SCIDEV LTD — Interim / Quarterly Report 2005

Jun 30, 2005

Intec Ltd

Superior and Sustainable Metals Production

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

1 July 2005

Dear Fellow Intec Shareholders

2004 - 2005: HALF-YEARLY SHAREHOLDER UPDATE

This letter will update you all on developments at Intec Ltd since our 28 October 2004 Annual General Meeting and is particularly directed to those shareholders who have not had ready electronic access to our various Australian Stock Exchange information releases over this period.

Intec's clear long term vision is to secure commercial interests in base and precious metals projects worldwide that benefit from its leading chloride hydrometallurgical technology. No doubt arising in part from the current resources boom, we continue to receive (and respond constructively to) a very high volume of local and international expressions of interest in the diverse applications of our technology, whether for the production of copper, nickel, zinc-lead-silver and/or gold.

In the short to medium term however, the Company is keenly focussed on the earliest paths to cashflow from the application of its polymetallic technology to the Hellyer Metals Project in Tasmania with which it is presently intensively involved.

The Hellver Metals Project

Burnie Demonstration Plant

During the past six months, virtually all of Intec's process engineering resources have been applied to the construction of the A$5 million Burnie demonstration plant (including its electrowinning cell built and commissioned in Sydney) which is now completed. Visitors to the plant are already commenting on the very high standards to which it has been built and Intec has greatly appreciated the excellence of the local Tasmanian equipment suppliers and service providers.

However, there will be no reprieve for our engineers and chemists as the commissioning of the plant is already under way. For this purpose, 17 personnel have been recently hired by the neighbouring Burnie Research Laboratory (owned by Ammtec Limited, ASX code: AEC, with which Intec works closely) to operate the plant and they are currently being trained to do so by Intec.

During the second half of calendar 2005 the demonstration plant program at Burnie will showcase all unit operations of the Intec Polymetallic Process for the Hellyer Metals Project (the Project). The first meaningful results from the Burnie demonstration plant are expected to become available towards the end of the September 2005 quarter, but shareholders should be mindful that commissioning of a minerals processing plant (particularly one recovering five different payable metals from refractory feed and using a novel technology) is an intrinsically challenging and uncertain exercise.

Figure 1: View of Intec's Burnie demonstration plant from the mezzanine floor above the control room overlooking the Base Metal and Pyrite Leach Trains on the right and the Leach Solution Purification Trains on the left. The five Pyrite Leach Reactors are followed by two small Flocculation Tanks ahead of the Pyrite Leach Thickener in the right foreground. Out of sight at the far right of the building is the Feed Preparation area and also two Base Metal Leach Reactors and their associated Thickener. At the far left of the Purification Train are the Reactors for EAF Dust followed by Iron Precipitation with Copper Precipitation and associated Thickener in the foreground. The Lead Cementation Reactors are adjacent to the EAF Dust Section. Out of view to the far left are the main Residue Filters and the Zinc Electrowinning Cell.

The Project contemplates co-treatment of Hellyer tailings with zinc-bearing secondary residues, notably such as electric arc furnace (EAF) dust. Thus 25 tonnes of EAF dust have already been received on-site at Burnie from Smorgon Steel and an EAF dust shipment from another producer is on its way.

Figure 2: View of a Jumbo Cathode ready for stripping of the zinc product after removal from the Zinc Electrowinning Cell at the end of a plating cycle. Each cathode produces up to 50kg per day of Special High Grade (99.99% purity) zinc. The Electrowinning Cell is partly visible to the left of the photo.

At the Department of Chemical Engineering within the University of Sydney, the zinc electrowinning cell has been run many times during the first half of calendar 2005 in order to optimise conditions for the production of smooth metallic pure zinc cathode. During this sustained exercise to address what until now has been seen as the greatest single technical risk for the Intec Polymetallic Process, Intec has greatly valued the advice proffered by Umicore Zinc Smelting, the world leader in zinc cell tankhouse design. Electrowinning of zinc in the chloride medium will be a world first when in commercial production at Hellyer. The cell will very shortly be shipped for installation in the Burnie demonstration plant under commissioning in July 2005.

WorleyParsons to lead the Bankable Feasibility Study (BFS) for the Project

On 21 June 2005, Intec appointed the Minerals and Metals Division of WorleyParsons (ASX code: WOR) to undertake the BFS for the Project. WOR is a global provider of quality engineering and project services to the resources industry, and has demonstrated particular strength in developing, implementing and optimising complex process plants. Among a range of sub-consultant independent experts agreed upon between Intec and WOR to cover various specialised aspects of the BFS, the key role of basic engineering plant design will be undertaken by Canadian-based H.G. Engineering, which has extensive experience in the design of plants using Intec's technology. It is anticipated that the BFS will be completed by 31 January 2006. (For further details see Intec's ASX announcement on 24 June 2005 which is available on our website at: www.intec.com.au/html/Home/ASX/Recent Announcements.shtm )

Hellver Mill

The Hellyer Mill is a 1.5mtpa crushing, grinding and flotation facility that dominates the northern part of the richly endowed geological zone known as the Mt Read Volcanics Belt. Intec is presently maintaining it under a comprehensive care and maintenance program. During June 2005 a preliminary test program was conducted using one of the Hellyer tower mills to grind nickeliferous ore from Allegiance Mining's Avebury mine. This has led to the proposal for a larger test programme during July and August 2005 using the Hellyer ball mill and flotation circuit, with a view to early commercial production thereafter of saleable nickel concentrates.

Additionally, Intec has agreed to provide 400,000 tonnes per annum of Hellyer mill capacity on commercial terms to Resource Finance and Investments Limited (see below). Intec is also actively investigating other toll treatment opportunities with other current and prospective regional producers.

Figure 3: On 15 June 2005 the Intec Group Directors visited Hellyer following their Board meeting in Burnie on 14 June 2005. The photo above shows (left to right) Mr Phil Evans (Intec's Owner's Representative for the BFS). Mr Kieran Rodgers (Managing Director, Intec Hellyer Metals Pty Ltd and CFO, Intee Ltd), Mr Philip Wood (Managing Director and CEO, Intee Ltd) and Mr Ian Ross (Non-executive Director, Intec Ltd). They are standing in the Hellyer Mill above the first stock tank load of tailings slurry to be fed over the next months into the Burnie demonstration plant. The tailings were extracted via an educting system off a barge on the Hellyer tailings dam and pumped three kilometres in slurry form through existing pipes to the Hellyer Mill (i.e. similar to what is being proposed for commercial scale), in readiness for filtration and then transportation to the Burnie demonstration plant.

Resource Finance and Investments Limited (RFI)

INL has vended its exploration licences in the vicinity of Hellyer into RFI in return for a 43.5% shareholding. Intec has nominated Mr Kieran Rodgers to the RFI board. After some delay due to recent adverse market conditions, RFI has negotiated certain additional commercial arrangements (including use of the Hellyer Mill referred to above) and is now firmly scheduled to lodge its prospectus in August 2005. Following a proposed capital raising of up to A$4 million, Intec will hold approximately 23% of RFI. (For more information please visit RFI's website: http://www.rfilimited.com/)

Corporate and Financial Matters

Board Changes

On 16 December 2004 Mr Gordon Toll resigned as a Non-executive Director of the Company and became the Alternate Director to Mr Ian Ross. The Intec Board wishes to express its considerable appreciation to Mr Toll for his vital contribution during the past three years. In particular, the Intec Board notes his assistance in the development of the Intec Gold Process and his involvement in the funding of both the Company and the Intec Gold Process pilot plant through his role as Deputy Chairman of Ivanhoe Mines Ltd (Intec's largest shareholder with 12.53% of Intec's issued and committed shares).

Also, on 1 April 2005 Mr J Philip Evans resigned as a Non-executive Director of the Company. Over the last ten years, Mr Evans has led the continuing close involvement with the Intec Process of H.G. Engineering, from which he recently stepped down as President. As Non-executive Director of Intec for the past four years, Mr Evans has availed the Company of his tremendous expertise, based on over 40 years experience in the operation and design of hydrometallurgical plants, particularly in relation to the Intec Gold Pilot Plant and the Hellyer Metals Project. We are very pleased that Mr Evans will retain a very close ongoing involvement with Intec through his new appointment as our Owner's Representative for the BFS, and by acting as Intec's North American Representative.

Finances

By early January 2005, the Company had successfully completed an aggregate A$12 million capital raising at 6.9 cents per share, comprising an A$7 million institutional placement lead managed by Grange Securities and RFC Corporate Finance and an A$5 million Shareholder Purchase Plan underwritten by Grange Securities. Intec had A$6,219,000 available cash at 31 May 2005.

These funds are principally being directed towards the Burnie demonstration plant programme, the completion of the BFS and to meet working capital requirements through until the completion of financing for the Hellyer Metals Project pursuant to the BFS.

During the reporting period and somewhat contrary to our hopes and expectations, the Company was unsuccessful in applying for an A$3 million Commercial Ready grant from the Australian Government. Despite the intrinsic merits of the application, it was noted that INL had already previously received two R&D Start grants.

To fill this gap in anticipated cashflows through to financial closure of the Hellyer Metals Project, on 22 June 2005 the Metals and Energy Capital Division of Macquarie Bank Limited (ASX Code: MBL) committed to provide a secured A$2,500,000 standby working capital facility to Intec while also taking a placement of A$500,000 worth of Intec shares at 6.9 cents per share. (For further details of this transaction, see Intec's ASX announcement on 23 June 2005, which is available on our website at:

www.intec.com.au/html/Home/ASX/Recent Announcements.shtm)

Importantly, Intec has agreed to mandate MBL to lead arrange the debt financing and associated hedging facilities for development of the Project. Additionally, MBL has submitted an Indicative Letter of Offer expressing its interest in financing possible additional project developments at Hellver, either by extending the Facility amount or providing an additional Project Debt Facility. Specifically, MBL will consider providing finance for the proposed refurbishment and operation of the Hellyer Mill to enable processing of base metal ores from regional producers (see above).

Intec's Share Price on the Australian Stock Exchange

At close of trading for the financial year on 30 June 2005, the Intec share price stands at A$0.065, which is close to the middle of its trading range over the past twelve months and near the level at which the A$12 million capital raising was undertaken (see Figure 4). With 431,925,979 fully paid shares presently on issue (including the placement to be made to MBL), Intec now has a market capitalisation of approximately A$28 million.

Figure 4: Intec's daily share price and trading volume since ASX listing up to 30 June 2005.

Outlook

Intec shareholders would no doubt concur that the stock market has so far given little credit for Intec's technical achievement in completing construction of the Burnie demonstration plant (including the electrowinning cell in Sydney) in just six months. Now the market will no doubt be looking to how favourably the plant's operational outcomes are reflected in the BFS. This then leads into the financing of the Project (prospectively to be undertaken by MBL), followed by the building and commissioning of the commercial plant at Hellyer (scheduled for completion by mid-2007 with production later that year). Only when all this has been successfully achieved will the market give full credence to the NPV of the Project, which the pre-feasibility study estimated to be a large multiple of Intec's current market valuation.

Intec's directors and senior management are very conscious of these challenges but consider that the Company is continuing to demonstrate its comprehensive ability to meet them and we therefore re-assert our oft-stated confidence in Intec's future success.

Yours sincerely IntecLtd

$\not!! Q$ Woo

Philip R Wood Managing Director and Chief Executive Officer

INTEC AT A GLANCE

Directors

Richard Jenkins-Chairman Philip Wood-Managing Director & CEO John Moyes-Technical Director Jan Ross-Non-executive Director Ken Severs-Non-executive Director

Senior Management

Kieran Rodgers - Business Development Manager & CFO Andrew Platts - General Manager, Hellver Metals Project Jean-Louis Huens - Chief Operations Officer Frank Houllis -- Process Development Manager Joe Lam - Senior Process Engineer & IT Manager Andrew Tong - Chief Development Chemist

Registered and Principal Office

Gordon Chiu Building J01 Department of Chemical Engineering Maze Crescent University of Sydney NSW 2006 Australia Ph +612-9351-6741 Fax +612-9351-7180 Email mail@intec.com.au

Number of Shareholders

At 30 June 2005 INL had 1.198 shareholders.

Major Shareholders

The share register records the following as major shareholders at 30 June 2005.

Orian Holding Corp	12.53%
Kizoz Pty Ltd	4.79%
Invia Custodian Pty Limited	3.54%
Mr Ian William Hodgson	3.52%
Excel Coal Limited	3.16%
Mosheva Pty Ltd	2.49%
Armada Trading Pty Limited	2.32%
Mr Peter Kenneth Everett	2.26%
UBS Nominees Pty Ltd	2.08%
National Nominees Limited	1.93%
ANZ Nominees Limited	1.83%
Macquarie Bank Limited	1.68%

Cash Balance

At 31 May 2005 INL's cash balance was A$6.219 million.

Market Canitalisation

A$28.1 million as at 30 June 2005 (including the issue of 7.246 million shares to Macquarie Bank Limited.)

ASX Listing Code

The Company's ASX listing code is INL.

Issued Capital

At 30 June 2005 INL's issued capital was 431,925,979 ordinary shares (including the issue of 7,246,377 million shares to Macquarie Bank Limited.)

Unlisted options:

$7.057.122$ 16 July 2007 Options – exercise price $0.24625

$4.626.008$ 26 November 2008 Options – exercise price $0.10

$1,275,000$ 30 June 2009 Options – exercise price $0.49625

$15,000,000$ 30 June 2008 Options – exercise price $0.08

$6.087,213$ 24 February 2010 Options – exercise price $0.069

Shareholder Enquiries

Matters relating to shares held and change of address should be directed to the share registry: Registries Limited Level 2, 28 Margaret Street Sydney NSW 2000 Ph: (02) 9290 9600

To receive INL's announcements by email, write down your e-mail address & fax to +612-9351-7180 or email to mail@intec.com.au.

Website

Please visit INL's regularly updated website at: www.intec.com.au

General Enquiries

Contact Philip Wood or Kieran Rodgers at INL's Sydney office by phoning $+612-9351-6741$ .