Mr. Brian Kynoch reports

IMPERIAL REPORTS FIRST QUARTER 2023 FINANCIAL RESULTS

Imperial Metals Corp. has released its financial results for the three months ended March 31, 2023, as summarized in this news release and discussed in detail in the management's discussion and analysis. The company's financial results are prepared in accordance with international financial reporting standards (IFRS). The reporting currency of the company is the Canadian dollar.

Quarter highlights

Financial

Total revenue was $92.7-million in the March, 2023, quarter, compared with $33.1-million in the 2022 comparative quarter.

In the March, 2023, quarter, the Red Chris mine (100-per-cent basis) had 2.4 concentrate shipments (2022 -- 3.0 concentrate shipments). Mount Polley mine had 1.4 concentrate shipments (2022 -- nil concentrate shipments).

Variations in revenue are impacted by the restart of the Mount Polley mine operations, timing and quantity of concentrate shipments, metal prices and exchange rates, and period-end revaluations of revenue attributed to concentrate shipments where copper and gold prices will settle at a future date.

The London Metals Exchange cash settlement copper price per pound averaged $4.05 (U.S.) in the March, 2023, quarter, compared with $4.53 (U.S.) in the 2022 comparative quarter. The LBMA (London Bullion Market Association) cash settlement gold price per troy ounce averaged $1,888 (U.S.) in the March, 2023, quarter, compared with $1,874 (U.S.) in the 2022 comparative quarter. The average U.S.-dollar/Canadian-dollar exchange rate was 1.352 in the March, 2023, quarter, 6.8 per cent higher than the exchange rate of 1.266 in the March, 2022, quarter. In Canadian-dollar terms the average copper price in the March, 2023, quarter was $5.48 (Canadian) per pound, compared with $5.73 (Canadian) per pound in the 2022 comparative quarter, and the average gold price in the March, 2023, quarter was $2,553 (Canadian) per ounce, compared with $2,373 (Canadian) per ounce in the 2022 comparative quarter.

A positive revenue revaluation in the March, 2023, quarter was $5.9-million, as compared with $1.2-million of positive revenue revaluation in the 2022 comparative quarter. Revenue revaluations are the result of the metal price on the settlement date and/or the current period balance sheet date being higher or lower than when the revenue was initially recorded or the metal price at the last balance sheet date and finalization of contained metal as a result of final assays.

Net loss for the March, 2023, quarter was $7.3-million (five cents per share), compared with a net loss of $6.9-million (five cents per share) in the 2022 comparative quarter. The increase in net loss of $400,000 was primarily due to the following factors:

• Mine operations went from an income of $2.0-million in March, 2022, to a loss of $1.6-million in March, 2023, increasing net loss by $3.6-million.
• Mount Polley restart costs went from $22.4-million in March, 2022, to nil in March, 2023, decreasing net loss by $22.4-million.
• Gain on disposal of mineral properties went from $16.2-million in March, 2022, to nil in March, 2023, increasing net loss by $16.2-million.
• Interest expense went from $800,000 in March, 2022, to $6.0-million in March, 2023, increasing net loss by $5.2-million.
• Tax recovery went from $1.5-million in March, 2022, to $4.4-million in March, 2023, decreasing net loss by $2.9-million.

Capital expenditures, including leases, were $24.3-million in the March, 2023, quarter, a decrease of $7.4-million from $31.7-million in the 2022 comparative quarter. The March, 2023, quarter expenditures included $8.5-million in exploration, $3.5-million for tailings dam construction, $4.2-million on stripping costs and $8.1-million of other capital.

At March 31, 2023, the company had not hedged any copper, gold or U.S.-dollar/Canadian-dollar exchange. Quarterly revenues will fluctuate depending on copper and gold prices, the U.S.-dollar/Canadian-dollar exchange rate, and the timing of concentrate sales, which is dependent on concentrate production and the availability and scheduling of transportation.

Operations

During the quarter ended March 31, 2023, Imperial's consolidated metal production was 10,155,001 pounds copper and 13,129 ounces gold, with 6,678,094 pounds copper and 9,980 ounces gold produced from Mount Polley, and 3,476,907 pounds copper and 3,149 ounces gold from its 30-per-cent share of Red Chris mine production.

Mount Polley mine

Q1 2023 versus Q4 2022

Mount Polley metal production for the first quarter of 2023 was 6,678,094 pounds copper and 9,980 ounces gold, compared with 3,785,629 pounds copper and 6,995 ounces gold produced during the fourth quarter of 2022. Metal production was up by 76.4 per cent for copper and 42.7 per cent for gold for this quarter due to higher mill throughput, higher copper and gold recoveries, and higher copper grade. The throughput was 15,440 tonnes per day compared with 11,783 tonnes per day, copper recovery was 81.1 per cent, compared with 68.9 per cent, gold recovery was 71.5 per cent, compared with 61.8 per cent, and the copper head grade was 0.269 per cent, compared with 0.230 per cent copper. Mount Polley mill operations will continue to try and increase throughput while maintaining the excellent metals recoveries that were achieved this quarter.

Q1 2023 versus Q1 2022

During the comparative March 31, 2022, quarter, the Mount Polley mine was not in production.

Exploration, development and capital expenditures in the first quarter of 2023 were $4.8-million, compared with $2.3-million in the 2022 comparative quarter.

Red Chris mine

Q1 2023 versus Q4 2022

Red Chris metal production (100 per cent) for the first quarter of 2023 was 11,589,689 pounds copper and 10,496 ounces gold, compared with 13,107,451 pounds copper and 14,518 ounces gold produced during the fourth quarter of 2022. At Red Chris, metal production was lower by 11.58 per cent for copper and 27.7 per cent for gold compared with the fourth quarter of 2022, primarily due to lower head grades of 0.32 per cent copper and 0.31 gram per tonne (g/t) gold, compared with 0.34 per cent copper and 0.39 g/t gold in the previous quarter. The drop in grade was in line with expectations, as mining transitions into the lower-gold-grade phase 7 ore source. Quarterly mill throughput decreased to 2,090,772 tonnes from 2,390,084 tonnes in the previous quarter with worn liners and an unplanned rock breaker failure impacting crusher operations.

Imperial's 30-per-cent share of exploration, development and capital expenditures was $19.4-million in the March, 2023, quarter, compared with $29.1-million in the 2022 comparative quarter.

Block Cave feasibility study

At Red Chris, progress toward block cave mining is advancing with the exploration decline at 2,963 metres as of April 14 2023, and the completion of the first ventilation raise for the decline. The Block Cave feasibility study is expected to be completed in the second half of 2023. Several options to optimize the initial extraction level of the first block cave and thus access high-grade ore earlier are being considered in the study. Expansion options for the processing plant are being considered in the feasibility study, including the option to stage expansion to match the cave ramp-up.

The exploration program continued at Red Chris during the first quarter of 2023 with continuing drilling east of the East Ridge exploration target returning positive results. Target generation has also identified an initial portfolio of high-priority copper-gold targets within the Red Chris porphyry corridor for further testing.

During the reporting period, there were up to four diamond drill rigs in operation. A further 10,532 metres of drilling was completed during the quarter from 10 drill holes, with all drill holes intersecting mineralization. Drilling continues to confirm the vertical extent of the mineralization within the East Ridge exploration target.

Jim Miller-Tait, PGeo, Imperial Metals vice-president, exploration, is the designated qualified person as defined by National Instrument 43-101 for the Red Chris exploration program.

Huckleberry mine

Huckleberry operations ceased in August, 2016, and the mine remains on care and maintenance status. The company anticipates working toward the restart of Huckleberry following the start of operations at Mount Polley.

Site personnel continue to focus on maintaining site access, water management (treatment and release of mine contact water into Tahtsa Reach), snow removal, maintenance of site infrastructure and equipment, mine permit compliance, environmental compliance monitoring, and monitoring tailings management facilities.

Geotechnical programs conducted in 2021 have indicated that some work is required to upgrade the existing facility and provided information required to update the tailings facility design for future operations.

For the March, 2023, quarter, Huckleberry incurred idle mine costs comprised $1.8-million in operating costs and $300,000 in depreciation expense, compared with $1.3-million in operating cost and $200,000 in depreciation expense in the comparable quarter of 2022.

About Imperial Metals Corp.

Imperial is a Vancouver-based exploration, mine development and operating company with holdings that include the Mount Polley mine (100 per cent), the Huckleberry mine (100 per cent) and the Red Chris mine (30 per cent). Imperial also holds a portfolio of 23 greenfield exploration properties in British Columbia.

We seek Safe Harbor.