of
13
Nazca. From Izcahuaca the route goes 20 km southeast on a well maintained dirt road
toward Hochschilds Explorador (Selene mine). Before reaching Explorador the route
turns south to IMCs Pallancata camp (a distance of approximately 20 km). Travel time
by road from Cuzco is approximately 8 hours.
5.3 Proximity to Population Centre

The nearest large population centre to the Pallancata Property is the village of Izcahuaca,
40km to the northwest, with a population of approximately 500. Facilities are very
limited.
5.4 Climate

The climate in Pallancata consists of a dry season and wet season. The wettest months
are December to March. Temperatures in Pallancata range from -5C to 20C.

5.5 Sufficiency of Surface rights

IMC has the surface rights for 107 hectares. More will need to be acquired before the
production stage is reached.

Sources of power, water, mining personnel, potential tailings storage areas, potential
waste disposal areas, heap leach pad areas and potential processing sites for any possible
future mining operation would need to be researched.

6 History

6.1 Prior Ownership

The Pallancata, Pallancata No.1 and Virgen del Carmen No.1 concessions were originally
the property of an arms length local Peruvian, Sr. J avier Triveo Pinto. In 2002 Oro
Vega signed an option-to-purchase agreement with this individual.

The Pacapausa property is controlled by the Peruvian subsidiary of Southwestern
Resources Corp. and an option agreement was signed by Oro Vega with Southwestern on
J une 20, 2005.

6.2 Type, Amount, Quantity and Results of Exploration

2002: Prior to acquiring the property, IMC carried out an initial sampling program over
the Pallancata Vein and San J avier zone (in the Virgen del Carmen No. 1 concession)
14
which consisted of 60 rock panel and channel samples. Only two of the rock channel
samples from the main portion of the vein reported significant precious metal values.

2003: Following acquisition of the property, IMC commenced a more extensive
exploration program, which comprised the surveying, rehabilitation and detailed
sampling of 27 previously inaccessible underground workings (many of which date back
to the Spanish colonial era) together with surface rock sampling and geological mapping.
IMC collected a total of 231 surface and underground rock chip and channel samples
from the vein and enclosing wall rocks.

Detailed mapping and sampling of the West Breccia Zone in the western part of the main
Pallancata Vein structure was also carried out in 2003. In total, 23 samples were taken of
vein material from the stockwork zone, and 31 samples from a silicified zone to the west.
Results ranged from trace to 195 g/t silver and trace to 0.7 g/t gold

Following the encouraging results from surface sampling on the Pallancata Vein, IMC
completed its Phase 1 drill campaign totaling 2,490m in 17 core holes, focused on the
main Pallancata Vein structure.

2004: In early 2004, IMCs geologists discovered high-grade epithermal vein
mineralization in the Mariana Vein located some 800m to the north of the western
extremity of the Pallancata Vein. So far, the Mariana Vein has been traced over a strike
length of approximately 350m. A total of 72 rock channel samples were taken from
accessible workings on the vein.

IMCs Phase 2 drill program commenced in August 2004.

Geological consultant, Dr Warren Pratt undertook regional mapping of the property from
10
th
November to 3
rd
December 2004.

2005:

The Phase 2 drill program, which started in August 2004, was completed in J une 2005
comprising 13,497m in 51 core holes. The majority of the holes (39 holes, 11,433m)
were drilled in the main Pallancata Vein structure, with 4 holes (625m) in Mariana and 8
holes (1,440m) in San J avier.

There has been no exploration activity on the Pacapausa property to date by IMC.

Refer to Section 10 of this report for results of exploration.

6.2 Historical Mineral Resource

No mineral resource estimates have previously been undertaken.

15
6.3 Production

There has been no recent commercial production from the property by IMC. There is
evidence to show that the property was exploited in Spanish colonial times, but there are
no records to show grades or volumes. Also, the prior owner attempted small scale
exploitation of the vein, but did not keep any records.
7 Geological Setting

Regionally, the project lies in the Western Cordillera of southern Peru which comprises
principally Cretaceous and Tertiary volcanics and rare sediments, together with Tertiary
intrusives.

Figure 3, Geology of the Pallancata Area
1km
16

Volcaniclastic rocks, including lapilli and crystal tuffs, volcanic breccias and
conglomerates, and volcanic sediments intercalated with andesitic lava flows dominate
the Pallancata project. A massive white rhyolitic tuff lies unconformably on the
volcaniclastics, covering much of the higher ground in the area. Rhyolite stocks have
intruded the volcanics in the north of the area and to the east of the project. On the
Pallancata and Pallancata 2002 concessions, a large porphyritic andesite laccolith is
present at depth.

The Tertiary volcanic rocks in the Pallancata area were deposited in a very active tectonic
environment. There are numerous small- and large-scale examples of profound syn-
depositional changes, controlled largely by active faults. Some of these faults have a
similar northwest-southeast orientation to the Pallancata vein but many others strike
almost north-south. Evidence of instability is widespread, but is strongest in the vicinity
of the main Pallancata Vein structure. This was probably a major zone of collapse: either
part of a caldera margin or linear graben. Where slickencrysts exist on fault planes, they
are invariably sinistral.

Faults and veins form a continuous group of sub-vertical structures with varying degrees
of sinistral strike-slip movement. The remarkable similarities between fault and vein
orientations suggest they were active at the same time.

Alteration and mineralization appear to be controlled by these structures, and high grade
zones (West Breccia Zone) may be related to dilatational portions related to jogs and
bends in these structures.
8 Deposit Type

IMC geologists recognized that the Pallancata mineralization represents a low-sulfidation
precious metal epithermal system. This has been confirmed by the author and supported
by independent thin and polished section petrological work.

Multiple events of mineralization are apparent. The main-stage precious metal
mineralization overprints earlier stages, but may also represent the waning stages of the
same hydrothermal system. Control of the main-stage mineralization is likely to have
been provided by a major northwest-southeast striking fault.

9 Mineralization

IMC has defined 3 principal areas of mineralization extending from San J avier in the
north for over 4km to the southern Pallancata Vein target. Mineralization extends up to
4km in a roughly east-west direction, and the mineralized system has a vertical extent of
approximately 500m.

17
Below are IMCs 3 main zones of interest from north to south. These names are used
throughout this report;

1. San Javier
2. Mariana
3. Pallancata
(a) West Breccia Zone
(b) Central Zone
(c) Suyamarca Zone

Low-sulfidation, epithermal silver-gold mineralization is present in a complex array of
veins, breccias (both hydrothermal and tectonic), stockworks and silicified zones. Vein
zones comprise vein breccia with in-situ clasts of bladed carbonate replacement and
partial leaching. Crustiform and colloform banding is also common. The matrix
generally consists of milky-white to coarse-grained semi-translucent drusy quartz.
Multiple phases of veining are apparent. Breccias range from simple tectonic breccias to
complex multiple-event hydrothermal breccias. These include black silica breccia (rich
in sulfides) to massive white quartz breccias.

The main Pallancata Vein structure is the principal target area and hosts a zone of
complex multiphase veining and faulting that generally has well-defined conduits that
underwent major dilation. The structure pinches, splits and has a sinuous nature. It is
apparent that the vein is en echelon, both horizontally and vertically

The dip is generally sub-vertical, with a downthrow to the south. Alteration changes
from smectite to illite towards the main structure, but it is often hard to define clay
alteration from diagenetic alteration due to the high pumice content of the lapilli tuffs.
There is a distinct silicified halo around the vein which is more prominent on the north
side of the vein. The San J avier and Mariana vein zones also display strong silicified
halos.

The main Pallancata Vein (as investigated to date by IMC) is approximately 1.6 km long
and is up to 40m wide, including the intensely silicified wall rocks. Individual veins or
splays are more typically 0.5m-3.0m wide. Portions of the structure are dominated by in-
situ quartz-altered, bladed carbonate. Elsewhere it shows jigsaw breccia, commonly with
black chalcedonic silica and sulfide fill. Other parts are true hydrothermal breccias with
complex textures and multiple phases of banded chalcedonic silica and euhedral drusy
quartz. Local fossil spirit levels are found (giving an indication of the openness of the
conduit) that are filled by banded sulfide-rich chalcedony and broken crystals that were
flushed into the open spaces.

Much of the high-grade mineralization on the property is seen in the West Breccia Zone.
This zone is located in the western part of the main Pallancata structure, and comprises an
intensely silicified body with a strong stockwork of quartz veins, typically with a strike of
northeast-southwest to north-south. High-grade zones occur where these veins intersect
the northwest-southeast striking main Pallancata Vein structure.
18

The mineralization is generally sulfide-poor and includes argentite, ruby silver
(pyrargyrite / proustite), pyrite, marcasite, galena, electrum and rarely, native gold. Most
of the visible silver mineralization in drill core from the Pallancata Vein occurs within the
massive silica, including silica displaying carbonate replacement textures. In these areas
the silver occurs as argentite and pyrargyrite. Some argentite mineralization occurs with
adularia after an early silicification and brecciation and an intermediate banded
chalcedony phase. There appear to have been multiple episodes of silver deposition in
the Pallancata vein. Shadowy carbonate-replacement texture (the product of the
silicification of laminar calcite) and the presence of adularia testify to the existence of
boiling conditions during vein-breccia formation.

The San J avier and Mariana Zones display similar veining with high-grade silver and
gold mineralization: for example, 0.2m at 1,650 g/t silver and 8.5 g/t gold (PAC-68, San
J avier zone) and 0.35m at 1,260 g/t silver and 3.25 g/t gold (PAC-59, Mariana zone).
10 Exploration
10.1 Results of Surveys and Investigations

IMCs earlier exploration was focused on geological mapping and surface and
underground rock geochemical sampling in the main Pallancata Vein structure. During
2003 and 2004, geological mapping and rock sampling was extended to cover the
northern part of the property (Virgen del Carmen No.1 and Oro Vega 500). This later
program identified the Mariana target based on bonanza silver grades from previously
undiscovered underground workings.

10.1.1 Pallancata Zone

Prior to acquiring the property in 2002, IMC carried out an initial sampling program over
the Pallancata Vein and San J avier Zone (in the Virgen del Carmen No.1 concession)
which consisted of 60 rock panel and channel samples. Assay results ranged from <0.2
to 2,310g/t silver and trace to 6.3g/t gold. Only two of the rock channel samples from an
old surface working in the central part of the Pallancata Vein reported significant
precious metal values: one sample with 2.5m at 2,270 g/t silver with 5.4 g/t gold and
another sample with 2.0 m at 2,310 g/t silver with 6.3 g/t gold.

In early 2003, following acquisition of the property, IMC commenced a more extensive
exploration program, which comprised the surveying, rehabilitation and detailed
sampling of 27 previously inaccessible underground workings (many of which date back
to the Spanish colonial era) together with surface rock sampling and geological mapping.
IMC collected a total of 231 surface and underground rock chip and channel samples
from the vein and enclosing wallrocks, with values ranging from trace to 4,380 g/t silver
and 0.01 to 22.0 g/t gold. All results from the 2003 surface and underground rock
sampling program are listed in table 1 below.
19

In 2003, detailed mapping and sampling of the West Breccia Zone was carried out by
IMC geologists. In total, 23 samples were taken of vein material from the stockwork
zone and 31 samples from a silicified zone to the west. Results ranged from trace to 195
g/t silver and trace to 0.7 g/t gold.

Sample
Code Silver g/t Gold g/t
Sample
P-1 78 0.6 P-117 700 2.5
P-2 241 1.2 P-118 7 0.0
P-3 316 1.3 P-119 540 2.0
P-4 16 0.0 P-120 37 0.5
P-5 5 0.0 P-121 520 2.4
P-6 253 0.2 P-122 49 0.2
P-7 16 0.1 P-123 71 0.4
P-8 3 1.1 P-124 15 0.2
P-9 91 0.3 P-125 3 0.1
P-10 6 0.0 P-126 8 0.0
P-11 29 0.2 P-127 92 0.3
P-12 32 0.1 P-128 12 0.1
P-13 8 0.1 P-129 561 2.5
P-14 6 0.1 P-130 158 0.5
P-15 3 0.0 P-131 253 1.1
P-16 3 0.0 P-132 22 0.1
P-17 17 0.1 P-133 6 0.1
P-18 78 0.2 P-134 4 0.2
P-19 1390 4.1 P-135 949 4.0
P-20 2 0.0 P-136 459 2.3
P-21 2 0.1 P-137 246 1.1
P-22 0 0.0 P-138 429 1.9
P-23 1 0.0 P-139 449 1.9
P-24 1 0.0 P-140 4380 22.0
P-25 1 0.0 P-141 510 2.3
P-26 0 0.0 P-142 3170 13.3
P-27 1 0.0 P-143 1490 6.6
P-28 4 0.4 P-144 5 0.1
P-29 8 0.4 P-145 7 0.0
P-30 8 0.3 P-146 4 0.1
P-31 1 0.0 P-147 2 0.0
P-32 36 0.2 P-148 19 0.2
P-33 12 0.5 P-149 2 0.0
P-34 4 0.0 P-150 38 1.3
P-35 7 0.0 P-151 17 0.5
P-36 9 0.0 P-152 7 0.1
P-37 33 0.2 P-153 19 0.1
20
P-38 0 0.0 P-154 5 0.1
P-39 3 0.0 P-155 98 0.6
P-40 8 0.1 P-156 3 0.0
P-41 6 0.1 P-157 117 0.7
P-42 30 0.1 P-158 44 0.3
P-43 14 0.0 P-159 8 0.1
P-44 3 0.0 P-160 122 0.9
P-45 11 0.0 P-161 5 0.0
P-46 6 0.0 P-162 39 0.1
P-47 23 1.0 P-163 125 0.4
P-48 7 0.1 P-164 122 0.4
P-49 0 48.2 P-165 16 0.1
P-50 3 0.0 P-166 37 0.1
P-51 98 0.3 P-167 254 0.9
P-52 103 0.4 P-168 100 0.4
P-53 35 0.2 P-169 15 0.3
P-54 10 0.1 P-170 11 0.1
P-55 20 0.1 P-171 297 2.9
P-56 52 0.3 P-172 2 1.4
P-57 25 0.3 P-173 9 0.1
P-58 1 0.0 P-174 7 0.1
P-59 3 0.1 P-175 144 0.2
P-60 1 0.0 P-176 342 1.2
P-61 1 0.0 P-177 79 0.3
P-62 221 1.1 P-178 356 1.0
P-63 9 0.1 P-179 114 0.2
P-64 18 0.5 P-180 106 0.2
P-65 8 0.2 P-181 40 0.1
P-66 6 0.1 P-182 61 0.2
P-67 9 0.1 P-183 52 0.1
P-68 5 0.1 P-184 12 0.1
P-69 4 0.1 P-185 7 0.0
P-70 10 0.3 P-186 4 0.0
P-71 530 2.3 P-187 7 0.0
P-72 2610 9.7 P-188 4 0.0
P-73 3640 15.4 P-189 10 0.0
P-74 2700 10.3 P-190 14 0.0
P-75 2160 8.2 P-191 3 0.0
P-76 772 2.2 P-192 11 0.0
P-77 512 2.3 P-193 5 0.0
P-78 54 0.2 P-194 3 0.0
P-79 3370 8.7 P-195 1480 9.5
P-80 89 0.3 P-196 8 0.0
P-81 916 1.1 P-197 6 0.0
21
P-82 17 0.1 P-198 5 0.0
P-83 64 0.4 P-199 46 0.2
P-84 431 2.7 P-200 6 0.0
P-85 13 0.0 P-201 2 0.0
P-86 1970 2.7 P-202 7 0.0
P-87 22 0.0 P-203 2 0.1
P-88 598 3.4 P-204 11 0.1
P-89 4 0.0 P-205 15 0.0
P-90 3 0.0 P-206 9 0.0
P-91 35 0.1 P-207 19 0.3
P-92 251 1.3 P-208 25 0.1
P-93 1560 0.9 P-209 3 0.0
P-94 2290 2.0 P-210 6 0.0
P-95 80 0.3 P-211 2 0.0
P-96 570 0.8 P-212 2 0.1
P-97 566 1.7 P-213 3 0.0
P-98 441 1.3 P-214 1 0.1
P-99 3110 11.6 P-215 9 0.1
P-100 1030 3.5 P-216 5 0.0
P-101 167 0.6 P-217 3 0.2
P-102 97 0.3 P-218 8 0.1
P-103 37 0.1 P-219 9 0.2
P-104 24 0.2 P-220 16 0.2
P-105 75 0.2 P-221 3 0.1
P-106 34 0.1 P-222 19 0.4
P-107 16 0.1 P-223 12 0.2
P-108 69 0.1 P-224 29 0.1
P-109 2 0.0 P-225 640 1.0
P-110 3 0.1 P-226 1150 10.5
P-111 3 0.0 P-227 3060 12.2
P-112 67 0.2 P-228 3240 11.7
P-113 2 0.0 P-229 103 0.4
P-114 56 0.5 P-230 10 0.1
P-115 1335 6.8 P-231 3 0.0
P-116 11 5.6

Table 1: Pallancata surface sampling results

10.1.2 Mariana Zone

In early 2004, IMCs geologists discovered high-grade epithermal vein mineralization in
the Mariana Vein located some 800m to the north of the western extremity of the main
Pallancata Vein. So far, the Mariana Vein has been traced over a strike length of
approximately 350m. A total of 72 rock channel samples taken from accessible workings
22
on the vein averaged 802 g/t silver and 2.7 g/t gold, with individual samples ranging from
72 to 8,240 g/t silver and 0.3 to 26.7 g/t gold, with estimated true widths ranging from
0.30m to 1.20m. Results are listed below (table 2).

Sample
Sample
PM-310 1565 4.8 PM-346 647 2.2
PM-311 498 1.2 PM-347 1745 4.7
PM-312 1700 6.6 PM-348 618 3.0
PM-313 362 0.9 PM-349 1860 5.1
PM-314 8240 26.7 PM-350 490 1.1
PM-315 1190 16.6 PM-351 659 1.5
PM-316 126 0.3 PM-352 924 5.3
PM-317 436 1.4 PM-353 900 2.4
PM-318 265 0.7 PM-354 687 5.3
PM-319 926 1.8 PM-355 750 2.2
PM-320 580 1.2 PM-356 620 1.9
PM-321 404 0.9 PM-357 47 1.1
PM-322 245 0.6 PM-358 713 2.0
PM-323 1025 3.4 PM-359 482 1.2
PM-324 406 0.9 PM-360 128 0.4
PM-325 72 0.2 PM-361 525 1.4
PM-326 733 1.6 PM-362 603 1.7
PM-327 1860 5.1 PM-363 992 3.2
PM-328 490 1.1 PM-364 239 0.5
PM-329 659 1.5 PM-365 530 1.2
PM-330 924 5.3 PM-366 14 0.0
PM-331 900 2.4 PM-367 530 1.2
PM-332 1225 3.2 PM-368 730 1.4
PM-333 1255 2.5 PM-369 238 0.5
PM-334 616 1.2 PM-370 972 2.7
PM-335 833 1.8 PM-371 389 2.3
PM-336 595 1.2 PM-372 337 1.2
PM-337 422 1.1 PM-373 143 0.3
PM-338 703 1.7 PM-374 370 0.8
PM-339 564 1.2 PM-375 524 1.7
PM-340 139 0.4 PM-376 578 1.7
PM-341 328 1.7 PA5026 3 0.1
PM-342 548 1.1 PA5027 630 1.3
PM-343 830 3.1 PA5029 560 1.1
PM-344 1415 4.8 PA5030 5 0.0
PM-345 9 0.0 PA5031 7 0.0

Table 2, Mariana Surface Sample Results

23
10.1.3 San Javier Zone

The San J avier zone is located in the north of the property in the Virgen del Carmen No.1
concession. The mineralized zone comprises two sub-parallel, northeast-southwest
striking veins with a strike length of 650m. In IMCs initial reconnaissance program a
total of seven surface rock chip samples and one dump grab sample from this area
reported values from 4 g/t to 377 g/t silver and 0.04 g/t to 3.8 g/t gold. Several
previously inaccessible underground and surface workings (also dating back to the
Colonial era) were located by IMC.

10.2 Interpretation of Exploration Information

The Pallancata low-sulfidation, epithermal silver-gold mineralization is present in a
complex array of veins, breccias (both hydrothermal and tectonic), stockworks and
silicified zones. Vein zones comprise vein breccia with in-situ clasts of bladed carbonate
replacement and partial leaching. Crustiform and colloform banding is also common.
The matrix generally consists of milky white to coarse-grained semi-translucent drusy
quartz. Multiple phases of veining is apparent. Breccias range from simple tectonic
breccias to complex multiple-event hydrothermal breccias. These include black silica
breccia (rich in sulfides) to massive white quartz breccias.

The mineralization is generally sulfide-poor and includes argentite, ruby silver
(pyrargyrite/proustite), pyrite, marcasite, galena, electrum and rare, native gold.

Much of the high-grade mineralization on the property is seen in the West Breccia Zone
in the western part of the main Pallancata Vein, and comprises an intensely silicified
body with a strong stockwork of quartz veins, typically with a strike of northeast-
southwest to north-south. High-grade zones occur where these veins intersect the
northwest-southeast striking Pallancata structure. The high-grade mineralization occurs
in vein breccia zones with shadowy carbonate-replacement texture, testifying boiling
conditions during formation of the vein breccia, and in zones where multiphase veining
and brecciation is apparent.

To the north of the main Pallancata structure, in the Mariana and San J avier Zones, the
mineralized veins are generally narrower than the Pallancata Vein. The veins, however,
are high-grade and exhibit similar epithermal textures to those seen in the main
Pallancata structure.

10.3 Statement Regarding use of Contractors to Carry out Exploration

IMC personnel carried out all surface geological mapping and sampling together with
drill core logging and sampling.

24
Both phases of drilling were carried out by independent contract drillers (both Canadian
and Peruvian) under the supervision of a Canadian drilling consultant. Sample
preparation and analyses were carried out by ALS Chemex in Lima, Peru using standard
industry practices.

10.4 Statement Regarding Data Reliability

In the opinion of the author, all data obtained by IMC from surface and drill core
sampling, together with surface mapping, core logging and structural interpretation are of
a quality that meets or exceeds industry standards.
11 Drilling

The total meterage drilled by IMC in their 2003-2005 Phase 1 and 2 core drill programs
totals 15,987m in 68 drill holes. A summary for all the drill-hole locations for the target
areas is shown in Table 3 and figures 4 to 6.

Campaign No. Holes Meters Drilled Prospect
IMC Phase 1 17 2,490 Pallancata
IMC Phase 2 51 13,497 All
inc 39 11,433 Pallancata
8 1,440 San J avier
4 625 Mariana

Table 3, Drilling Summary
25
Figure 4, Pallancata drill hole location map
26
Figure 5, Mariana drill hole location map
27
Figure 6, San J avier drill hole location map
28
11.1 IMCs Phase 1 Core Drill Program

Based on detailed geological mapping and rock sampling program, which defined high-grade
zones within the main Pallancata structure, a total of 17 angled core drill holes totaling
2,490m were completed in 2003. Of the 17 holes, 14 tested the central part of the main
Pallancata Vein structure and three holes tested the West Breccia Zone.

Drilling was carried out by Kluane International Drilling Inc., of Vancouver, Canada using a
man-portable rig with HQ and NQ capabilities. This machine was considered to be the most
appropriate for the terrain where drill access roads would have been difficult to build and
may have resulted in excessive environmental disturbance. Instead, narrow trails were
constructed to give access to the escarpment area and drill moves were completed using local
laborers. Water was supplied by gravity feed from local lakes.

11.2 IMCs Phase 2 Core Drill Program

Following the encouraging results from the Phase 1 drilling, IMC commenced a Phase 2 drill
program in August 2004, which was completed in J une 2005. A total of 13,497m were
drilled in 51 drill holes in the Pallancata, Mariana and San J avier zones. Of the 51 holes, 39
were drilled within the main Pallancata structure, with 14 focused on the high-grade West
Breccia Zone. Of the remaining 12 holes, 4 were drilled in the Mariana Zone, and 8 in the
San J avier Zone.

The Phase 2 drilling program was carried out by Bradley Brothers of Rouyn, Quebec,
Canada, also using a man-portable rig with HQ and NQ capabilities.
11.3 Pallancata Zone Drill Results

Results from IMCs Phase 1 program (comprising 17 core holes (PAC-01 to PAC-17)
totaling 2,490m) and which tested the northwest-southeast trending main Pallancata
structure, confirmed the high-grade, locally bonanza, nature of the mineralization in the
Pallancata Vein. The drilling also identified a different style of high-grade silver-gold
mineralization in the West Breccia Zone that carried a noticeably higher gold content than
that generally intersected in the central part of the Pallancata Vein.

IMCs Phase 2 program was completed in J une 2005. An additional 39 core holes (PAC-18
to PAC-56) totaling 11,433m tested the extent of the mineralization along the Pallancata
structure to the east, and also further tested the mineralization intersected in the Phase 1
program in the high-grade West Breccia Zone. Again, intercepts with significant silver and
gold values were reported, notably in the new drill holes in the West breccia Zone (PAC-20,
PAC-23, PAC-51 to PAC-56). PAC-49, the eastern-most drill-hole on the Pallancata Vein,
some 1.4km east of the West Breccia Zone also intercepted significant values, leaving
mineralization still open to the east.

29
The Phase 2 drilling in the West Breccia Zone indicated the possible presence of high-grade
ore shoots at the intercept of north-south striking veins with the northwest-southeast striking
Pallancata structure.

Assay results (uncut values) for all 56 drill holes in the Pallancata Zone totaling 13,923m
(drilled at angles of 40 to 70) for Phase 1 and 2 drill programs are listed in the tables
below.

Drill Hole Interval Length Est. True Silver Gold
(Depth-m) From (m) To (m) (m) Width (m) (g/t) (g/t)
PAC 01 169.03 174.04 5.01 * 455 1.92
includes 172.26 174.04 1.78 * 741 2.87

PAC 02 95.43 103 7.57 4.9 224 1.65
includes 95.43 96.95 1.52 1.0 370 2
96.95 97.93 0.98 0.62 263 2.63

PAC 03 202.74 205.84 3.1 1.98 246 0.04
217.3 219.13 1.83 1.19 466 1.11

PAC 04 69.3 74.45 5.15 3.96 493 1.61
includes 70.82 72.45 1.63 1.26 702 3.61
95.8 99.4 3.6 2.88 1020 5.47
99.4 103 3.6 2.88 141 0.35
103 110.06 7.06 5.66 282 1.13

PAC 05 93.2 95.15 1.95 1.44 254 1.02

PAC 06 56 58 2 1.5 1000 2.59

PAC 07 49.48 53.2 3.72 2.98 369 0.83
96.4 100.28 3.88 2.71 185 0.57

PAC 08 125.46 126.78 1.32 1.11 283 1.11
160 166.25 6.25 3.6 174 0.55

PAC 09 64.82 77 12.18 * 821 3.21
includes 68.88 70.77 1.89 * 2480 9.01
80.8 82.8 2 * 821 2.91
86.74 89.87 3.13 * 1199 6.32
includes 86.74 88.7 1.96 * 1645 8.41

PAC 10 61.42 65.41 3.99 3.6 177 1.18
112.15 114.32 2.17 1.67 744 3.58

PAC 11 no significant intervals
30

PAC 12 21.45 25.18 3.73 3.17 651 1.8
includes 23.35 25.18 1.83 1.56 905 2.32





PAC 17 131.3 137.83 6.53 4.6 930 3.59

*Note PAC 01 & PAC 09 were drilled oblique to the mineralized structure

Table 4, Pallancata IMC Phase 1 drill results

Drill Hole Interval Length Est.True Silver Gold
PAC 18 116.5 120.6 4.1 3.1 361 1.2
129.7 132.1 2.4 1.6 372 1.1
135.4 137.3 1.9 1.4 470 2.2

PAC 19 104.9 112.4 7.5 5.8 382 1.4
includes 104.9 107 2.1 1.6 764 2.7
131.2 135.3 4.1 3.1 337 1.5
131.2 136.9 5.4 3.8 301 1.3

PAC 20 281.7 292.2 10.5 6.6 2,107 11.8
includes 288.2 292.2 4.1 2.6 4,243 25.7

PAC 21 193.7 197 3.3 2.7 265 1.1
237.9 238.2 0.2 0.2 866 3.9

274.7 276.9 2.2 1.3 340 1.4
includes 276.7 276.9 0.2 0.1 1,010 4.3

PAC 22 105.6 109.5 3.9 3 570 2.4
114.6 117.1 2.5 1.8 481 2.8

PAC 23 157.2 161.2 4 2.7 1,455 6.5
includes 157.2 159.3 2.2 1.6 2,320 11.1

190.9 196 5.1 3.4 483 2
includes 190.9 192.8 1.8 1.3 721 2.9

31
204.4 220.2 15.8 11 452 1.7
includes 211.2 213.7 2.5 1.7 752 2.9

PAC 24 171.5 173.4 1.9 1 370 2.2

180.4 186 5.6 3.2 211 0.9


PAC 26 189.2 213.4 24.2 12.8 989 1.3
includes 200 208.6 8.6 4.5 2,163 2





PAC 31 206.7 210.6 3.9 2.2 235 0.3


PAC 33 181.2 181.8 0.7 0.5 629 1.9


PAC 35 130.6 131.3 0.7 0.5 342 0.7



PAC 38 9.5 10.4 0.9 0.6 219 1.7

PAC 39 36 36.7 0.7 0.7 128 1.1

PAC 40 44.1 45.3 1.2 0.5 255 0.5


PAC 42 78.1 80.6 2.5 1.6 160 1.9
99.9 100.3 0.4 0.4 249 1.4

PAC 43 181.4 183 1.6 1.1 201 0.5
includes 0.3 558 1.4

32
PAC 44 117.5 118 0.5 0.4 306 1.8

PAC 45 175.3 175.8 0.5 0.4 401 1.5

184 185.9 1.9 1.2 238 0.8

192.3 194.7 2.4 1.5 339 1.4

PAC 46 46.6 46.9 0.3 0.3 460 1.1

63.8 64.6 0.8 0.6 396 1

68.7 69.5 0.8 0.6 452 1.9

72 72.8 0.9 0.8 1,390 4.3

72 73.7 1.7 1.3 857 2.7

85.2 85.8 0.6 0.5 325 1.1


PAC 48 170 170.4 0.5 0.5 220 0.6
223 224 1 0.9 99 2.2

PAC 49 241.4 242.3 0.9 0.7 382 1.4

PAC 50 393.8 398.7 4.9 3 265 0.2
includes 393.8 395.4 1.6 0.9 412 0.3

PAC 51 249.3 259.7 10.4 7.3 503 3.5
includes 253.8 254.3 0.5 0.4 1,190 6.3
which includes 258.2 258.8 0.6 0.4 1,450 6.2

290.5 292.1 1.7 1.2 2,130 13.9

362.8 363.3 0.6 0.4 912 3.4

432.7 439.6 6.9 3.5 352 1.1
434.7 436.9 2.2 1.1 698 2.4

PAC 52 131.9 132.6 0.7 0.4 671 1.9

160.9 162.6 1.7 1 688 3.4

199.3 203.9 4.6 2.5 662 4.5
includes 201.5 203.9 2.5 1.5 1,009 6.1

227 227.3 0.3 0.2 877 23.7
33

338.6 341.4 2.9 1.7 741 3.2
includes 340.4 341.4 1 0.6 1,485 7.3
344.7 345.7 1 0.6 271 1.6
349.8 350.5 0.7 0.4 1,480 8.8

PAC 53 276.3 286.1 9.9 5.8 481 1.4
includes 276.3 280.4 4.2 2.5 704 2
which includes 278 278.3 0.3 0.2 1,125 2.8

and includes 285.7 286.1 0.4 0.2 996 3.1

PAC 54 143.1 147 3.9 3.2 743 5
includes 145 145.8 0.8 0.7 2,900 20.4

184.5 185.7 1.2 1 517 1.6

223.6 224.1 0.5 0.4 586 2.4

230.1 262 31.9 20.5 461 1.3
includes 231.2 234.5 3.3 2.1 950 1.5
and includes 250.5 256.9 6.5 4.2 833 2.6
which includes 252.8 253.9 1.2 0.8 2,940 7.1

PAC 55 127.4 129.4 2 1.8 931 3.9
includes 127.4 128.4 1 0.9 1,265 5.3
and includes 129.1 129.4 0.3 0.3 1,920 8.1

201.2 202.9 1.7 1.1 448 1.7
includes 201.2 201.4 0.2 0.1 2,470 9.8

211.6 213.6 2 1.3 363 1.9
includes 212.6 213.6 1 0.7 499 2.4

PAC 56 170.3 171.5 1.2 0.9 380 1.8
174.5 177.2 2.8 2.1 363 3.4
187.7 191.8 4.1 1.7 283 1.9
includes 187.7 189.6 1.9 0.8 200 1.8
and includes 190.8 191.8 1 0.4 214 3.2
226 229.7 3.7 2.1 358 3.6
includes 226 227.2 1.2 0.7 422 5.8
and includes 228.2 229.7 1.5 0.8 569 3.9
which includes 228.2 228.5 0.3 0.2 1,640 9.5
365.1 366.6 1.5 1 1,206 6
369.2 371.3 2.1 1.4 1,352 5
375.3 377.7 2.4 1.8 206 0.8
includes 375.3 375.7 0.4 0.3 472 1.9

Table 5, Pallancata, IMC Phase 2 drill results
34

11.4 Mariana Zone - Core Drill Results

IMC did not drill in the Mariana zone during its Phase 1 drill program.

A total of 625m in 4 holes were drilled in 2005 during IMCs Phase 2 program. Significant
silver and gold grades were reported, and, in addition, there remains potential for additional
mineralization along strike. Results (uncut values) for the 4 holes are listed below:

PAC 57 68.4 68.8 0.5 0.4 385 0.86

PAC 59 99.6 100 0.4 0.3 1,260 3.25

PAC 60 89.3 90.6 1.3 1.2 622 1.12

Table 6, Mariana, IMC Phase 2 drill results

11.5 San Javier Zone Drill Results

IMC did not drill the San J avier zone during its Phase 1 program.

In 2005, eight holes were drilled totaling 1,440m during IMCs Phase 2 program. Results
were encouraging with significant silver and gold grades. The strike length of mineralization
is approximately 650m and it is open to the northeast and to the southwest. Results (uncut
values for the eight holes) are listed below.


PAC 62 144.4 144.7 0.3 0.2 2,520 13.25
146.9 147.3 0.4 0.3 1,395 14.3

PAC 63 143.8 144.9 1.1 0.5 575 2.1
148.2 150 1.8 0.9 555 2.17
155.3 155.6 0.3 0.2 383 16.1

PAC 64 121.8 122.9 1.2 0.9 553 3.61

PAC 65 169.1 170.2 1.2 0.7 786 3.05
35
includes 169.1 169.4 0.3 0.2 2,410 9.67
and includes 170 170.2 0.3 0.2 697 2.32


PAC 67 92.9 93.3 0.5 0.4 1,275 8.35
158.9 159 0.2 0.2 246 1.11

PAC 68 12.5 12.8 0.5 0.4 542 3.06
95.6 95.8 0.2 0.2 17 8.51

Table 7, San J avier, IMC Phase 2 drill results

11.6 Relationship between Sample Length and True Thickness in Drill-holes

Drilling orientations used in the IMC drill programs were designed to optimally intersect
both individual vein structures and the overall mineralized envelope of the zones. At times
such intersections were not optimal due to variation in strike of the veins over short
distances. In all 3 zones, the mineralized vein structures are sub-vertical; therefore drill holes
have been orientated approximately perpendicular to strike and with inclinations between 40
and 60.

True widths for core are estimated by the author to be between 50% and 90% of the sample
interval for the inclined holes perpendicular to the mineralization and IMCs estimated true
widths are shown in the above Tables of drill hole results.
12 Sampling Method and Approach

12.1 Description of Sampling Methods
12.1.1 Core Drilling

All core was logged, sampled, photographed and stored in a secure location at IMCs on-site
Pallancata camp. Core was split on site by IMC personnel, using a diamond saw, and one
half of the core was retained on site, and the remainder sent for independent assay. Samples
were sent to ALS-Chemexs Lima laboratory where they were crushed and pulverized. All
assays were undertaken by ALS-Chemex in Lima using conventional atomic absorption
and/or fire assay techniques for gold and silver. High-grade samples were assayed using fire
assay gravimetric finish.
12.1.2 Rock Chip Sampling

36
Rock chip samples were taken over dimensions up to 1m in width with a maximum length of
5m. Multiple rock chip samples were collected covering at least 50% of the sample area.
The total sample weight for each sample is approximately 5kg.

12.2 Drilling, Sampling or Recovery Factors

Drill core recoveries are systematically calculated and recorded on drill logs by IMC
geologists. There are no other known sampling factors that would unduly affect sample
accuracy or reliability.

12.3 Sample Quality

All sampling by IMC personnel is overseen and reviewed by experienced senior personnel
and carried out to meet or exceed current accepted standard industry practices.

12.4 Controls to sample length

Core sampling intervals used are based on a maximum core length of 2m, with geological or
mineralized contacts being used to define a shorter sample length, down to a minimum of
0.2m. Barren rock outside the target zones was typically not sampled.

Rock chip samples typically did not exceed a length of 5m.
13 Sample Preparation, Analyses and Security

See also Section 12.1 for detailed information.
13.1 Sample Preparation conducted by IMC

IMC conducted no part of core sample preparation either in the field or the laboratory, except
for the cutting of the core prior to dispatch to the laboratory.
13.2 Details Regarding Sample Preparation and Analysis

Samples were all sent to ALS-Chemexs Lima, Peru laboratory for preparation using
standard industry practices. Assays of prepared pulps were undertaken by ALS Chemex. All
samples were assayed for gold and silver using conventional atomic absorption and/or fire
assay techniques. Samples over the detection limit were assayed using fire assay gravimetric
finish (see Figure 7). Blind standards of known silver and gold contents (and blanks with
no silver or gold content) were used for every approximately 10 samples for quality control
purposes. Duplicate analyses of the significant mineralized intervals were re-analyzed by
SGS laboratories in Lima, Peru. All standards and duplicates show excellent reproducibility.

37

Figure 7, Flow Chart for Conventional Sample Preparation and Analysis at Pallancata

13.3 Summary of Quality Control

IMC has implemented extensive quality control procedures throughout all phases of the
project and these are summarized extensively in Sections 12 and 13.
13.4 Authors Opinion

Crush Entire Sample
(J aw / Rhino) 10 mesh (2mm)
Store Split 300gm
(Rifle Splitter)
Pulverize
-200 mesh (0.07mm)
30 gm
Fire Assay
g/t Au & Ag
(AAS Finish)
Above Detection Limit
Samples
Fire Assay
Grav Finish
38
It is my opinion, following a review of the sampling methodology, sample preparation
routine and analytical techniques used, that the IMC data are of a high quality that meets or
exceeds current industry standards.
14 Data Verification
14.1 Quality Control and Data Verification

Every 10 samples, a blind standard with known silver and gold content (or blanks with no
silver or gold content) was included for quality control. Six different standard sample pulps
for gold and silver were obtained from Rocklabs Ltd, Auckland, N.Z. The true values for
gold for the six standards were between 1.27 ppm and 6.62 ppm; for silver, between 194 ppm
and 1020 ppm. The coefficients of variation for gold for each of the standards were in the
range of 0.8% to 2.6%; those for silver were in the range of 0.14% to 0.4%.

International Minerals Corp used a 10% +or- cutoff for gold and a 5% +or cutoff for silver
to accept or reject laboratory analytical results for different sample lots. All of the results
obtained fell within these ranges and were deemed acceptable by International Minerals
Corp.

Duplicate analyses from the mineralized intervals were analyzed at SGS Laboratories in
Lima, Peru. All duplicates showed excellent reproducibility.

14.2 Author Verification

The author visited the Pallancata site on October 10 and 17, 2005. Surface and underground
exposures of the Pallancata Vein were visited and the locations of a number of drill collars
were verified.
Drill core was inspected and four random intersections of mineralized core were selected.
These sections were quartered and sent to ALS laboratories in Lima for gold and silver
analysis, using the same method as described in Section 13.2. These results (below) confirm
that the drill core does contain silver and gold mineralization as described in this report.

DDH# Sample Interval Au(ppm) Ag(ppm) Quartered
Sample #
Au(ppm) Ag(ppm)
PAC 20 288.15-290.15 16.3 3,600 Palla-01 22.5 4,697
PAC 26 200.00-201.75 8.6 2,670 Palla-02 8.1 2,537
PAC 46 71.95-72.80 4.3 1,390 Palla-03 2.3 731
PAC 54 144.95-145.75 20.4 2,900 Palla-04 17.1 2,626

Table 8, Control samples
39

I have reviewed the data generated by analyses of standard and blank samples together with
the results of duplicate analyses carried out by second independent laboratories and in my
opinion the quality of the analytical results presented in this report meets or exceeds industry
standards.
14.3 Limitations on Data Verification

None
14.4 Reasons for any Failures to Verify Data

None
15 Mineral Processing and Metallurgical Testing

No such testwork has been completed to date by IMC but will commence in October 2005.

16 Mineral Resource and Mineral Reserve Estimates

This resource estimation is the first such estimate for the Pallancata deposit. Due to the
relatively wide-spaced drill intercepts the initial resource will be classified as Inferred under
the NI 43-101 classification scheme. For a complex vein-style deposit such as Pallancata
significant additional drilling is required in order to re-classify the resource into a higher
(Measured/Indicated) category. Based on drilling to date, a geostatistical analysis of the
required drill spacing for Measured and Indicated Resources will be undertaken before the
end of the year.

The Inferred Resource is not a mineral reserve and as such does not have any demonstrated
economic viability.

The initial resource calculation for Pallancata does not include the Mariana and San J avier
Zones due to insufficient drill data at this time. In addition, the mineralization in the
Pallancata Zone is still open to the east and west along strike, and at depth on the western
margin.

16.1 Drill Hole Density

The Pallancata Vein has been drilled to date based on vertical sections spaced 50m apart,
with an average of two vein intersections per section, covering a vertical extent of over
300m. The most vein intersections on a single section is four, with several sections yet to be
drilled (i.e. no intersections).

40
The average drill density is approximately 50m by 150m, where there is sufficient drilling
and greater where there are sections without drill holes.
16.2 Specific Gravity

Specific Gravity measurements were taken on 490 drill samples, representing all of the
known litho-alteration assemblages. The measurements were made according to the
Archimedes Principle;

1. the dry sample is first weighed in air.
2. the sample is then made impermeable by the addition of paraffin wax.
3. the impermeable sample is then weighed in water
4. SG =Weight in Air/(weight in air weight in water)

For use in the Inferred Resource estimation an average Specific Gravity of 2.33 was applied
to all mineralization.

Rock Type
SG
(g/cm
3
)
Average SG
(g/cm
3
)
Lapilli tuff 2.26
Crystal tuff 2.20
Tuff 2.28
Andesite 2.36
Autobreccia Andesite 2.25
Porphyritic Andesite 2.38

L
I
T
H
O
L
O
G
Y

Andesite Porphyry 2.36
2.30
Stwk in lapilli tuff 2.29
Stwk in crystal tuff 2.28
Stwk in Tuff 2.42
Stwk in porphyritic
andesite 2.45

S
T
R
O
N
G

S
T
W
K

Stwk in andesite
porphyry 2.37
2.36
Vein zone 2.36
Vein breccia 2.35
Silica breccia 2.42
S
T
R
U
C
T
U
R
E

Stwk breccia 2.36
2.37
Tectonic breccia 2.33
FAULTS
Fault zone 2.22
2.28
Average 2.33

Table 9, Specific Gravity Measurements from Pallancata Diamond Drilling
41

16.3 Methodology

Due to the relative paucity of drill hole data so far, the resource was estimated on a simple
polygonal basis on cross sections using length-weighted average grades to generate a silver
and gold grade for each polygon. The simplicity of this technique reflects the level of data
available. When the in-fill drill pattern is more detailed a more advanced methodology such
as inverse distance or kriging will be used to determine the resource estimate.
16.4 Grade Cutting

The silver and gold grades are uncut for this Inferred Resource estimate. Further
geostatistical analyses, based on more data, are required to determine the appropriate grades
for cutting in a more advanced modeling exercise.

As can be seen from the probability plot below (Figure 8) the silver curve starts lose
continuity around 1,700 g/t with a notable kink around 950 g/t, which could indicate the
presence of at least two separate grade populations. This hypothesis needs further
investigation when more data is available.

Figure 8, Probability plot of greater than 150 g/t Silver assays

42

16.5 Interpretation and Interpolation

Geology was defined on the 50m-spaced drill cross sections by IMC geologists in Peru. Data
were then entered digitally into an industry-standard software package (Micromine) so that it
could be used as a guide for grade shell interpretation. The geological cross sections
included the predominant lithological units plus the vein structure, regardless of grade.

Silver mineralization outlines were then defined at an initial 75 g/t cut-off, to aid in defining
the overall shape and continuity of mineralization. Geological boundaries and vein
interpretations were used to guide these outlines. Outlines were extended to match the
geological interpretation, using both adjacent sections and surface mapping and sampling as
guides. Where no other information existed, the outlines were extended approximately 50m.
Using the 75 g/t outlines as a guide, more realistic 150 g/t outlines were drawn and grades
interpolated. Good continuity of mineralization was found at both the 75 g/t and 150 g/t
grade levels.

Silver and gold grades were interpolated into each grade shell using a length-weighted
average of all the intersections within that shell and on that section (Figure 9). Each grade
shell was assigned a specific gravity of 2.33 g/cm
3
(see Section 16.2). A thickness of 50m
was used (half way to next section) except when there was no drilling on an intermediate
section but there was minimum cut-off grade present on both of the adjacent sections. In this
case the adjacent sections were projected into the section without drill coverage.

43

Figure 9, Drill Section 20,000, with geology and interpreted mineralized outlines

{
{
{
TOBA HATUN
LAP TUFF
LAP TUFF17
APH AND
APH AND4
APH AND5
20000_1
20000_ 2
20000_ 3
20000_ 4
P
A
C
0
1
PAC 01
161m
P
A
C
1
8
P
AC
18
503m
P
A
C
5
1
PAC 51
3
12
m
P
A
C
5
4
P
A
C
5
4
0. 2
0. 2
1. 4
1. 0
0. 4
0. 1
1. 0
0. 1
0. 1
1. 1
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0. 3
2. 2
0. 5
0. 2
0. 1
0. 8
0. 1
1. 3
0. 1
0. 3
0. 1
0. 1
0. 1
0. 1
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1. 8
0. 1
0. 1
0. 1
1. 0
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3. 8
1. 1
4. 8
0. 7
6. 3
2. 6 4. 8
6. 2
4. 9 0. 1
0. 3
0. 1
0. 1 0. 1
0. 4 0. 5
13. 9
0. 1
0. 1
3. 4
0. 1
0. 1 0. 5
0. 1
0. 2 0. 4
1. 6
3. 0
0. 6
0. 1
1. 3
0. 1
0. 1
0. 4
0. 1
0. 3
0. 2
0. 1
0. 1
0. 7
0. 1
0. 2
0.1
0. 1 0.1 0. 3
0. 9
20. 4
1.3
0. 1
0. 3
0. 1
0. 1
0. 2
0. 1
0. 1 0. 2
0.1
0. 6
0. 1
0. 1
1. 6
0. 2
0. 8
0.1
1. 1
0. 9
0. 4
0. 1
0. 2
0.2
2. 4
0. 1
0. 1
0. 2
0.2
0. 8
0. 3
1. 7
1.3
4. 5
0. 2
0. 3
3. 7
0. 1
0. 1
0. 1
0.2
2. 1
1. 6
0. 7
1. 4
0.7
1.9
1. 3
7.1
2.0
0. 8
2. 6
0. 5
0.8
0. 9
0. 5
0.6
0. 6
0. 6
1.8
<1 <1 1 1 1 1 1 1 1 2 2 1 1 1 <1 1 1 <1 <1 1 <1 1 <1 1 <1 1 1 1 1 <1 <1 1 1 2 1 1 2 3 7 5 1 2 6 2 3 4 1
1
2
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456
264
7
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2
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207
5 8
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372
4 8
110
470
1 6
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5
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9 1
11 90
107
174
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14 50
919
3 0
5
9
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9
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4 9
21 30
5 1
1 9
4 1
912
1 7
1 0 1 9
1 9
3 3
1 9
2 0
3 1 5 9
4 9
151
4 2
1 3 2 2
8
5
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1 6 1 3
1 5
9 6
277 588
792
176
2 8
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1 5 5
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1
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116
7
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2
155
29
00
233
1
6
4
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9
1
6
1
3
9
7
7
3
3
9
7
6
103
5
7
3
7
517
3
2
145
6
2
3
339
6
5
292
8
3
5
5
6
5
5
1
586
5
6
3
9
5
4
375
950
830
23
10
500
10
90
191
679
979
370
129
9
4
161
7
4
585
402
197
336
129
507
316
29
40
361
181
529
9
9
231
228
112
9
0
9
7
7
122
392
<
1
1 1
<
1
<
1
20000a_ 1
20000a_ 2
20000a_ 3
20000a_ 4
20000a_ 5
4000
4100
4200
4300
4400
4500
4600
4000
4100
4200
4300
4400
4500
4600
4
9
6
0
0
4
9
7
0
0
4
9
8
0
0
4
9
9
0
0
4
9
6
0
0
4
9
7
0
0
4
9
8
0
0
4
9
9
0
0
Li thol ogy Outl i ne Col our Code
Toba Hat un
Lapi l l i Tuf f
Aphani t i c Andesi t e
Andesi t e
Andesi t e Por phyr y
Col our Code Legend
LHS Si l ver Grades and Hatch
<75 g/ t
75 to 150 g/ t
150 t o 500 g/ t
500 t o 1, 000 g/ t
>=1, 000 g/ t
RHS Gol d Grades
<1 g/ t
1 to 5 g/ t
5 to 10 g/ t
10 t o 30 g/ t
>=30 g/ t
Scal e
1: 2500
DATE
J ul y 7t h 2005
SHEET
1 of 15
REF No. J or ge/ Wal t er
Pl ot t ed wi t h MI CROMI NE
Pal l ancat a Pr oj ect
Sect i on 20, 000E
Si l ver and Gol d Gr ades
Mi ner a Or o Vega
APH AND APH AND
44
Sectional Polygonal Inferred Resource for the Pallancata Main Structure
Section
Thickness
meters
Tonnage
(t)
Ag Grade
g/t
Au
Grade
g/t
Ozs Ag Ozs Au % of
Total
Ag
19950 50 120,749 642 2.7

2,492,353

10,482

6%
20000 50 617,692 404 1.6

8,023,141

31,775

21%
20050 50 188,398 342 1.8

2,071,541

10,903

5%
20100 50 221,967 620 3.1

4,424,571

22,123

11%
20150 50 211,752 635 2.3

4,323,070

15,658

11%
20200 50 328,933 407 1.6

4,304,205

16,921

11%
20250 50 39,548 203 0.8

258,114

1,017

1%
20450 75 157,184 922 1.4

4,659,403

7,075

12%
20550 100 199,471 204 0.6

1,308,281

3,848

3%
20650 75 336,563 346 1.5

3,743,980

16,231

10%
20700 50 83,518 315 0.9

845,827

2,417

2%
20750 75 57,609 350 1.0

648,260

1,852

2%
20850 75 59,565 310 1.6

593,668

3,064

2%
21000 50 24,020 521 1.5

402,348

1,158

1%
21700 50 51,299 302 1.1

498,089

1,814

1%
Total 2,698,268 445 1.7

38,604,342

147,477

100%
Note 1 Thickness of greater than 50m indicates the presence of a section without drilling, where the
adjacent sections on BOTH sides have mineralization and have thus been projected into the empty space.
Note. 2 Constant SG of 2.33 applied to all volumes.

Table 10, Sectional Polygonal Resource Estimation

Summary of Pallancata Inferred Resource
Cut Off
g/t Ag Tones
Grade
Ag
Grade
Au Ounces Ag
Ounces
Au
Ounces Ag
Equivalent
Ounces Au
Equivalent
150 2,698,000 445 1.7 38,604,000
146,600
48,189,000
737,000
75 4,652,000 309 1.2 46,156,000
179,600
57,900,000
885,000

Note. 1 This Resource is estimated on uncut grades
Note 2 Silver and Gold Equivalents are calculated using $6.50 silver and $425 gold, with no allowance
being given for metallurgical recoveries.

Table 11, Resource Summary
45

17 Other Relevant Data and Information

None.

18 Interpretation and Conclusions

The Pallancata deposit is a low-sulfidation, precious metal epithermal system. Silver and
gold mineralization is present in a complex system of veins, breccias, stockwork zones and
silcificaton. High-grade mineralization occurs in massive silica, particularly where carbonate
replacement textures are apparent. The main-stage precious metal mineralization overprints
earlier stages, but may also represent the waning stages of the same hydrothermal system.
Control of the main-stage mineralization is likely to have been provided by a major
northwest-southeast striking fault.

Through detailed geological mapping and surface rock sampling, IMC has defined 3
principal target areas; Pallancata, Mariana and San J avier. To date IMC has focused its
attention on the main northwest-southeast striking Pallancata Vein structure.

The 2003 Phase 1 drill program at Pallancata tested and confirmed the high-grade nature of
silver and gold mineralization, as defined by IMCs rock geochemical sampling from surface
and underground workings.

The 2004 / 2005 Phase 2 drill program tested extensions of the known mineralization along
the Pallancata structure and confirmed that the mineralization is open along strike to the
northwest and southeast and at depth to the west. The Mariana and San J avier zones were
also tested in the Phase 2 program, producing encouraging silver and gold grades with
potential for additional mineralization along strike. No resource calculations were made for
Marian and San J avier Zones at this time due to lack of drill data.

IMC has calculated an initial Inferred Resource estimate utilizing polygons on vertical cross
sections of approximately 2.7 million tones at 445 g/t silver and 1.7 g/t gold containing
approximately 38.6 million ounces of silver and 146,000 ounces of gold at a cut-off grade of
150 g/t silver.

19 Recommendations

Metallurgical testwork should be carried out immediately by IMC to establish the possible
recoveries of silver and gold using conventional recovery techniques.

Infill drilling will be required to be completed by IMC on the main Pallancata vein structure
to better define the grade distribution and geometry of the deposit to enable the current
Inferred Resource to be upgraded to Measured and Indicated categories. In addition, further
46
drilling is recommended to seek additional extensions of the known mineralization, both
along strike and at depth and to seek possible blind mineralized shoots at depth on the
property.

For the main Pallancata Structure, the following detailed work is recommended in order to
bring the current Inferred Resource estimation to the Measured and Indicated categories
under NI43-101:

1. Undertake statistical analyses of the current data to define the optimum drill spacing.

2. Additional drilling of the vein using intercept intervals as defined by statistical
analyses generated by number 1, above.

3. With new drill information, reinterpret all geological sections:
- Correlate data, section to surface and section to level plan.

4. Reinterpret the mineralized structure

5. Rerun statistics to:
- define best estimation technique for this deposit
- define the correct (if any) top cut grades to apply

6. Define grade shells

7. Remodel the data

8. Additional metallurgical testwork

9. Additional specific gravity testwork to verify the initial results generated by IMC in
the Phase 2 program.

Two other areas of interest that could potentially add significant silver and gold ounces to the
current resource in the short term are the San J avier Zone and the Mariana Zone. These areas
need further mapping, sampling and drilling in order to produce an initial Inferred Resource
estimate.

In addition, the main Pallancata structure is known to extend westerly into the newly-
acquired Pacapausa property and surface rock geochemical sampling and follow-up drilling,
if justified, is recommended in that area.

47
20. References

Appleyard, Nick, Sept 2005 Pallancata Project, Peru, Inferred Resource Estimate
Report

Crummy, J ulia, April, 2005 Pallancata Project, Peru, Summary Report

Pratt, Warren & Regional Geological Mapping and Prospecting at Pallancata,
Crummy, J ulia, January 2005 Southern Peru

Data Provided by International Minerals Corp

1. Assay Certificates, ALS Chemex and SGS, Lima Peru
2. Standards, Certificates of Analysis, Rocklabs, Auckland, N.Z.
3. Spreadsheets of Drill Assay Results, DDHs PAC 1-68
4. Plans, Pallancata Vein, 4200m, 4250m, 4300m, 4350m, 4400m.
5. Longitudinal Section, Pallancata Vein
6. Regional Geology, Pallancata
7. Plan, Drill Hole Location, Pallancata Vein
8. Spreadsheets, Mineralized Intervals/Lengths/True Widths/Au/Ag
48
21. Certificate of Qualified Person

I, Mark Edward Cannuli, P. Geol do hereby certify that:

a. I am a consulting geologist with address at 1065-16 Street, West Vancouver,
B.C., Canada, V7V 3S5

b. I graduated with a Bachelor of Science degree (Geology) from McGill
University in 1974 and a Masters of Applied Science from McGill
University in 1980.

c. I am a professional Geologist (P. Geol) in good standing with the Northwest
Territories Association of Professional Engineers, Geologists and Geophysicists
(N.A.P.E.G.G., #L467).

d. I have worked as a geologist for a total of 29 years since my graduation from
university.

e. I have read the definition of qualified person set out in National Instrument
43-101 (NI 43-101) and certify that by reason of my education, affiliation with a
professional association (as defined in 43-101) and past relevant work experience,
I fulfill the requirements to be a qualified person for the purposes of NI 43-101.

f. I visited the Pallancata Property on October 10 and 17, 2005.

g. I have not had prior involvement with the property that is the subject of this report

h. I am not aware of any material fact or material change with respect to the subject
matter of the Technical Report that is not reflected in the Technical Report,
the omission to disclose which would make the Technical Report misleading.

i. I am independent of the issuer applying all of the tests in section 1.5 of
National Instrument 43-101.

j. I have read National Instrument 43-101 and Form 43-101F1, and the
Technical Report has been prepared in compliance with that instrument and form.

k. I consent to the filing of the Technical Report with any stock exchange and
other regulatory authority and any publication by them for regulatory purposes,
including electronic publication in the public company files on their websites
accessible by the public, of the Technical Report.

Dated this 19th day of October, 2005.

Mark Edward Cannuli

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