SCIDEV LTD — Interim / Quarterly Report 2003

May 12, 2003

Intec Ltd.

ABN 25 001 150 849

Gordon Chiu Building, J01 Department of Chemical Engineering Maze Crescent University of Sydney NSW 2006 Australia

Telephone: +612-9351-6741 Facsimile: +612-9351-7180 Email: mail@intec.com.au Website: www.intec.com.au

13 May 2003

Companies Announcements Office Australian Stock Exchange Limited

Delivered via ASX Online

Attached is a half yearly update being mailed to all INL shareholders tomorrow.

Yours sincerely

Intec Ltd Mari

Robert J Waring Company Secretary

Tntec Ltd

ABN 25 001 150 849

Gordon Chiu Building, 101 Department of Chemical Engineering Maze Crescent University of Sydney NSW 2006 Australia

Telephone: +612-9351-6741 Facsimile: +612-9351-7180 Email: mail@intec.com.au Website: www.intec.com.au

9 May 2003

Dear Fellow Shareholders

2002 - 2003: HALF-YEARLY UPDATE

The focus of Intec Ltd (INL) is to secure equity in resource projects that benefit from its technology. The proprietary Intee Process (in its various forms) is the world's most advanced in the expanding field of chloride hydrometallurgy. It is now being applied to solve problems and create value in a wide variety of mining and minerals processing projects.

For example, so far during $2002 - 2003$ technical and commercial development opportunities have been progressed in the following diverse activities:

The Intec Refractory Gold Process (IRGP)

An estimated one third of the world's gold production comes from gold deposits that are classified as 'refractory': i.e. the concentrate from the ore requires a pre-treatment processing step prior to gold recovery via conventional cyanidation. This refractory proportion will certainly continue to increase, as near-surface gold deposits (which have been weathered to yield non-refractory gold ores readily amenable to conventional evanide treatment) are being depleted.

The treatment of refractory gold ores, and in particular selection among the competing technologies having regard to their relative advantages and economics, has become a major issue for the gold industry as it seeks to replenish gold ore reserve inventories. In addition, the focus on the development of improved processing techniques for refractory gold deposits has been driven by the need for more environmentally acceptable processing routes, and in particular, the need to dispose of by-products such as arsenic and sulphur in a responsible manner.

During the past six months, Intec has undertaken intense technical and commercial development of the IRGP, which was provisionally patented at the end of 2002 (with further provisional patents subsequently filed). The IRGP provides for the removal via a simple leach step of hazardous contaminants such as arsenic, antimony and bismuth from refractory gold concentrates. In addition, the IRGP provides for the recovery of gold from refractory concentrates by chloride-based leaching and deposition without the need for evanide addition. An independent cost estimation study commissioned by INL in North America has confirmed the IRGP's potential for major economic, technical and environmental advantages over other processes used for the treatment of refractory gold concentrates.

IRGP testwork has to date focussed principally on the 'double-refractory' gold concentrate from the Bakyrchik mine in Kazakhstan, which is majority-owned by Intec's largest shareholder Ivanhoe Mines Ltd (Ivanhoe). Intec recently reached agreement in principle with Ivanhoe (subject to legal documentation presently proceeding) to form a 50/50 joint venture that will provide for the A\$1 million funding by Ivanhoe of further IRGP technical development work, establishment of a continuous pilot plant in Sydney to conduct paid testwork on refractory gold concentrates submitted from projects around the world and the international marketing of the IRGP technology.

Refractory gold concentrates from a number of other projects, both in Australia and overseas, have also been submitted to Intec for trials which are presently proceeding.

Technical involvement in Ivanhoe/CITIC strategic alliance

Ivanhoe recently announced the formation of a strategic alliance with China International Trust & Investment Corporation (CITIC), a Chinese state-owned enterprise with total assets exceeding US\$48 billion including in the resource industry.

The Ivanhoe/CITIC agreement provides for several areas of mutual cooperation including:

"the introduction of advanced minerals processing technologies to various Asian mining projects. One example of an advanced technology is the Intec Process, a hydrometallurgical technology being advanced by Ivanhoe. The Intec Process provides substantial cost and environmental advantages over conventional smelting and refining processes and can be used to refine copper, zinc, nickel and precious metals from raw concentrates".

Commercialisation of the Intec Copper, Zinc and Nickel Processes for Polymetallic Concentrates

Low base metals prices in recent years (see Figure 1) have led to production cutbacks at a number of mines, which in turn have reduced base metals concentrates supplies to the world's smelters and refineries (i.e. Intec's competitors). Because capital has already been 'sunk' into these smelters and refineries and their operating economics are best at maximum production rates, they are bidding aggressively to secure copper, zinc, lead and nickel concentrates, which are presently in limited supply on world markets. This has resulted in the recent sharp decline in contract smelting and refining charges (TC/RC's) applied, for example, to copper concentrates and to a total collapse in spot TC/RC's (both as shown also in Figure 1) thus making it more difficult for any new plant (including an Intec plant) to compete, as it must also amortise its capital investment and still demonstrate an attractive investment return.

Figure 1 LME Copper Price and TC/RC's in real terms (2002 US¢/lb)

Due to this adverse industry and economic environment. Intec has begun to pursue 'soft entries' into the base metals concentrates processing industry, by exploiting the niche advantages of particular geopolitical locations (e.g. tariff barriers, regional political support, etc), solving existing metallurgical problems (e.g. low flotation recoveries, contaminants, using scrap as feedstock, etc) and also by becoming more integrated into the 'downstream' product fabrication business (e.g. Rautomead – see below).

Thus, Intec is presently receiving numerous enquiries from around the world for paid testwork to be conducted on various polymetallic concentrates. These are produced from mines where the economics are presently adversely affected by the need to produce a separate smelter-(i.e. high-)grade concentrate for each base and/or precious metal, resulting in poor metallurgical recoveries from the originally mined ore. Intee considers that a major market opportunity exists due to the Intee Process' unique ability in the chloride medium to recover all payable metals from low-grade complex concentrates.

For example, during early 2003 Intee successfully completed paid laboratory test work on a complex lowgrade copper concentrate also containing significant quantities of silver, lead and cobalt from the Lubin mine in Poland, owned by KGHM Polska Miedz S.A. KGHM is the world's seventh largest copper producer and the world's second largest silver producer. The testwork program demonstrated the ability of the Intec Copper Process to recover in a saleable form all economically valuable metals contained in the concentrate, and it has been proposed to KGHM that this technical outcome can be transformed into a significant wealth creation opportunity with major environmental benefits. This dialogue with KGHM is actively progressing.

Another example, within Australia and elsewhere, are the many tailings dams containing significant quantities of base and precious metals which are amenable to recovery via the Intec Process at no mining cost. Intec has received tailings samples from the various project owners which it has approached and intends to convert the resulting testwork outcomes into alternative business and environmental opportunities for all concerned.

Intee has also completed or is undertaking paid testwork on polymetallic zinc concentrates (Dugald River in Queensland, Myra Falls in British Columbia and Sabinas in Mexico) and nickel concentrates (Platreef in South Africa) and will continue to work with the relevant project owners in order to develop its unique technical advantages into commercially rewarding outcomes.

Treatment of Electric Arc Furnace (EAF) Dust

Following an approach from a leading Australian steel industry participant, Intec undertook laboratory test work on a sample of EAF dust. This is a by-product all around the world of steel production by electric arc furnaces and is considered a hazardous waste incurring high costs for safe disposal. The material contains high levels of zinc and minor amounts of other economically valuable metals, the recoveries of which in aggregate represent a valuable potential resource for environmentally responsible recycling.

Following its investigatory laboratory test work program, Intec lodged a provisional patent for its chloridebased process for the treatment of EAF dust and has submitted to the client a proposal for a stage-paid technology development program.

Phase 2 of the Copper Electrowinning (EW) Cell Test Program

Phase 2 of the copper EW Cell test program (see Figure 2 below) continued during the recent period.

Figure 2 External view of the completed copper EW Cell

The EW Cell was constructed at Intec's laboratory facilities at the University of Sydney between November 2002 and February 2003 and was then operated continuously during February/March 2003. Most new aspects of the EW Cell (polycrete rectangular tank, conveyor belt, anode, anode chamber and cathode) worked very well. Significant quantities of high quality copper dendrites were harvested, removed via the conveyor belt and then re-dissolved for further electrowinning. Currently certain mechanical modifications to the cathode wiping mechanism are being undertaken in order to optimise operation of the EW Cell prior to recommencement of continuous operations this month.

It is now proposed to produce over a period of six weeks approximately two and a half tonnes of LME Grade A copper dendrites. Of this production, two tonnes will be washed, dried and compacted for shipment to Dundee, Scotland as part of the previously announced alliance between Intec and Rautomead International Limited. It is planned that the two tonnes of copper dendrites will be upwardly vertically cast into oxygen-free wirerod using Rautomead's pilot plant in order to demonstrate the joint Intec-Rautomead copper concentrates-to-rod technology package.

When the Phase 2 EW Cell test program has been successfully completed, it is proposed that the EW Cell components be made available for installation in the 150kg Cu per day Intec Copper pilot plant at Hitachi, Japan, presently being operated by Nippon Mining & Metal Co., Ltd (Nippon MM), Mitsui Mining & Smelting Co., Ltd and (the Japanese Government-owned) New Energy and Industrial Technology Development Organisation (See Figure 3 below).

Figure 3 Nippon MM's Intee Copper Process Pilot Plant at Hitachi, Japan.

As a result of its earlier significant contribution to the development of the Intec Copper Process, Nippon MM holds a "Club" process sub-licence. Intee has been providing substantial technical input into the pilot plant program and continues to work closely on the commercial development of the Intee Copper Process in Japan. As part of the resultant technical interaction, Intec visited the pilot plant in Japan during January this year.

The Nippon MM plant has been constructed at no cash cost to Intec and represents the first time that an external party has constructed a chloride-based hydrometallurgical processing facility. Nippon MM and its strategic alliance partners, Mitsui Mining & Smelting and LG-Nikko Copper, have a combined annual production capacity of 1.1 million tonnes of refined copper. This makes the Nippon/Mitsui/LG group the third largest producer of refined copper in the world.

Finance

Intee's available cash at the beginning of May 2003 was A\$1,254,000, substantially in line with the management budget underlying the IPO Prospectus dated 19 December 2001. Overall June 2003 quarter gross cash expenditure is expected to be approximately A\$485,000 in excess of budget and will focus on completion of Phase 2 of the EW Cell test program and technical and commercial development work on the IRGP. This expenditure is proposed to be offset by contributions from EW Cell program participants and the IRGP joint venture (see details above).

Apart from the A\$1 million IRGP joint venture, INL will require additional funding in the second half of 2003 to cover ongoing working capital and project development requirements. Various financing options are currently being progressed and will be announced following the next INL Board meeting on 29 May 2003.

Intee (INL) Share Price on Australian Stock Exchange (ASX)

At the time of writing, the INL share price stands at A\$0.05, which represents a decline of 75% since listing at A\$0.20 just over one year ago on the ASX (see Figure 4). With 146,039,142 fully paid shares presently on issue (of which 23,965,992 remain under escrow until 2 May 2004), INL has a market capitalisation of just A\$7.3 million. And yet, since 1992, nearly A\$35 million has been invested in the successful development of the Intec Process by the Australian Government, major mining companies and

private institutional and retail investors: so the present share price represents a very low market valuation of INL.

So despite the considerable advancement of all of the technologies encompassed within the Intec Process (as updated above) the market currently places a low value on our company, including its intellectual property and the INL personnel who have so assiduously developed it.

It is evident and appropriate that, in the aftermath of the technology 'bubble', the market is looking for a clear path towards positive cashflows. In the case of minerals processing technology companies, this is best achieved by mining project acquisition and then enhancement of the value of that project using superior technology. Therefore, the Intec Board and management is intensely focussed on converting its technological excellence into commercially attractive project outcomes for the benefit of all shareholders.

Yours faithfully Intec Ltd

Philip R. Wood

Philip R Wood Managing Director and Chief Executive Officer