SCIDEV LTD — Interim / Quarterly Report 2010

Jul 29, 2010

ABN 25 001 150 849

Level 3 2 Elizabeth Plaza North Sydney NSW 2060 Australia PO Box 1507 North Sydney NSW 2059 Australia

Phone: 02-9954 7888 Fax: 02-8904 0334 Email: mail@intec.com.au Website: www.intec.com.au ASX code: INL

Companies Announcements Office 30 July 2010 Australian Securities Exchange

Quarterly Activities Report: Appendix 4C June 2010

On behalf of Intec Ltd (ASX code: INL, or the Company), I now attach the June 2010 Quarterly Report for Entities Admitted on the Basis of Commitments (Appendix 4C).

Highlights

• EPA Victoria has approved milestone funding of the Phase 2 commercial trials for the galvanising industry project. The focus of activity at Intec's Burnie Research Facility continues to be the preparation for this work.
• Following successful completion of Phase 1 continuous pilot plant trials, Intec has now received all scheduled payments for this phase of the $2.85 million project, under the $780,000 EPA Victoria HazWaste funding support agreement.
• Intec's China based associate, Green Resources, has continued to advance its feasibility studies in respect of industrial solid waste treatment projects in China. It is currently assessing relative predicted returns for the proposed Liuzhou Project against an alternative site in Hunan Province. In a July update to Intec, Green Resources stated that "the decision will be made in three months. The first Green Resources commercial project is scheduled to be commenced by the end of the year".
• Intec's heavy metal recycling operation at Burnie won the "Environmental Solution of the Year Award" at the 7th Annual Manufacturers' Monthly Endeavour Awards, and was a finalist for the July 2010 "Sulo Innovation in Sustainability Award".
• Building on this success, Intec has received samples of mainland electroplating waste to further examine the possibility of adding a low-cost 'bolt-on' chromium recovery capability to the existing Burnie recycling operation.
• Intec has continued to advance its proprietary application of the Intec Process to unlock the value of the Browns Sulphide bulk concentrate, in respect of which technology the company retains full intellectual property rights.
• The 30 June 2010 Extraordinary General Meeting of shareholders approved two resolutions in favour of the La Jolla Cove Investors convertible notes, as well as the consolidation of Intec's share capital on a 1 for 10 basis. This consolidation was completed on 15 July 2010.
• Bass Metals has stated that its Hellyer Mine Project, from which royalties capped at A$5 million are payable to Intec at a rate of $2.50 per tonne throughput, remains on schedule "to be in production and selling concentrates in the December Quarter of this year".
• The Company's total cash available at the end of the quarter was A$192,000.

Operations Update

Chinese Projects

As reported in the March 2010 Quarterly report, three senior Intec executives, Kieran Rodgers (Finance Director), Dave Sammut (Corporate Development Manager) and Andrew Tong (Head of Technology) visited China for a week in mid-April to tour various Green Resources project sites, including those for the Liuzhou and Nandan opportunities. Following that visit, Green Resources has continued to advance the projects under development, with a particular focus on the Liuzhou steel industry waste project.

Liuzhou Project

The most recent update from Green Resources (16 July 2010) states that: "The feasibility study of the industrial solid waste treatment project(s) in China is being finalized. The validation test work on treating 50,00tpa of furnace dust, as a part of the feasibility study is successfully completed, and extractions of 98% zinc, 98% lead and 93% iron are being achieved."

The update goes on to state that: "The extracted metals are recovered in value-added saleable products meeting local end-user requirements with the local industrial specifications. In addition, fine and high-carbon content product is recovered from the leach residue, leaving behind lowcarbon and silica-rich materials for other recycling applications. During the treatment process, high grade calcium sulphate is also produced for either direct sale or further processing into an effective waste water treatment reagent and hence a zero solid waste solution becomes a reality."

Green Resources has advised that its current feasibility study compares the relative returns for the proposed 50,000tpa project at the Liuzhou site against an alternative site in Hunan Province. The outcome of this study will be submitted for formal consideration and, as stated by Green Resources in its report: "the decision will be made in three months. The first Green Resources commercial project is scheduled to be commenced by the end of this year."

Calcium Sulphide Project

Another Green Resources project, producing high-grade calcium sulphide for waste processing and minerals applications, is due to commence operation in October 2010.

Although the production of calcium sulphide does not utilise the Intec Process directly, it is an effective way to create value-added products to enhance project returns. In addition, this product can be an important material for certain proposed Intec Process projects, either as a feedstock, as a co-product, and/or as a product of further processing of high-purity calcium sulphate by-product from the Intec Process.

As such, Intec welcomes the prospective inauguration of the 1,500tpa facility in Hunan Province, and congratulates Green Resources on this first successful implementation of commercial technology that is supportive of the Intec Process.

Burnie Research Facility

Galvanizing Industry Project

Formal approval from EPA Victoria for Phase 2 of the technology development programme to recycle spent pickle liquor and other wastes from the galvanizing industry was received on 29 July 2010.

As previously announced, this technology optimisation and implementation project has been generously supported by EPA Victoria with the approval of $780,000 of HazWaste funding for the research, demonstration and engineering portion of the proposed $2.85 million project. This funding is provided through a formal agreement between EPA Victoria and Intec's Victorian project partner, GB Galvanizing Service Pty Ltd (GBG).

Following the successful conduct by Intec of continuous pilot plant trials over 175 hours of operation, Intec (as the technology service provider) has now received all scheduled payments through GBG for the completion of Phase 1. The pilot plant operation demonstrated the recovery and electrowinning of

zinc metal product, and also iron separation and recovery, yielding key engineering and process data for Phase 2 of the programme.

In Phase 2, specialised product recovery equipment will be constructed and operated at Intec's Burnie Research Facility, and 50,000 litres of GBG's spent galvanizing pickle liquor will be recycled on a zero waste basis. The technology will produce high quality zinc (to be used directly in the galvanizing bath), replenished acid (to be reused by the galvanizer as fresh pickle acid), and saleable hematite and gypsum by-products.

Adam Randall (Plant Manager) holding a bar of zinc metal produced in 2006 at Intec's Burnie Research Facility.

The Burnie staff are already engaged in the detailed process flow diagram and piping and instrumentation designs required for the project, and selection and reconfiguration of the relevant engineering items required for the upcoming work.

It is anticipated that the current Phase 2 work will be completed in the December quarter of 2010. In 2011, if Phase 2 has confirmed its technical and economical feasibility, Phase 3 of the project will involve the construction of a full-scale spent pickle liquor recycling project at GBG's operating site in Victoria, for the recycling of a minimum of 1,000,000 litres per annum of waste.

Commercial Heavy Metals Recycling

The Burnie recycling facility processed, under an ongoing arrangement, additional electroplating waste from ACL. These works were successfully conducted to the stringent environmental standards developed by Intec and overseen by the EPA Tasmania and the local municipal regulatory authority.

As part of the continuous pursuit of new markets for the services relevant to Intec's assets, the Burnie operation conducted bulk recycling of commercial quantities of lead cupel waste resulting from the laboratory assaying of mining industry production samples. These cupels were recycled using the same Intec Process applied to the electroplating waste generated by ACL. Recycling of this material is expected to continue.

Intec has also received samples from the mainland electroplating industry as part of the ongoing efforts to expand the range of services offered at its Burnie recycling facility, and to increase the waste recycling revenues at that site. The current aim is to build upon the established Intec intellectual property and infrastructure at minimal cost, by incorporating a 'bolt-on' chromium recycling step which could significantly enhance Intec's capabilities in a market segment with a pressing environmental need and relatively little competition.

Australian Manufacturing Awards

Intec's Burnie recycling operation was again recognised during the June 2010 Quarter, being announced winner of the "Environmental Solution of the Year Award" at the 7th Annual Manufacturers' Monthly Endeavour Awards.

The operation has was also a finalist for the 2010 "Sulo Innovation in Sustainability Award", announced at the Enviro 2010 conference gala dinner in Melbourne on 22 July.

Intec congratulates the whole Burnie team on the recognition that their ongoing efforts have brought to the Company.

Dave Sammut, Intec's Corporate Development Manager, made a presentation at the Enviro 2010 conference on behalf of Intec. Although video was not permitted by the conference organisers, a copy of the presentation and the associated conference paper are available on Intec's website (wwwxintecxcomxau).

Andrew Tong (Head of Technology) accepting the Environmental Solution of the Year award on behalf of Intec. (photo courtesy Manufacturer's Monthly)

Browns Sulphide Project Testwork

The Browns Sulphide polymetallic deposit in the Northern Territory is co-owned by Compass Resources Limited (currently in administration and receivership) and Hunan Nonferrous Metals Corporation Ltd. Efforts are currently underway to recapitalize Compass Resources and reinstitute the joint venture between the parties.

Throughout 2010, Intec has continued to expend a very modest amount of resources on advancing a proposed process flowsheet utilising the Intec Process to unlock the value of the metallurgically complex lead, cobalt, nickel and copper bulk concentrate produced from Browns Sulphide ore.

The company anticipates that the Intec Process can potentially be transformative to the economics of the project. The current work is intended to advance Intec's position as the critical technology supplier to unlock the value of the ore, through the selective removal of the lead (representing the greatest metal value in the ore) prior to subsequent recovery of other metals as smelter-grade concentrates via conventional technologies.

A 10kg sample of Intec Process residue from the previously-reported laboratory-scale pilot plant campaign, containing <1% lead (representing 95-98% selective lead extraction from the bulk polymetallic concentrate using the Intec Process) is currently being subject to testwork with Ammtec Limited to assess the metallurgical performance of the remaining copper, cobalt and nickel minerals via conventional flotation.

Intec retains its intellectual property rights to this metallurgical treatment route for the Browns Sulphide deposit, and believes that its very modest expenditures on this work offer the potential to add substantial value to the Browns Sulphide Project

Corporate

Extraordinary General Meeting

At an Extraordinary General Meeting of shareholders held on 30 June 2010, three resolutions were approved by shareholders:

• 1. Approval for the ratification of the issue of the La Jolla Note, and the Company's ordinary shares upon conversion thereof, to La Jolla Cove Investors Inc.;
• 1. Approval for the acquisition of a relevant interest in the Company by La Jolla Cove Investors Inc. and its associates to the extent and on the terms set out in the Explanatory Memorandum; and
• 1. Approval for the Company to consolidate its share capital as detailed in the attached Explanatory Statement so that each ten ordinary shares on issue in the capital of the Company at the record date of 8 July 2010 is consolidated into one share, with fractions rounded up.

The three resolutions were passed by unanimous show of hands. Additionally, proxy votes for each resolution were greater than 98% in favour of Resolutions 1 and 2, and greater than 86% in favour of Resolution 3. New Holding Statements taking into account the effect of the share consolidation were dispatched to Intec shareholders on 15 July 2010.

Finance

In regard to the A$5 million capped royalty payable by Bass Metals Limited to Intec at the rate of $2.50 per tonne processed through the Hellyer Mill, Bass provided an operations update on 9 June 2010. This noted that the Hellyer Mine Project "is on schedule to be in production and selling concentrates in the December Quarter of this year."

The Directors consider that the Company's available cash, receivables and other liquid current assets are sufficient for its immediate working capital requirements and that additional capital will be raised as required.

Yours faithfully Intec Ltd

Philip R. Wood

Philip R Wood Managing Director and Chief Executive Officer

Rule 4.7B

Appendix 4C Quarterly report for entities admitted on the basis of commitments

Introduced 31/3/2000. Amended 30/9/2001

Name of entity
Intec Ltd
ABN		Quarter ended ("current quarter")
25 001 150 84930 June 2010
Consolidated statement of cash flows
Cash flows related to operating activities	Currentquarter$A'000	Year to date(12 months)$A'000
1.1 Receipts from product sales and related debtors	194	579
1.2 Payments for
(a) advertising and marketing	-	(8)
(b) hydrometallurgical process development	(407)	(1,770)
(c) HZCP joint venture costs	-	(215)
(d) administration costs and corporate overheads	(461)	(2,104)
1.3 Dividends received	-	-
1.4 Interest and other items of a similar nature received	54	162
1.5 Interest and other costs of finance paid	(15)	(50)
1.6 Income tax rebate received	-	-
1.7 Other income	-	53
Net Operating Cash Flows	(635)	(3,353)
Cash flows related to investing activities1.9 Payment for acquisition of:
(a) businesses	-	-
(b) equity investments	-	-
(c) intellectual property	-	-
(d) physical non current assets	(5)	(32)
(e) other non current assets	-	-
1.10 Proceeds from disposal of:
(a) businesses	-	-
(b) equity investments	-	-
(c) intellectual property	-	-
(d) physical non current assets	-	3,510
(e) other non current assets	-	-
1.11 Loans to other entities	-	-
1.12 Loans repaid by other entities	-	-
1.13 Other: Hellyer EAFD Security Deposit Paid	-	(3,647)
Other: Cost of Sale of Hellyer assets	-	(295)
Other: Security Deposits Repaid	-	-
Net investing cash flows	(5)	(464)
1.14 Total operating and investing cash flows	(640)	(3,817)

	Currentquarter$A'000	Year to date(12 months)$A'000
Cash flows related to financing activities
1.15 Proceeds from issues of shares, options, etc.	460	1,783
1.16 Proceeds from sale of forfeited shares	-	-
1.17 Proceeds from borrowings	101	445
1.18 Repayment of borrowings	(23)	(106)
1.19 Dividends paid	-	-
1.20 Other (provide details if material)
Share Issue Costs	-	(57)
Foreign Exchange Call Option	-	(46)
Net financing cash flows	538	2,019
Net increase (decrease) in cash held	(102)	(1,798)
1.21 Cash at beginning of quarter/year	294	1,990
1.22 Exchange rate adjustments to item 1.20	-	-
1.23 Cash at end of quarter/year	192	192

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.24 Aggregate amount of payments to the parties included in item 1.2	10
1.25 Aggregate amount of loans to the parties included in item 1.10	-

1.26 Explanation necessary for an understanding of the transactions

			Salaries, Directors fees and consultancy fees at normal commercial rates.

Non-cash financing and investing activities

Nil

2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest Nil

Nil
-----

Financing facilities available

Add notes as necessary for an understanding of the position.

	Amount	Amount
	available	used
	$A'000	$A'000
3.1 Loan facilities
3.2 Credit standby arrangements	Nil	Nil

Reconciliation of cash

Reconciliation of cash at the end of the quarter (as shown in the	Current	Previous
consolidated statement of cash flows) to the related items in the	quarter	quarter
accounts is as follows.	$A'000	$A'000
4.1 Cash on hand and at bank	192
4.2 Deposits at call		285
4.3 Bank overdraft
4.4 Other - 30 day bank bills
Total: cash at end of quarter (item 1.23)	192	294

Acquisitions and disposalsof business entities	Acquisitions$($ ltem 1.9 $(a)$ $)$	Disposals$($ ltem 1.10 $(a)$ )
5.1 Name of entity5.2 Place of incorporation or registration5.3 Consideration for acquisition or disposal5.4 Total net assets
5.5 Nature of business

Compliance statement

• $\mathbf{1}$ This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act (except to the extent that information is not required because of note 2) or other standards acceptable to ASX.
• $\overline{2}$ This statement does/does not give a true and fair view of the matters disclosed.

Philip R. Wood

Sign here:

(Director/Company Secretary)

Date: 30 July 2010

Print name:

Philip R. Wood

Notes

• 1. The quarterly report provides a basis for informing the market how the entity's activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.
• 1. The definitions in, and provisions of, AASB 1026: Statement of Cash Flows apply to this report except for the paragraphs of the Standard set out below.
  • 6.2 reconciliation of cash flows arising from operating activities to operating profit or loss
  • 9.2 itemised disclosure relating to acquisitions
  • 9.4 itemised disclosure relating to disposals
  • 12.1(a) policy for classification of cash items
  • 12.3 disclosure of restrictions on use of cash
  • 13.1 comparative information
• 1. Accounting Standards. ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with.