Mr. Thomas Conway reports

I-MINERALS SUES UNIMIN FOR ABUSE OF JUDICIAL PROCESS

I-Minerals Inc. has provided the following update to its press release of Sept. 23, 2014, wherein the company announced that the General Court of Justice, Superior Court Division in Mitchell county, North Carolina Court, through the honourable Louis A. Bledsoe III, special superior court judge for complex business cases, denied Unimin Corp.'s motion for a preliminary injunction against the company and Dr. Thomas Gallo, a consultant to the company, pursuant to Rule 65 of the North Carolina rules of civil procedure, and found that Unimin has failed to present sufficient evidence to show that it is likely that it will succeed on the merits of its claims. I-Minerals and Dr. Gallo have jointly filed a complaint against Unimin, Joseph C. Shapiro, executive vice-president and chief operating officer of Unimin, and Richard C. Zielke, vice-president, technical sales, research and analytical services, for Unimin, based in Spruce Pine, N.C., seeking damages for abuse of process, malicious prosecution, and unfair and deceptive trade practices.

Prior to the 2014 injunction action, Unimin and I-Minerals never had any contact, until Unimin physically served notice of a lawsuit approximately 2,500 miles across the United States requiring I-Minerals' participation in expedited discovery in North Carolina and across the U.S. In the injunction action, Unimin asserted that "Unimin and I-Minerals are competitors in the high-purity quartz industry." Unimin sought, among other things, a preliminary injunction against I-Minerals for seeking consulting assistance from Dr. Gallo concerning the production of high-purity quartz and, allegedly, ultrahigh-purity quartz, and supposedly for seeking to obtain trade secrets. In fact, as previously reported by the company, I-Minerals is not currently pursuing ultrahigh-purity quartz, and Unimin could not provide the court with any credible evidence of I-Minerals possessing any trade secrets of Unimin.

Pursuant to the judicial results as described in a Sept. 4, 2014, order and opinion (i) by a court selected by Unimin, (ii) regarding issues initially selected by Unimin, and (iii) for prosecution by Unimin against I-Minerals on an expedited basis, the court denied Unimin's motion for a preliminary injunction against I-Minerals, and the court dissolved a temporary restraining order Unimin had earlier obtained from the court. Other relief sought by Unimin against I-Minerals had been previously denied by the court at an Aug. 12, 2014, hearing.

Unimin is a wholly owned subsidiary of SCR Sibelco NV, a European-based privately held multinational corporation that has no public disclosure obligations. Unimin has 228 operational sites in 41 countries, and offers products including silica, clays, kaolins, feldspars, olivine, hydrated limes, nepheline syenite, calcium carbonate titanium minerals and other specialty minerals. Unimin's high-purity and ultrahigh-purity quartz are mined in Mitchell county and Avery counties, North Carolina (the Spruce Pine mining district). Importantly, Unimin states, and I-Minerals concurs, that Unimin is the global leader in the production of high-purity quartz and ultrahigh-purity quartz, all of which is produced in Mitchell or Avery counties in North Carolina. The court's Sept. 4, 2014, order and opinion reported Dr. Gallo's testimony -- never denied by Unimin -- stating that "Unimin's Spruce Pine mine produces the highest-purity quartz in the world that is produced on a commercial scale," and that "Unimin has a monopoly on this market." Further, as reported at the 2008 Carolina Geological Society gathering: "At present, no quartz in the world can match the processed quartz purity from the Spruce Pine district. As a matter of fact, every chip in the world uses Spruce Pine quartz in its manufacturing process." These chips are used in all computers and all smart phones. It is hard to imagine a mineral commodity more critical or strategic, nor more ripe for leveraging of the consuming marketplace.

Given the extraordinary disparity in resources between I-Minerals and Unimin, together with Unimin's choice of timing, choice of issues and choice of forum, it was satisfying that I-Minerals would prevail so thoroughly. The actions of Unimin gave the appearance to I-Minerals that Unimin's suit was merely an anti-competitive nuisance action designed to divert and consume I-Minerals' limited resources in order to protect Unimin's market dominance, and to send an anti-competitive message to I-Minerals in the hopes that it would chill I-Minerals' entry into the high-purity quartz markets, and/or preclude it from ever doing research into upgrading its high-purity quartz into ultrahigh-purity quartz.

Claims filed by I-Minerals

In its complaint against Unimin, I-Minerals alleged three claims arising out of the injunction action, for: (1) abuse of process; (2) malicious prosecution; and (3) unfair and deceptive trade practices. All three claims are centred around I-Minerals' contention that under the guise of a lawsuit to protect Unimin's confidential, proprietary and/or trade secret information, Unimin was actually attempting to gain information and documents from Unimin's competitors (including I-Minerals), to interfere with the business relationships of Unimin's competitors (including I-Minerals), to stifle lawful market competition (especially from I-Minerals), and to prevent Dr. Gallo from plying his general skills and knowledge in manufacturing high-purity quartz anywhere in the world.

I-Minerals has alleged the following in its lawsuit with respect to its three claims.

Abuse of process

Unimin abused the legal process by using discovery to gather for competitive reasons information and documents from Dr. Gallo, I-Minerals, and other competitors in the industrial minerals industry. As direct and proximate result of the actions of the defendants, Dr. Gallo and I-Minerals have each suffered damages in the form of lost compensation, impairment to reputation, and business and employment prospects, harassment, and unnecessary legal fees and expenses in defending Unimin's litigation, which each is entitled to recover against the defendants, jointly and severally.

Malicious prosecution

There was no factual foundation supporting the injunction action. The defendants commenced the lawsuit without any reasonable factual inquiry, basing it upon Mr. Shapiro's false verification and Mr. Zielke's factually insufficient affidavit. The lawsuit against Dr. Gallo and I-Minerals was maliciously instituted by Unimin with reckless and wanton disregard of Dr. Gallo's and I-Minerals' rights, and with ill will and spite toward Dr. Gallo for his decision to work for one of Unimin's competitors, namely I-Minerals, and toward I-Minerals for attempting to compete with the defendants in the marketplace.

Unfair and deceptive trade practices

The defendants engaged in unlawful and unfair acts, and/or business practices without privilege, justification or excuse by commencing a sham lawsuit to gain information. The claims asserted by Unimin in its lawsuit against Dr. Gallo and I-Minerals were not objectively reasonable, and were, in fact, objectively meritless and utterly baseless in that the defendants could not realistically expect success on the merits, given the defendants conducted no prefiling investigation, filed suit based upon a false verification, had no evidence that Dr. Gallo misappropriated confidential, proprietary and/or trade secret information, would not and could not identify one single piece of information Dr. Gallo allegedly misappropriated, and had no intention whatsoever to specify or disclose in the course of discovery in the prior lawsuit any information about any actual trade secret Unimin claimed was compromised. In addition, Unimin had no evidence or a good-faith belief that Dr. Gallo or I-Minerals had tortiously interfered with a contract of Unimin, had been unjustly enriched, or had converted any of Unimin's property. Indeed, at the time of Unimin's filing, I-Minerals had neither a quartz product for sale nor a plant to process quartz. Unimin's, Mr. Shapiro's and Mr. Zielke's subjective motivation for filing suit was an unlawful and anti-competitive intent to interfere directly with the business of Unimin's competitor, I-Minerals.

"To date, we have had great success in cleaning our true QT quartz products up to high-purity levels through standard flotation processes regularly used in one form or another by mining companies worldwide," stated Thomas Conway, president and chief executive officer of I-Minerals. "We do not believe that this action ever had anything to do with Unimin's trade secrets, rather Unimin's concern about our ability to be a low-cost producer of high-quality quartz, given our quartz is one of four minerals produced from a fine clay and sand material that requires no drilling or blasting. I guess in some ways we should be flattered that Unimin sees I-Minerals as a substantive enough competitive threat to warrant filing a dubious legal action."

We seek Safe Harbor.