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The highlight of 2007, and a major milestone for the Red Chris project, was the drill hole intersection which graded 1.01% copper and 1.26 g/t gold from surface to a depth of 1084 metres. This is one of the most remarkable intersections drilled in British Columbia, and the best hole drilled in Imperial's history. The results of the 2007 drill program confirmed the Red Chris coppergold deposit is much larger than the 2004 measured and indicated resource of 446 million tonne estimate grading 0.36% copper and 0.29% g/t gold. Further work to establish the full size and extent of the Red Chris orebody and the amenability of the deeper portions to bulk underground mining techniques will be undertaken. Plans for 2008 include construction of an exploration trail into the site so follow up drilling can be conducted without helicopter support. The key factors impacting the mine development at Red Chris are the construction of a power line to supply grid power to northwest British Columbia, and resolution of the challenge to the screening report issued in connection with the Federal environmental assessment review. The Canadian Environmental Assessment Act screening report challenge that is under appeal does not affect the Provincial Environmental Certificate issued for Red Chris. We expect the challenge to the Federal environmental assessment of Red Chris will be resolved by the end of 2008, either by completion of a comprehensive study or by judicial confirmation of the right of Federal responsible authorities to assess projects such as Red Chris by way of a screening report. As for grid power to the northwest sector of the Province, in October 2007 the Government of British Columbia announced it would build a power line from Meziadin to Bob Quinn and upgrade the existing power line from Terrace to Meziadin. Subsequently in November 2007 the Government placed the power line project on hold. Imperial is part of a coalition comprised of multiple stakeholders including municipalities, First Nations, mining and mineral exploration companies, independent power producers, suppliers, contractors, engineering firms, transportation firms and other independent business enterprises, that believes it can demonstrate to the Province the necessity of continuing work on the power line based on the combined potential of projects, both power consuming and power producing, in the northwest sector of British Columbia. At the Sterling gold project, a 3,352 foot underground ramp was completed to advance exploration efforts and gain access to the 200,000 tonne resource grading 7.41 g/t gold in the 144 zone. The ramp intersected mineralized breccias, east of a latite dike forming the eastern boundary of the 144 zone, which bodes well for expansion of this zone. Underground diamond drilling is underway to further define and expand the known 144 zone gold resource. Mount Polley mine production of 51 million pounds copper was lower than forecast as the Wight pit ore could not be delivered in the quantities budgeted. Highwall remediation work in the Wight pit interfered with the production schedule and also added costs, with the hiring of a contractor to assist in stripping and to unload the western highwall of the Wight pit. The contract equipment was demobilized at the end of February 2008 following completion of this work. Stripping in the Springer pit is well advanced, with more than 8 million tonnes removed to date. The Springer pit will be the major source of ore when the Wight and Bell pits have been exhausted. A large resource of copper mineralization beneath the Wight pit has been outlined. It will be investigated as a potential underground operation upon completion of the open pit. Exploration drilling at Mount Polley in 2007 tested eight zones on the property and provided further encouraging results. Drilling included 121 diamond drill holes totaling 39,503 metres compared to 123 diamond drill holes totaling 26,240 metres in 2006. The highlights of this drilling include expansion and delineation of mineralization at the Pond zone, C2 zone and in particular, the Springer zone. The drilling intersected significant intercepts to the north and northwest of the planned Springer pit. The biggest step out in this area is hole JZ07-02, collared 650 metres northwest of the planned pit final design, which returned 165.0 metres grading 0.38% copper and 0.20 g/t gold. Mill feed at Huckleberry is now sourced exclusively from the Main Zone Extension pit. This pit will extend mine life to the year 2010 but annual production will be reduced as the copper grade there is approximately 0.35% compared to historic grades of nearly 0.5%. Production costs at both Mount Polley and Huckleberry continue to increase with labour, fuel, and virtually all other costs rising. Also, the Canadian dollar continues to gain against its US counterpart with negative impact on operating margins. Balancing these factors, metal prices have remained high on continued strong demand and less than anticipated supply. At the current prices, we expect Huckleberry and Mount Polley to continue providing positive cash flow to fund our growth. We thank all those involved in our activities for their support, and we look forward to working with our employees and stakeholders to continue growing our corporation. J. Brian Kynoch President

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