FEASIBILITY STUDY REVEIW MAY 2016 www.imineralsinc.com OTCQX: - - PowerPoint PPT Presentation

OTCQX: IMAHF TSX.V: IMA

FEASIBILITY STUDY REVEIW

MAY 2016

www.imineralsinc.com

TSX.V: IMA | OTCQX: IMAHF

OTCQX: IMAHF TSX.V: IMA

Forward Looking Statements

This presentation may contain forward-looking statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of I-Minerals to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward looking statements may include statements regarding exploration results and budgets, resource estimates, work programs, strategic plans, market price of industrial minerals or other statements that are not statements of fact. Although I-Minerals believes the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been

• correct. Various factors that may affect future results include, but are not limited to,

fluctuations in market prices of minerals, foreign currency exchange fluctuations, risks relating to exploration, including resource estimation and costs and timing of commercial production, requirements for additional financing, political and regulatory risks, and other risks described in I-Minerals’ management discussions and analyses as filed on SEDAR and

• EDGAR. Accordingly, undue reliance should not be placed on forward-looking statements

OTCQX: IMAHF TSX.V: IMA

Minerals for Economic Growth

• US domestic reporting issuer located in mining friendly Idaho
• Feasibility Study confirms IMA will be a low cost producer of four unique

high value industrial minerals: K-spar, high purity quartz, kaolin, halloysite all contained in one deposit

• minerals are consumed in manufacturing of products that are consumed

in housing and infrastructure –sectors that are key contributors to the economic recovery

• K-spar: N.A. class; used in glazes tiles and sanitaryware
• Quartz: N.A. class; used in high end glass
• Kaolin: N.A. class; metakaolin = pozzolan used in cement
• Halloysite: world class; plastics, polymers, life sciences
• Almost two-thirds of “ore” mined is processed into saleable mineral

products

OTCQX: IMAHF TSX.V: IMA

Strong Economics, but valuation disconnect

• Valuation disconnect: Minerals are not COMEX traded causing opaque

pricing : Market Cap <US$20 million; FS (after tax) NPV US$250 million

• Easy mine to build: most process equipment “off the shelf” short lead

time to production (~1.5 year after FS funded)

• Straight forward State of Idaho permitting: Non-metallic mine, no EIS
• Low Cost: FS: $108.3m initial CAPEX; contract mining.
• Robust after tax economics: $250 NPV(6%); 25.8%IRR
• Strong EBITDA forecast by FS: $44.98m LoM average Operating Income
• Experienced Management led by Thomas Conway (Newmont)
• Large insider ownership of ~40% led by Allen Ball ~38%
• Valuation disconnect severed on production? Opportunity for re-rating?

November 2014 Imerys acquired S&B at 9.2 times EBITDA

OTCQX: IMAHF TSX.V: IMA

Helmer-Bovill Project

• Location: Latah County, Idaho; ~110 miles

South of Spokane, WA

• Brownfield project: previously mined -

logged; excellent infrastructure;

• Power / gas: 5 miles from mill site
• State highway on property boundary;

<100 miles to Interstate

• Rail: 50 miles to Lewiston (BN& UP);

trunk lines to Spokane (UP);

• Tidewater Access to Portland by barge

via Snake/Columbia Rivers or truck via Interstate 84 or to Seattle via Interstate 90

• Supportive community - economically depressed resource based county
• Land Tenure: Idaho Department of Land Mineral leases. Subject to 5% royalty to

State Education Fund State’s financial interest aligned with I-Minerals.

OTCQX: IMAHF TSX.V: IMA

MINERAL PRODUCTS

OTCQX: IMAHF TSX.V: IMA

CLAY MINERALS – formed by weathering of Na-feldspar

Halloysite [Al2Si2O5(OH)4·2H2O]

• Biodegradable tubular morphology
• I-Minerals halloysite world class:

high aspect ratio; low heavy metals no crystalline silica,

• Traditional uses porcelain / ceramics
• Emerging uses: plastics/polymers (strength, weight),

life sciences (delivery mechanism, cosmetics), Environmental(nanoporous membranes for separation)

Kaolin [Al2Si2O5(OH)4]

• Kaolin calcined (heated to +800oc), bonded water evaporates
• Metakaolin = a pozzolan -a silicate-based material that consumes

calcium hydroxide (lime) to produce additional calcium silicate hydrate, the material responsible for holding concrete together. Consuming lime increases the strength and density of concrete, decreases efflorescence; virtually eliminates alkali-silica reaction.

• Metakaolin is currently sourced from S.E. USA = expensive.
• Fly ash (from coal) a low cost alternative; environmental issues.

OTCQX: IMAHF TSX.V: IMA

SAND MINERALS

Quartz [SiO2]

Value determined by purity (SiO2% and how impurities react in melt tests) and fineness of the grind I-Minerals has achieved 99.98% SiO2 purity through flotation - the low end of high purity quartz market Applications: solar glass, LCD monitors/flat panels, specialty lighting. Removal of a few ppm of Ti opens higher value markets: fiber optics, LED lighting

K (Potassium)-Feldspar [KAlSi3O8] (“K-spar”)

Value: determined alkali content, purity, K2O%, grind I-Minerals K-spar products are best in class: very high K2O, very low iron, high alumina (Al) Applications: ceramic bodies and glaze (tiles, sanitary ware, tableware); technical ceramics (aerospace, medical, military), flux in high temperature glazes

OTCQX: IMAHF TSX.V: IMA

MINERAL PRODUCT VALUES

Mineral

Market Size (000s tons) (1) Price and Revenue Estimates

Min Max Geographic Market IMA Target Market Growth $ Min $ Max % FS Revenue Price Growth Halloysite 150 180 Global 15

(2)

300 +2500 22.5%

(3)

Kaolin 50 +250 Western US 45

(4)

100 500 13.5%

(5)

Quartz 800 1000 US & Asia 108

• 50

750 46.0%

(6)

K-spar 200 250 US 48 (7)

• 100

500 18.0%

(8)

FS Pricing developed weighted average “basket price” of $316 per ton of product FS costs calculated to be $92 per ton of product or $56 per ton of ore

Notes (1) Based upon study by Charles River Associates

(2) Increased use in plastics polymers key (3) IMA best purity and aspect ratio (4) Metakaolin makes in roads into fly-ash market (5) IMA price growth as shift ceramic apps to metakaolin (6) Demand for HPQ off as solar growth currently slow (7) Imerys closed Monticello GA plant removed 50k tons (8) N.A. production @$240/t Custer- lower grade;

+$250/T FOB Spain for IMA comparable K-spar

OTCQX: IMAHF TSX.V: IMA

MINING & METALLURGY

OTCQX: IMAHF TSX.V: IMA

Simple Mining

“Ore” is a fine white clayey sand created by the weathering of Thatuna Granodiorite, a unique border phase of the of the Idaho Batholith. Weathering takes place to depths of 75 to 200 feet; little overburden, shallow pits Ore is excavated without drilling or blasting using contract miners utilizing 3 yd3 excavator and 30 ton trucks Short haul to process facility -10 minute cycle time; mining during daylight hours only.

Mining Costs $14.50 / ton product

OTCQX: IMAHF TSX.V: IMA

Basic Flow Sheet (developed at Ginn and MRL Pilot Plants)

1. Wet Screen separation clay washed from Sand 2. Quartz K-Spar Sand Fraction

• K-spar is floated; quartz sunk via basic flotation
• Quartz fraction is ground finer and then re-floated

TrueQ1 product, re-floated up to 2 more times to remove residual K-spar to make high purity quartz products (TrueQ3) 3. Kaolinite Halloysite Clay Fraction

• Halloysite is separated from kaolinite with centrifuge
• Proprietary flotation +90% halloysite product
• Halloysite slow dried to preserve tubular shape
• Kaolin calcined (heated to 9000C) to make

Metakaolin

Processing costs $58.50/t product

OTCQX: IMAHF TSX.V: IMA

Project Layout

OTCQX: IMAHF TSX.V: IMA

Site Isometric View from East

OTCQX: IMAHF TSX.V: IMA

Plant Area General View from the North

OTCQX: IMAHF TSX.V: IMA

ECONOMIC VALUATION

OTCQX: IMAHF TSX.V: IMA

Bovill Kaolin Feasibility Study Results (March 2016)

Completed by GBM Engineers LLC, (overall project management, process plant and infrastructure design; OPEX and CAPEX) with

• ther services provided by HDR Engineering, Inc. (all

environmental components; hydrology / hydrogeology; road design); Tetra Tech, Inc. (tailings storage facility design); Mine Development Associates (mine modelling; ore scheduling; mineral reserve estimation); and SRK Consulting (U.S.) Inc. (mineral resource estimation). INITIAL CAPEX US$ 108.3 million SUSTAINING CAPITAL Life of Mine $11.7 million Before Tax: NPV6 $US 385.8 million IRR 31.6 % After Tax: NPV6 $US 249.8 million IRR 25.8 % Payback 3.7 years

• Avg. LoM Operating Income $44.98m ~= EBITDA

OTCQX: IMAHF TSX.V: IMA

Select Mineral Price EBITDA Scenarios

Case A Case B Case C Case D Case E PFS FS Case F Case G $50 Halloysite $50 Kaolin $100 Quartz $180 k-spar Basket $105.32 $100 Halloysite $100 Kaolin $120 Quartz $180 k-spar Basket $128.54 $180 Halloysite $180 Kaolin $120 Quartz $180 k-spar Basket $149.34 $500 Halloysite $220 Kaolin $120 Quartz $200 k-spar Basket $183.70 $700 Halloysite $220 Kaolin $200 Quartz $225 k-spar Basket $244.16 $840 Halloysite $160 Kaolin $222 Quartz $247 k-spar Basket $258.69 $1054 Halloysite $231 Kaolin $292 Quartz $252 k-spar Basket $323.71 $1200 Halloysite $231 Kaolin $250 Quartz $275 k-spar Basket $317.88 $1500 Halloysite $231 Kaolin $250 Quartz $250 k-spar Basket $332.93 halloysite revenue 731 1,462 2,632 7,310 10,234 12,281 15,412 17,544 21,930 kaolin revenue 2,014 4,027 7,249 8,859 8,859 6,443 9,302 9,302 9,302 quartz revenue 10,790 12,948 12,948 12,948 21,580 23,954 31,468 26,975 26,975 k-spar revenue 8,701 8,701 8,701 9,668 10,877 11,940 12,163 13,294 12,085 Gross Revenue 22,236 27,138 31,529 38,785 51,550 54,618 68,346 67,115 70,292 IDL Royalty (1,112) (1,357) (1,576) (1,939) (2,577) (2,731) (3,417) (3,356) (3,515) OP Cost (19,040) (19,040) (19,040) (19,040) (19,040) (19,040) (19,040) (19,040) (19,040) EBITDA 2,084 6,741 10,913 17,806 29,932 32,847 45,888 44,719 47,738 $50 Halloysite / Kaolin filler $100 Halloy/Kaolin some meta-kaolin $500 halloy discount ceramic price PFS $160 kaolin 50% ceramic $1200-1500 halloysite w. lifesciences $100 quartz low end glass $120 quartz all Q1 50 mesh $220 Kaolin Georgia Meta-kaolin $ PFS $840 halloysite no +90% Ultra $231 metakaolin cheapest Pac NW $180 K-spar price when NA production $180 Halloy/Kaolin most meta-kaolin $700 halloy NZ Ceramic price PFS $222 quartz, less Q3 $250 quartz if less Q3 sales

OTCQX: IMAHF TSX.V: IMA

Resource and Reserve Changes vs. Pre-Feasibility Study (PFS)

• As a result of additional drilling and improved density measurements the

Measured and indicated resources from 11.2 million tons grading 75% quartz/k-spar sand, 14.8% kaolinite clay and 3.2% halloysite to 21.2 million tons grading 62.3% quartz/k-spar sand, 14.67% kaolinite clay and 3.1% halloysite.

• Reserves increased from 7.7 million tons grading 74.3% quartz/k-spar

sand, 14.62% kaolinite clay and 4.0% halloysite to 8.7 million tons grading 77.3% quartz/k-spar sand, 11.8% kaolinite clay and 4.4% halloysite.

• Processing throughput increased from 800 tons/day (275,000 tpa) to 989

tons/day (346,000 tpa)

• If all 21.2 million tons of resources can be converted to reserves, at a

processing rate of 346,000 tpa potential for over 50 year mine life.

OTCQX: IMAHF TSX.V: IMA

CAPEX Changes vs. PFS

• Process changes to make higher value products: additional flotation circuit

to make +90% Ultra HalloPure product and increased calcination to increased volumes of metakaolin

• Shift to dry stacking of the tailings increased initial CAPEX, but lowers LOM

CAPEX and reduces water consumption

• Moved closer to “Turn key” construction as reflected in Engineering

Procurement Construction Management (“EPCM”) increased by $13.5 million

• Stronger “safety nets” increased contingency plus inclusion of cash

reserves for working capital (fund time waiting for initial customer payments) added $17.5 million to CAPEX Total

• LoM difference FS $120m vs PFS $90m

OTCQX: IMAHF TSX.V: IMA

OPEX changes vs. PFS

• Increased calcination capacity to make all kaolin into metakaolin
• Dry stacking of the tailings (dewatering)
• Changes to flotation circuit for halloysite, bead mill for metakaolin
• As I-Minerals is a one project company, the general and administration

costs of running the public company (legal, audit, admin etc.)

• Small decrease in recoveries based on recent pilot plant work means small

increase in tons processed to make the same mix of mineral products

• Mining Costs $14.50/ton of product ($9.00)
• Processing costs $58.50/ton of product ($60.00)
• G&A costs $19.00/ton of product ($1.00)

OTCQX: IMAHF TSX.V: IMA

Mineral Product Changes vs. PFS

• Additional customer testing and further feedback since June 2014 PFS

indicated some product changes

• Two float Q2 product dropped. Most customers want either Q1 or Q3.

Small volumes of Q2 interest upgraded to Q3

• Kaolin for ceramic applications ($95/t) has been dropped and all kaolin will

now be turned into metakaolin ($230/t). Change driven by letters of interest including one company wanting 115% of production

• As configured in PFS flotation would have made a halloysite product ~75%

halloysite and ~25% kaolinite. High value applications require higher halloysite percentage. 50% of production will now be Ultra HalloPure which is a +90% halloysite product and commands a higher price.

• Customer feedback indicates lower K20 and higher Fe in incumbent

producer’s K-spar products. Inconsistency in quality of some Indian

• production. No price ramp up as in PFS

OTCQX: IMAHF TSX.V: IMA

Next Steps

• Permitting: Application with State of Idaho nearing completion now FS is
• completed. Timelines indicated suggest approval in Q3. Permit together

with FS yield bankable feasibility study (“BFS”).

• Financing: In process of engaging a international financial agent to

structure and if acceptable market the structured financing in London, New York and Toronto. Structure will include debt, equity and possibly convertibles, offtakes and other customer related agreements

OTCQX: IMAHF TSX.V: IMA

Management

Thomas M. Conway, President & CEO: Extensive experience building,

commissioning and operating mines around the world for Newmont Mining:

• Vice President Risk Management: Developed risk management strategies for health,

safety, environmental, social responsibility, legal

• Vice President / General Manager–Carlin Operations: Responsible for the P/L of 2

mm oz./yr. operation with 1600 employees; 5 open pits, 3 u/g mines & 3 met. facilities

• Vice President / General Manager Mineral Yanacocha: oversaw start up of 2

metallurgical plants and 3 open pits of Newmont’ s most profitable gold mine

Lamar Long, Project Manager: career in industrial minerals including 12 years with

I-Minerals, 13 years as Exploration Manager, Industrial Minerals, Hecla Mining assessing industrial mineral deposits around the world and six years with JM Huber in Georgia Clay Belt.

Gary Nelson, Metallurgical Operations Manager: management / supervisory

experience in industrial mineral production and pilot plant operations including Plant

• Superintendent. AZCO Mining; Sr. Metallurgical Engineer, Hecla Mining (KT Clay/Feldspar)

Linda Koep, Market Development Manager: Market Development Strategy and

competitive analysis; 23 years industry experience, 9 with Hecla Mining (KT Clay/Feldspar)

OTCQX: IMAHF TSX.V: IMA

Directors

Thomas M. Conway, (Salt Lake City, UT) President & CEO (see prior page) Allen L. Ball, (Idaho Falls, ID) Founder and Chairman of Melaleuca Corporation that has grown from a start-up in rural Idaho to a billion-dollar enterprise doing business in 17 countries around the globe and is now one of the largest catalog and online retailers in North America; Successful real estate developer through Ball Ventures, LLP.

• J. Gary Childress, (Columbus OH) President Orton Ceramic Foundation that provides

products to assist and enhance high temperature processing of ceramics and other

• materials. Prior thereto he was an Executive Vice President of Helca Mining where he was

integral to the success of its industrial mineral assets including KT Clay / Feldspar

• W. Barry Girling, (Vancouver, BC) Independent business consultant active in resource

exploration companies for almost 30 years and has served on numerous boards most recently as founder / former director of both Birch Hill Gold Corp. and Roxgold Inc. Wayne Moorhouse, (Vancouver, BC) Chartered Financial Analyst, (CFA Institute, Charlottesville, VA) extensive experience with public companies including reporting, mine development, finance, contract negotiations, and corporate governance and has served as a director / officer of several companies including Roxgold Inc.

Chief Financial Officer: Mathew J. Anderson, CPA, CA is a Senior Consultant with

Malaspina Consultants Inc., and has served as CFO of several junior public companies

OTCQX: IMAHF TSX.V: IMA

Share Capital Shares Issued & Outstanding 82,608,728 (insiders 40.0%) Fully Diluted 96,743,390 (insiders 42.3%)

Expiry Number Exercise Price 30-Jul-18 1,300,000 0.100 30-Jul-18 260,000 0.150 30-Jul-18 300,000 0.250 19-Nov-18 200,000 0.250 08-Jan-19 150,000 0.250 23-May-19 300,000 0.250 16-Dec-17 150,000 0.250 29-Jan-20 1,975,000 0.250 04-Aug-20 200,000 0.250 Total / Average 4,835,000 0.204 OPTIONS Expiry Number Exercise Price 1-Dec-16 2,125,610 0.199 31-Jan-17 1,550,000 0.400 31-Dec-18 1,903,828 0.241 Total / Average 5,579,438 0.269 WARRANTS

OTCQX: IMAHF TSX.V: IMA

Summary

Robust FS

• $108.3 mm initial CAPEX; $120 mm Life of Mine
• 3.7 after tax year payback
• Annual Operating Income ~$45 million
• Strong NPV and IRR

Before Tax After tax $386mm NPV6 $250 mm NPV6 31.6 % IRR 25.8 % IRR Long mine life only 25 years defined; 50+ year potential long term cash flows high valuation multiples (e.g. Imerys acquisition of S&B Minerals for +9 times EBITDA Diversified product and product market mix: four mineral products in various purities and grinds available for sale into markets diversified by both geography and industry, but most markets are integral to the US housing / economic recovery.

OTCQX: IMAHF TSX.V: IMA

I-Minerals Inc.

OTCQX: IMAHF TSX.V: IMA

www.imineralsinc.com Contact: Paul Searle Barry Girling (877) 303 6573 ext. 113 (877) 303 6573 ext. 102 psearle@imineralsinc.com wbg@imineralsinc.com