Investor Presentation Jogjakarta Iron Sands Project
Overview of Iron Sands Project Large & well tested (to JORC Standard) Iron Sands Mineral Resource in Java, Indonesia, equivalent 65 Mt of Iron Project NPV of $505M with projected net cash flows of $185M per annum and operating cost of $190 per tonne Targeting sales of concentrate commencing in mid 2008, generating $30M net cash flows Further substantial upside in project life, scale and operating costs Bankable Feasibility Study for Project due for completion in mid 2008 Significant Indonesian demand for end product (currently 100% imported) hence strong Government and Industry support for the project to proceed Excellent Local Infrastructure – power, water, rail, port Proven Technology being applied (used by Bluescope in NZ since ‘86) Regional Licence approved, Contract of Works in progress In partnership (70/30) with strong and well connected local Indonesian Group Experienced Board and Management with proven project development skills in the iron ore sector 2 ... An exciting opportunity for growth
Location Plan
Site Plan RAILWAY PROGO RIVER
Resource Drilling 5
Global JORC Resource Land Ocean • 605 million tonnes of magnetite bearing sediment grading 10.8% Fe, which equates to an equivalent contained iron of 65 million tonnes • Of the global resource, there is 273 million tonnes of magnetite rich surface sand down to 7 metres grading 14.2% Fe, sufficient for over 30 years of mining • Global resource based on 929 holes for a total of 14,468 metres of air core drilling 6
Project Summary Location Mineralisation occurs on the surface, allowing for low cost resource estimation and mining. The deposits are located close to key infrastructure: • Railways • Gas reserves • 500,000 kva power line • Transport infrastructure These factors should see a reduction in the capital costs of a potential development and shorten overall construction time Technology The deposit is similar to the iron sand deposits that have been mined and processed by Bluescope Steel in New Zealand over the last 30 years - it is anticipated that mining and down stream processing at Jogjakarta will be based on this same simple and proven technology Ownership Indo Mines earning 70% of Project, currently owns 30% On completion of the BFS Indo Mines interest will increase to 70% 7
Anticipated Process Flow Chart 10 Mtpa Iron Sand 1.2 Mtpa of Coal 14% Fe Pre-Conc. Conc. MHF / SLRN DRI Mining Beneficiation Ironmaking Reduction 3.6 Mtpa 1.8Mtpa 1.4 Mtpa 30% Fe 60% Fe 1.0 Mtpa Hot Gases The simple and proven technology proposed is similar 262 GwH to that successfully employed at Power Bluescope Steel’s Iron Sands to Generated Steel operation in New Zealand 8
Scoping Study Results Scoping Study completed in April by ProMet Engineers 1 Million tonne per annum of pig iron production NPV of $505M @ $362/tonne ($795M @$435/tonne) Projected annual cash flow of $185M with operating costs of $190/tonne $30M per year cash flow from early sales of concentrate, mid 2008 start up Capital cost of $700M URS reports no high risk Social or Environmental Issues Pig Iron production within 3 years Upsides being considered Alternative Hot Metal processing could see costs reduced by $30 per tonne Increase Concentrator Size to produce sufficient product for both pig iron and concentrate sale Downstream expansion to Specialty Steels from liquid pig iron 9
Indonesian Development Contract of Works (CoW) application now in progress Performance Bond paid Principle Regional Licence granted Letter of support obtained from local regions No determined forestry issues Negotiations are under way Heads of Agreement with Krakatau Steel has been signed 100,000 tpa of pig iron product for 15 years Indonesia’s largest steel producer( >2 mtpa) Delivery to commence in 2010 There is strong interest for ferrous product from Indonesia as they currently import 100%, also interest from other regional steel producers Indo Mines / Jogja Magasa Mining Offices have been established in Jakarta and Jogjakarta 10
Indonesian Mining Industry Mining and Metals expertise with low production cost base World ranked mineral endowment (Coal, Au, Cu, Ni) Supportive government with a strong desire for external capital investment Jogjakarta Regency have been involved in the project since 1972, they are actively involved as our partner in developing this and other projects in the region Strong relationships between Central Government and Regency of Jogjakarta English speaking Significant Asian Mining Nation 11
12 Capital Structure
Experienced Board & Management Technical Phil Welten - Managing Director ex Robe River Iron with significant operational, project development and feasibility study experience Darryl Harris – a metallurgist with strong project development experience and significant knowledge of ferrous technologies Matthew Rimes – a mining executive ex Robe River Iron with strong ferrous experience Corporate Ian Middlemas – a Chartered Accountant with extensive corporate/project finance background Keith Brooks – has extensive corporate finance experience and contact base in Asia / Indonesia 13
Major Milestones Snowden Report on Resource Grade Variability URS Initial Environmental Study ProMet Engineers Scoping Study Contract of Works negotiations in progress with approvals expected prior to the completion of the BFS BFS for Concentrates by Sept 07, design & construction commencing in Oct 07 for commissioning Mid 08 Pre-Feasibility Study for Hot Metal by Nov 07 Bankable Feasibility Study to be completed mid 2008 Strong focus and emphasis on accelerating project development and early cash flow 14
Important Information 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. The information in this report that relates to Exploration Results and Mineral Resources of the Jogjakarta Ironsands Project is based on information compiled by Mr Philip Welten, who is a member Australian Institute of Mining and Metallurgy. Mr Welten is a full-time employee 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 . 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. 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. 15
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