I-Minerals lnc. provided a status update on its ongoing project optimization activities. Alternate technologies have resulted in the production of an exceptional metakaolin product similar to high priced Georgia clay belt products; Pilot plan work at Mineral Research Laboratory, North Carolina State University, has continued to demonstrate the potential production of a world class potassium feldspar ("k-spar") product with higher K20 and lower Fe2O3 than virtually all currently available K-spar products. Pilot Plant work at Ginn Mineral Technologies ("GMT") has commenced designed-to-test modifications to the flow sheet including the use of a hammer mill and hydrocyclone for the initial sand - clay separation. Additional processes were applied to the flash calcined metakaolin, and ASTM C311 water demand tests and Strength Activity Index (SAI) tests were undertaken at CTL | Thomson in Denver, CO (CTL). Results provided by CTL demonstrate the preferred test product met the ASTM water demand requirements and generated a SAI result well in excess of 110. These results indicate I-Minerals can produce a high performance Supplementary Cementous Material ("SCM"). At the present time there are no other high performance SCMs produced for sale into Western markets offering I-Minerals the opportunity to step in to fill the void. Pilot plant work at MRL has now re-commenced after a shut down for the Christmas holidays. To date 11 runs of approximately 2000 lbs. each have been processed through the plant. After each run samples are sent for oxide chemical analysis with process refinements made based upon the results. The last few runs have generated results approaching 14% K20, 17% Al2O3, and 0.02% Fe2O3. Results to date are very encouraging as they continue to demonstrate I-Minerals ability to produce a world class K-spar product as good as or better than any currently available commercial product. Upon completion of the K-spar production the pilot plant will be cleaned and reconfigured for production of quartz products from the sinks of the K-spar flotation. GMT has now configured the -front end of the pilot plant. The addition of the hammer mill is intended to break up any clumps of primary clay and reduce the sand fraction particle size to minus ¼inch prior to clay/sand separation. The other process change to the flow sheet is the use of a hydrocyclone for the initial clay (kaolin + halloysite) and sand (quartz + K-spar) separation. I-Minerals has previously tested the use of a cyclone at the equipment supplier's pilot plant facility with very encouraging results. Prior GMT processing limitations had resulted in 22% of the primary clay feed reporting to the clay circuit. Bench scale testing at FLSmidth of the hydrocyclone resulted in 30% of the primary clay feed reporting to the clay circuit indicating an increase in recovered halloysite and kaolin of approximately 30% (8/22). With the pilot plant set to process approximately 60 tons of primary clay the increased kaolin and halloysite recoveries attributable to the use of the hydrocyclone will be demonstrated on pilot production level volumes. Preliminary cost estimates indicate there would be no material capital cost increase by using a hydrocyclone instead of screw classifiers indicating all increased halloysite and kaolin recovery would directly increase the contribution of the clay minerals to total revenue and have limited impact on operating costs.