SCIDEV LTD — Regulatory Filings 2012

Aug 29, 2012

ABN 25 001 150 849

Level 3 Phone: 02-9954 7888 2 Elizabeth Plaza Fax: 02-8904 0334 North Sydney NSW 2060 Australia Email: mail@intec.com.au PO Box 1507 Website: www.intec.com.au North Sydney NSW 2059 Australia ASX code: INL ASX code: INL

Companies Announcements Office Australian Securities Exchange

30 August 2012

Preliminary 2012 Financial Report (Appendix 4E)

Intec Ltd provides its Preliminary Final Report in accordance with Appendix 4E for the financial year ended 30 June 2012.

Intec Ltd

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Kieran Rodgers Managing Director

ABN 25 001 150 849

P.O. Box 1507 North Sydney NSW 2059 Level 3, 2 Elizabeth Plaza North Sydney NSW 2060 Australia

Phone: (+61 2) 9954 7888 Fax: (+61 2) 8904 0334 Email: mail@intec.com.au Website: www.intec.com.au ASX code: INL

Preliminary Final Report in accordance with Appendix 4E

Financial year ended 30 June 2012

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ASX code: INL

-2Intec Ltd

RESULTS FOR ANNOUCEMENT TO THE MARKET

Particulars			30 June 2012		30 June 2011
			$’000		$’000
Revenues and other income from continuing operations	Down 66%	to	2,714	from	8,038
(Loss) profit from continuing operations	Down 299%	to	(3,039)	from	1,524
(Loss) profit for year attributable to members	Down 299%	to	(3,039)	from	1,524
			Amount per		Franked amount
Dividends			security		per security
Final dividend			Nil cents		Nil cents
Previous corresponding period			Nil cents		Nil cents
Record date for determining entitlement to dividend			Not applicable		Not applicable

Brief Explanation of any of the figures reported above

The Company and controlled entities (the Group) generated an operating loss after income tax of $3.039 million and net cash outflows from operations of $3.371 million in the year ended 30 June 2012. The operating loss included impairment expenses of $0.492 million and a full write-off of the carrying value of the Hellyer Royalty amounting to $1.184 million. As of balance date, the Group had net assets of $6.671 million and cash balances of $4.140 million. Cash balances include $2.740 million held as cash on deposit to support environmental bonds.

Low-Grade Zinc Blending Project

During the financial year, the Group completed the disposal of its legacy stockpiles of electric arc furnace (“EAF”) dust in both Tasmania and Victoria. The disposal of the stockpiles involved the blending of EAF dust with zinc-bearing slag material sourced from the Group’s Zeehan slag dump to produce a low-grade zinc-bearing product for export.

In relation to the Tasmanian stockpile, a cash-backed bond amounting to $756,000 was originally lodged with EPA Tasmania. At 30 June 2012, the remaining amount of the bond held by EPA Tasmania was $354,000, including accrued interest. Subsequent to yearend, $314,000 of the remaining bond amount has been returned to the Group. The Group has been advised that the remaining amount of $40,000 will be returned following the completion of minor remediation works at the Hellyer stockpile site.

The Group had previously lodged a cash-backed $3.648 million environmental bond with EPA Victoria in relation to the Victorian EAF dust stockpile site. During the financial year, $1.260 million of the bond was returned to the Group. Since the end of the financial year, the Group has delivered to EPA Victoria an environmental audit report as required by relevant legislation. This report has now been assessed by EPA Victoria and the remaining bond amount, $2.387 million, has been returned to the Group. Accordingly, the provision raised against the environmental bond lodged with the EPA Victoria was reversed resulting in a credit to the profit and loss account of $3.648 million at 30 June 2012.

Hellyer Royalty

The Group held a 100% interest in the Hellyer Royalty, which was a unit-based royalty payable by Bass Metals Limited (BSM) determined on tonnes of ore processed through the Hellyer Mill. As a result of participating in the 2011 BSM rights issue, Intec exchanged cash royalty payments in relation to completed and anticipated minerals processing for the September and December quarters of 2011/12 for 3.1 million BSM shares at $0.15 per share (each with a free attached 3-year listed option exercisable at $0.20).

The closing market price at 30 June 2012 of BSM shares and BSM options was 1.3 cents and 0.001 cents respectively, valuing the Group’s holding at $43,400 (3.1 million shares at 1.3 cents/share and 3.1 million options at 0.001 cents/option). An impairment expense of $421,600 was therefore raised against the BSM investment book value of $465,000.

During the 2012 June quarter, the Group received a payment of $345,046 for Hellyer processing activities conducted during the March 2012 quarter. Since the end of the financial year, the Group received a further payment of $453,737 for Hellyer processing activities conducted during the June 2012 quarter.

On 9 July 2012, the Group announced that it had agreed a re-structuring of the Hellyer Royalty with BSM. As a result, the Group has been granted a 2.5% Net Smelter Return Royalty (NSR Royalty) in relation to base metals extracted from the following tenements:

o RL11/1997: Mt Charter Retention Licence;

o EL48/2003: Mt Block Exploration Licence;

o EL24/2004: Bulgobac River Exploration Licence;

o CML103M/1987: Hellyer Mine Lease; and o ML68M/1984: Que River Mine Lease.

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ASX code: INL

-3Intec Ltd

The NSR Royalty is uncapped and BSM has no first right of refusal (or pre-emptive rights) over the NSR Royalty as was previously the case with the Hellyer Royalty. In addition, the Company was issued 15 million shares in BSM for nil consideration. Following, the restructuring, Intec holds a 5.85% interest in BSM.

The carrying value of the Hellyer Royalty was fully written-off as at 30 June 2012 resulting in an expense to the profit and loss account of $1.184 million. No value has been assigned to the NSR Royalty.

IRC Project

The Group was contracted to progress a comprehensive testwork and engineering programme for the design and development of a 25,000 tpa facility to recycle zinc and lead from a minerals processing residue in the Islamic Republic of Iran.

IRC Project work throughout the second half of 2011/12 has been the execution and completion of the ‘Milestone 1’ laboratory programme, which examined and refined each of the proposed unit operations. This work was successful, generating a range of improvements to enhance the provisional process flowsheet developed as part of a conceptual study in 2010. These refinements potentially offer better outcomes for the IRC Project in lower capital cost, lower operating costs, and decreased technical complexity in key areas.

An ‘Interim Milestone 1 Report’ was released to the client in early July 2012 to describe and interpret the results to the end of May 2012. The ‘Final Milestone 1 Report’, detailing the testwork results and external analyses from June and July 2012, has now been completed and delivered to the client. The next component of the development and engineering programme will involve pilot plant testwork and more detailed engineering. This work will commence following the receipt of previously agreed pre-payment amounts.

Rare Earth Metals Recycling

The Group is currently in discussion with a number of parties in relation to a possible transaction regarding the rare earth metals recycling technology. This might involve a party assuming responsibility for developing and funding the commercialisation of the technology, with appropriate support from Intec. These discussions are on-going, and any transaction would be subject to minimum value criteria for Intec shareholders.

Spent Pickle Liquor Recycling Project

The Group finalised the reporting from Phase 2 of the project (demonstration plant operations at Burnie) in the first half of the 2011/12 financial year. During the June 2012 quarter, the Group received formal advice from GB Galvanizing that it will not be committing to Phase 3 of the Spent Pickle Liquor Recycling Project, due to inadequate financial returns.

Intec Gold Process

During the year, the Group completed preliminary testwork on three refractory gold feedstocks as part of a mutual technology assessment programme: arsenopyrite, arsenopyrite-pyrite and pyrite-carbon. These trials were successful in respect of the first two samples, with 90-95% of the gold extracted. Further laboratory testwork took place at an independent laboratory in Denver during February 2012. Following, receipt of the report from an independent laboratory on the testwork programme, the other party involved in the mutual technology assessment has advised the Group that it has withdrawn from further discussions regarding commercialisation of the Intec Gold Process. The Company will now consider alternative commercialisation strategies.

Share Placement

On 7 February 2012, the Group received commitments to raise $1.25 million through a share placement of 83.333 million fully paid ordinary shares in the capital of the Group at 1.5 cents per share. Of the total Placement amount, 32.473 million shares ($487,092) were allotted on 8 February 2012 under the Group’s available 15% placement capacity pursuant to ASX Listing Rule 7.1. Shareholder approval was received for the remaining 50.861 million Placement shares ($762,908), including a separate approval for the participation in the Placement in the amount of $220,000 by Mr Kieran Rodgers, a director. The relevant resolutions were approved at an Extraordinary General Meeting of Shareholders held on 19 March 2012.

Board and Management Changes

John Moyes, a Non-executive Director, retired as a director at the 2011 Annual General Meeting. Philip Wood resigned as Managing Director and Chief Executive Officer on 6 February 2012 and was replaced by Kieran Rodgers, formerly the Chief Financial Officer.

Events Occurring after Balance Date

No significant matters occurred after balance date other than those specifically referred to above.

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ASX code: INL

-4-

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2012

Revenue from continuing operations Administration expense Burnie research facility expenses Depreciation and amortisation expense Engineering and other consultants expenses Employee benefits expense Finance costs Recouped environmental bond Hellyer royalty written-off Impairments expense Occupancy expense Research and development expenses Treatment expense Other expenses Profit(loss) before income tax Income tax expense(benefit) Profit(loss) after income tax Other comprehensive income(loss) Income tax relating to components of other comprehensive income Other comprehensive income(loss) for the period net of income tax Total comprehensive income(loss) for the period Profit(loss) is attributable to: Owners of Intec Ltd Non-controlling interests Basic Earnings per share (cents per share) Diluted Earnings per share (cents per share)	Year ended 30 June 2012 30 June 2011 $’000 $’000 2,714 8,038 (571) (803) (136) (156) (859) (815) (761) (374) (2,493) (2,553) (41) (42) 3,648 778 (1,184) - (492) (325) (323) (343) (271) (32) (2,216) (2,256) (54) -
	(3,039) 1,117 - 407
	(3,039) 1,524 - - - -
	- -
	(3,039) 1,524
	(3,098) 1,524 59 -
	(3,039) 1,524
	Cents Cents (1.25) 0.83 (1.25) 0.82

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

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ASX code: INL

Intec Ltd

-5-

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2012

ASSETS Current assets Cash and cash equivalents Trade and other receivables Cash on Deposit - Environmental bonds Inventories Total current assets Non-current assets Trade and other receivables Other financial assets Plant and equipment Environmental bonds Intangible assets Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables Provisions Total current liabilities Non-current liabilities Provisions Total non-current liabilities Total liabilities Net assets EQUITY Contributed equity Reserves Accumulated losses Total equity attributable to equity holders of the Company Non-controlling interest Total equity	Year ended 30 June 2012 30 June 2011 $’000 $’000 1,400 2,557 539 911 2,740 567 33 43
	4,712 4,078
	161 2,919 271 28 2,041 2,701 - 3,660 10 10
	2,483 9,318
	7,195 13,396
	200 856 323 4,082
	523 4,938
	1 21
	1 21
	524 4,959
	6,671 8,437
	71,642 70,416 2,624 2,577 (67,654) (64,556)
	6,612 8,437 59 -
	6,671 8,437

The above consolidated statement of financial position should be read in conjunction with the accompanying notes. .

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ASX code: INL

Intec Ltd

-6-

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2012

Balance at 1 July 2010 Total comprehensive income for the period Shares issued during the period, net of transaction costs Balance at 30 June 2011 Balance at 1 July 2011 Employee options granted Shares issued during the period, net of transaction costs Total comprehensive income for the period Balance at 30 June 2012	Contributed Equity Reserves Accumulated Losses $’000 $’000 $’000 68,978 2,577 (66,080) - - 1,524 1,438 - -	Non Controlling Interest Total $’000 $’000 - 5,475 - 1,524 - 1,438
	70,416 2,577 (64,556)	- 8,437
	$’000 $’000 $’000 70,416 2,577 (64,556) - 47 - 1,226 - - - - (3,098)	$’000 $’000 - 8,437 - 47 - 1,226 59 (3,039)
	71,642 2,624 (67,654)	59 6,671

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

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ASX code: INL

Intec Ltd

-7-

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2012

Cash flows from operating activities Receipts from customers Payment to suppliers and employees Interest paid Interest received R&D tax offset received Other receipts Net cash (outflows)inflows from operating activities Cash flows from investing activities Acquisition of plant and equipment Proceeds from the sale of plant and equipment Payments for security deposits Proceeds from security deposits refunded Purchase of shares in listed company Purchase of shares in unlisted company Net cash (outflows)inflows from investing activities Cash flows from financing activities Proceeds from issue of shares Repayment of borrowings Share issue costs Net cash inflows(outflows) from financing activities Net increase(decrease) in cash held Cash at the beginning of the financial period Cash at the end of the financial period	Year ended 30 June 2012 30 June 2011 $’000 $’000 3,075 1,108 (7,744) (5,264) (38) (52) 242 297 - 407 1,094 5,013
	(3,371) 1,509
	(239) (91) 49 - (45) 1,643 95 (465) - - (1)
	988 (42)
	1,250 1,483 - (540) (24) (45)
	1,226 898
	(1,157) 2,365 2,557 192
	1,400 2,557

The above consolidated statement of cash flow should be read in conjunction with the accompanying notes.

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ASX code: INL
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Intec Ltd

-8-

Reconciliation of cash

Reconciliation of cash Reconciliation of cash at the end of the year (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows: Cash on hand and at bank Total cash at end of financial year Reconciliation of operating profit (loss) after income tax to net cash inflows (outflows) from operating activities Operating profit (loss) after income tax Non cash items and operating cash flows included in profit and loss: Bad and doubtful debts expense Administration expense Depreciation and amortisation Recouped (expensed) environmental bond Hellyer royalty written-off Impairments expense Options income Unrealised foreign exchange loss Changes in assets and liabilities: Decrease(increase) in trade and other receivables Decrease (Increase) in environmental bonds Decrease(increase) in inventories Increase(decrease) in trade and other payables Increase(decrease) in provisions Net cash inflows (outflows) from operating activities	Year ended 30 June 2012 30 June 2011 $’000 $’000 1,400 2,557
	1,400 2,557
	(3,039) 1,524 - 1 520 70 859 815 (3,648) 325 1,184 492 - 46 (98) 3 -
	(3,583) 2,637
	3,130 (814) 1,487 - 10 (5) (656) 173 (3,759) (482)
	212 (1,128)
	(3,371) 1,509

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ASX code: INL

-9-

Control gained or loss of control over entities having material effect

Control gained over entities having material effect

Name of entity (or group of entities)

Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) since the date in the current period on which control was acquired:

Date from which such profit (loss) has been calculated:

Profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) for the whole of the previous corresponding period:

Loss of control of entities having material effect

Name of entity (or group of entities)

Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) to the date of loss of control:

Date to which such profit (loss) has been calculated:

Consolidated profit (loss) from ordinary activities and extraordinary items after tax of the controlled entity (or group of entities) while controlled during the whole of the previous corresponding period:

Contribution to consolidated profit (loss) from ordinary activities and extraordinary items from the sale of the interest leading to the loss of control:

Not applicable

Not applicable Not applicable

Not applicable Not applicable Not applicable Not applicable

Not applicable Not applicable

Dividends

Dividends
Date the dividend is payable Record date to determine entitlements to the dividend No final dividend has been declared Consolidated accumulated losses Accumulated losses at the beginning of the financial year Net profit (loss) attributable to members Accumulated losses at the end of the financial year	Not applicable Not applicable Not applicable 30 June 2012 30 June 2011 $’000 $’000 (64,556) (66,080) (3,098) 1,524
	(67,654) (64,556)

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ASX code: INL

-10- Intec Ltd

Other notes to the condensed financial statements

Other notes to the condensed financial statements
	30 June 2012	30 June 2011
	$’000	$’000
Ratios
Profit (loss) before tax/revenue and other income
Consolidated profit (loss) from continuing operations before tax as a
percentage of revenue and other income	(111.95)	13.96
Profit (loss) after tax/equity interests
Consolidated net profit (loss) after tax attributable to members as a
percentage of equity (similarly attributable) at the end of the year	(46.87)	19.04
NTA Backing
Net tangible assets per ordinary share	2.22	3.90
Earnings per security (EPS)
Profit (loss) per share from continuing operations attributable to
ordinary equity holders of the company:
Basic earnings (loss) per share (cents per share)	(1.25)	0.83
Diluted earnings (loss) per share (cents per share)	(1.25)	0.82
Diluted earnings (loss) per share
Profit (loss) per share
attributable to ordinary equity holders of the company:
Basic earnings (loss) per share (cents per share)	(1.25)	0.83
Diluted earnings (loss) per share (cents per share)	(1.25)	0.82
Weighted average number of ordinary shares outstanding during the
period used in calculating the basic earnings (loss) per share	243,002,604	184,085,091
Weighted average number of ordinary shares outstanding during the
period used in calculating the basic earnings (loss) per share	243,002,604	185,911,091

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ASX code: INL

-11- Intec Ltd

Segment reporting – business segments, 2012

Segment reporting – business segments, 2012
(i) Segment revenue Sales to external customers Total sales revenue Other revenue Total segment revenue Intersegment elimination Unallocated revenue Consolidated revenue (Ii) Segment result Segment profit (loss) Intersegment elimination Unallocated profit (loss) Profit (loss) before income tax Income tax benefit (expense) Profit (loss) for the year Segment assets & liabilities Segment assets Intersegment elimination Unallocated assets Total assets Segment liabilities Intersegment elimination Unallocated liabilities Total liabilities Other segment information Acquisition of plant & equipment Unallocated Total acquisition Depreciation expense Cash flow information Net cash flow from operating activities Unallocated Total cash flows from operating activities Net cash flow from investing activities Unallocated Total cash flow from investing activities Net cash flow from financing activities Unallocated Total cash flow from financing activities	Discontinued Operations (Metal in concentrate) $’000 -	R & D $’000 2,450	Consolidated $’000 2,450
	- -	2,450 14	2,450 14
	- - - - - - - - - -	2,464 - (261) 4,942 323 (232) 859 (1,826) 1,643 -	2,464 - 250
			2,714
			(261) - (2,778)
			(3,039) -
			(3,039)
			4,942 - 2,253
			7,195
			323 - **201 **
			524
			(232) (7)
			(239)
			859 (1,826) (1,545)
			(3,371)
			1,643 (655)
			988
			- 1,226
			1,226

ASX code: INL

-12- Intec Ltd

Segment reporting – business segments, 2011

(i) Segment revenue Sales to external customers Total sales revenue Other revenue Total segment revenue Intersegment elimination Unallocated revenue Consolidated revenue (Ii) Segment result Segment profit (loss) Intersegment elimination Unallocated profit (loss) Profit (loss) before income tax Income tax benefit (expense) Profit (loss) for the year Segment assets & liabilities Segment assets Intersegment elimination Unallocated assets Total assets Segment liabilities Intersegment elimination Unallocated liabilities Total liabilities Other segment information Acquisition of plant & equipment Unallocated Total acquisition Depreciation expense Cash flow information Net cash flow from operating activities Unallocated Total cash flows from operating activities Net cash flow from investing activities Unallocated Total cash flow from investing activities Net cash flow from financing activities Unallocated Total cash flow from financing activities	Discontinued Operations (Metal in concentrate) $’000 -	R & D $’000 1,775	Consolidated $’000 1,775
	- -	1,775 -	1,775 -
	- - 2,756 - - - - - -	1,775 (1,207) 7,091 4,115 - 707 (282) 95 -	1,775 - 6,263
			8,038
			(1,207) - 2,324
			1,117 407
			1,524
			9,847 - 3,549
			13,396
			4,115 - 844
			4,959
			- 91
			91
			815 (282) 1,791
			1,509
			95 (138)
			(43)
			- 899
			899

ASX code: INL

-13- Intec Ltd

2012 Audit

The financial report is based on accounts which are in the process of being audited. The audit report is expected to contain qualifications in respect of both the carrying value of the Burnie Research Facility and the impairment of the Hellyer Royalty. Refer below to the Directors’ response to these matters.

Basis of Preparation

The financial report has been prepared in accordance with Accounting Standards, Urgent Issues Group Consensus Views and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.

The financial report has been prepared on an accruals basis and is based on historical costs except as modified by revaluation of certain non-current assets and, except where stated, does not take into account either changing money values or current valuations of non-current assets. Cost is based on the fair values of the consideration given in exchange for assets.

The Group generated an operating loss after income tax of $3.039 million and net cash outflows from operations of $3.371 million in the year ended 30 June 2012. As of balance date, the Group had net assets of $6.671 million and cash balances of $4.140 million. Cash balances include $2.740 million held as cash on deposit to support environmental bonds.

Going Concern Basis

The financial report has been prepared on a going concern basis. The Directors consider the Group has adequate funding and therefore, no adjustments have been made to the financial report that might be necessary should the Group not continue as a going concern. Accordingly, the Directors have prepared the financial report on a going concern basis.

Burnie Research Facility

While there is significant uncertainty, the Directors consider that it is unlikely that the carrying value of non-current assets, in particular the Burnie Research Facility, would exceed the realisable value of such assets in an orderly sale process. The carrying value of the Burnie Research Facility is $1.713 million at 30 June 2012. The Group generated revenue through the Burnie Research Facility under contracts for the treatment of industrial wastes and the provision of engineering services to third parties for the year to 30 June 2012 and will continue to do so in the short to medium term under either existing or new commercial arrangements. Accordingly, the Directors have made no adjustment to the carrying value of the Burnie Research Facility at 30 June 2012.

Hellyer Royalty

On 9 July 2012, the Group announced that it had agreed a re-structuring of the Hellyer Royalty with BSM. As a result, the Group has been granted a 2.5% Net Smelter Return Royalty (NSR Royalty) in relation to base metals extracted from the following tenements:

• RL11/1997: Mt Charter Retention Licence;

• EL48/2003: Mt Block Exploration Licence;

• EL24/2004: Bulgobac River Exploration Licence;

• CML103M/1987: Hellyer Mine Lease; and

• ML68M/1984: Que River Mine Lease.

The NSR Royalty will be uncapped and Bass will have no first right of refusal (or pre-emptive rights) over the NSR Royalty as was previously the case with the Hellyer Royalty. In addition, Intec was issued 15 million shares in BSM for nil consideration. The Group previously held 3.1 million BSM shares and 3.1 million BSM options exercisable at $0.20. Following, the re-structuring, the Group holds a 5.85% interest in BSM.

The carrying value of the Hellyer Royalty was fully written-off as at 30 June 2012 resulting in an expense to the profit and loss account of $1.184 million. The Group’s carrying value of the Hellyer Royalty was based on the carrying value contained in the financial statements of BSM less royalty payments received. The Directors believe that this represented an appropriate valuation of the Hellyer Royalty and the subsequent impairment measure. No carrying value has been assigned to the NSR Royalty.

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ASX code: INL

-14- Intec Ltd

Accounting Policies

The Appendix 4E does not include notes of the type normally included within the annual financial report and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and the financing and investing activities of the Group as the full financial report.

The Appendix 4E should be read in conjunction with the Half-year Financial Report of Intec as at 31 December 2011 and the Annual Financial Report of Intec, due to be released in September 2012, for the year ended 30 June 2012. It is also recommended that the Appendix 4E be considered together with any public announcements made by the Group during the year ended 30 June 2012 in accordance with the continuous disclosure obligations arising under the Corporations Act, 2001.

Material Factors Affecting the Revenues and Expenses of the Economic Entity for the Current Year

The Group had previously lodged a $3.648 million environmental bond with EPA Victoria in relation to the Victorian EAF dust stockpile site. During the year, $1.260 million of the bond amount was returned to the Group. Since the end of the year, the remaining bond amount, $2.387 million, has been returned to the Group. Accordingly, the provision raised against the environmental bond was reversed resulting in a credit to the profit and loss account of $3.648 million at 30 June 2012.

The closing market price at 30 June 2012 of BSM shares was 1.3 cents and the BSM options were 0.001 cents valuing the Group’s holding at $43,400 (3.1 million shares at 1.3 cents/share and 3.1 million options at 0.001 cents/option). An impairment expense of $421,600 was therefore raised against the BSM investment book value of $465,000.

The carrying value of the Hellyer Royalty was fully written-off as at 30 June 2012 resulting in an expense to the profit and loss account of $1.184 million.

No other matters or circumstances have arisen since 30 June 2012 that have significantly affected or may significantly affect the Group’s operations in future financial years, or the results of those operations in future financial years, or the Group’s state of affairs in future financial years.

There are no franking credits available. The Company is not expected to declare a dividend in the short term.

Compliance Statement

The financial report is based on accounts which are in the process of being audited. The audit report is expected to contain qualifications in respect of both the carrying value of the Burnie Research Facility and the impairment of the Hellyer Royalty.

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Kieran G. Rodgers Managing Director

30 August 2012

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ASX code: INL