Company Overview O September 2010 September 2010 C
Disclaimer This document has been prepared as a summary only, and does not contain all information about the Company’s assets and liabilities, financial position and performance, profits and losses, prospects and the rights and liabilities attaching to the Company’s securities. This document should be read in conjunction with any public announcements and reports (including financial reports and disclosure documents) released by Indo Mines Limited. The securities issued by the Company are considered speculative and there is no guarantee that they will make a return on the capital invested, that dividends will be paid on the Shares or that there will be an increase in the value of the Shares in the future. Further details on risk factors associated with the Company’s operations and its securities are contained in the Company’s prospectuses and other Further details on risk factors associated with the Company s operations and its securities are contained in the Company s prospectuses and other relevant announcements to the Australian Stock Exchange. Some of the statements contained in this release are forward-looking statements. Forward looking statements include but are not limited to, statements concerning estimates of recoverable pig iron, expected product prices, expected costs, statements relating to the continued advancement of the Company’s projects and other statements which are not historical facts. When used in this document, and on other published information of the Company, the words such as “aim”, “could”, “estimate”, “expect”, “intend”, “may”, “potential”, “should” and similar expressions are forward-looking statements statements. Although the company believes that its expectations reflected in the forward-looking statements are reasonable, such statements involve risk and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Various factors could cause actual results to differ from these forward-looking statements include the potential that the Company’s projects may experience technical, geological, metallurgical and mechanical problems, changes in product prices and other risks not anticipated by the Company or disclosed in the Company’s published material. The Company does not purport to give financial or investment advice. No account has been taken of the objectives, financial situation or needs of any recipient of this document. Recipients of this document should carefully consider whether the securities issued by the Company are an appropriate investment for them in light of their personal circumstances, including their financial and taxation position. The information in this report that relates to Exploration Results and Mineral Resources of the Jogjakarta Iron Project is based on information compiled by Mr Philip Welten who is a member Australian Institute of Mining and Metallurgy Mr Welten is a consultant of Indo Mines Limited Mr Welten has by Mr Philip Welten, who is a member Australian Institute of Mining and Metallurgy. Mr Welten is a consultant of Indo Mines Limited. Mr Welten has sufficient experience, which is relevant to the style of iron ore mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Welten consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Capital Structure Market Capitalisation approx $36 million → Undervalued against peers • 163.2m shares on issue • 27.7m unlisted options • 55m performance shares (converting 1 for 1) • USD $4m convertible note from Anglo Pacific Group Plc • Major Shareholders Board and Management 37.1m 22.6% Anglo Pacific Group 20.1m 12.3% Iron Project Vendors 10.9m 6.7% 68.1m 41.6% Top 40 Holders 124.9m 76.7%
Current Projects Iron Project - Jogjakarta • 605 Million Tonnes of Iron Sands • Contract of Works to mine and C t t f W k t i d process ALL iron sands throughout Indonesia • Project NPV of US$808 million • Project NPV of US$808 million based on 1mt pa of pig iron M Mangkok Thermal Coal k k Th l C l South Kalimantan Coal - South Kalimantan • Production commenced INDONESIA INDONESIA Jakarta • High quality thermal coal, approx 6,000 to 7,000 kcal/kg Iron Sands
Board of Directors Martin Hacon (Managing Director/CEO) – former Vice President New • Zealand Steel, responsible for the iron sands business, by-product and steel manufacturing businesses manufacturing businesses. Chris Catlow (Non-Executive Chairman) – former Director - Business • Development, and founding CFO of Fortescue Metals Group (ASX:FMG). Derek Fisher (Non-Executive) – MD/CEO of Moly Mines (ASX:MOL) • Paul Kopejtka (Non-Executive) – Executive Chairman of Murchison Metals • (ASX: MMX) (ASX: MMX) Darryl Harris (Non-Executive) – MD of Beacon Minerals (ASX:BCN) and • Outotec Business Development Manager with significant knowledge of f ferrous technologies. t h l i Keith Brooks (Non-Executive) – extensive corporate finance experience and • contact base in Asia / Indonesia.
A New Generation Minerals Producer Targeting a Unique Market g g q Niche TO BE: • The Domestic Raw Material Supplier of Choice to the Growing Indonesian Steel and Metals Industry d M t l I d t • A Raw Material Supplier Of Choice to the Asian Metals I d Industry t
Indonesia Overview Gross Domestic Product US$ billion 600 • Democracy with population of 500 240 million+ • Reformed financial institutions R f d fi i l i tit ti 400 400 • The worlds 3rd fastest growing 300 economy in 2009 200 • Credit upgrade by Fitch, S&P and C dit d b Fit h S&P d 100 Moody in the last year 0 • Resource rich (iron, coal, oil…) 1980 1985 1990 1995 2000 2005 2010 % GDP Growth • One of the top performing O f th t f i 7.00% economies through the GFC 6.00% 5.00% • Close to the major markets and 4.00% growing economies of the world growing economies of the world 3.00% • Government to invest >US$200 2.00% billion in new infrastructure projects 1.00% 0 00% 0.00% 2007 2008 2009 2010
Indonesian Steel Industry: Overview • Currently the lowest consumption • Next major market for steel of steel per capita in the world products – China, India, Indonesia Indonesia….. • August 2010 POSCO announce Steel Consumption per Capita (kg) JV with Krakatau Steel to build a new 6mt steelworks • 2009 steel imports represented 5.6% of gross imports. (The #1 imported item by value) • The steel industry utilises 100% imported raw materials • Current capacity 5mt, forecast domestic demand 2013 of >10mt
Pig Iron Market and Opportunity Market Overview Indo Mines Opportunity • To be lowest cost pig iron producer in • Pig iron a direct substitute for th the world. ld scrap metal t l • Option to produce iron concentrate to • Blast furnace and electric arc provide early cash flows. furnace operations require scrap as feed as feed • Reduced availability of scrap, as developing countries still in construction phase p • Increasing correlation between pig iron price and iron ore price
Iron Sand: What is it? • Iron Sand is Titano-magnetite, an abundant ore produced by volcanic activity volcanic activity • It contains up to 60% Iron combined with up to 9% Titania (TiO 2 ) • High TiO 2 is undesirable in blast • High TiO is undesirable in blast furnace feed BUT • Ideal feed material for new Direct Reduced Iron (DRI) technologies • Vanadium content is a potentially valuable by-product • Mining is simple, low cost and environmentally friendly
Iron Sands Potential - Java Jakarta 100km Potential Yogyakarta JAVA Iron Sands 20km YOGYAKARTA Additional Resource Potential Iron Sand Mining Concession 22km ‐ 605Mt Additional Resource Potential
Infrastructure in Place J o g j a k a r t a 2km Mining Lease Boundary 273 0 – 6 0 6 14 2% 14.2% million metres Fe tonnes 929 holes, 14,000 samples. • 605 0 – 20 10.8% million No overburden or internal waste. • metres metres Fe Fe tonnes
JORC Resource • 605 million tonnes, grade 10.8% Fe • Includes 273 million tonnes near surface sand, grade 14.2% Fe Surface Sand Unit (above an average 6m depth) JORC Resource Tonnes Grade (at a cut off of 9% Fe) (at a cut off of 9% Fe) (Million) (Million) (% Fe) (% Fe) Measured 115.6 13.9% Indicated 134.9 14.5% Inferred 22.5 14.0% 273.0 14.2% • The balance of 332 million tonnes is magnetite bearing gravel grading 7.9% Fe. Initial testing indicates that a commercial grade concentrate can be produced
Project Update • Simple dry mining, gravity and magnetic separation to produce up to 2 million tonnes of concentrate • The deposit is similar to the New Zealand iron sand deposits processed into steel products for over 30 years • Final products tailored to meet customer requirements • Iron concentrate converted to pig iron using DRI technology plus smelting • URS contracted to complete the Environmental and Social impact studies • Project owned through a Joint Venture company (PMA), Indo Mines 70%, local partner 30%
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