INDOPHIL RESOURCES NL 
By indophil resources nl
acn 076 318 173
Quarterly Report
For the three months ending 31 March 2014
Fax: +613 8620 5888
Indophil Services International Pty LtdLevel 3, 107 Aguirre Street
Legaspi Village
Makati City 1229
The Philippines
Tel: +632 752 1440
Fax: +632 752 1146
• As Indophil prepares for its Annual General Meeting of Shareholders, set for Thursday 22 May 2014 in Melbourne . . . • Indophil secures a capital gains exemption from the Philippine Government's Bureau of Internal Revenue . . . • And this allows for finalisation of transfer of the Sagittarius Mines Inc (SMI) share certificate to our Tampakan Copper-Gold Project partner Glencore Xstrata.www.indophil.com
The Annual General Meeting of Indophil Resources will take place in Melbourne on Thursday 22 May 2014 at 11.00am. Venue and voting details are provided on page
two of this quarterly report. I look forward to seeing as many shareholders as possible at the meeting.
In a timely lead-up to the AGM, the Philippine Government has granted a capital gains tax exemption on the transfer of shares in SMI. This has resulted in the Supreme Court of Queensland hearing in respect of Glencore Xstrata's registration as the legal owner of a
62.5% interest in SMI being discontinued.
Equally important, on 13 April Glencore Xstrata (GX) announced that it had signed an agreement for the sale of its interest in the Las Bambas copper project in Peru with a consortium led by Chinese-controlled and Australian-based MMG Limited.
As shareholders would be aware, the uncertainty created by Chinese Government conditions which have been in place since it approved the Glencore merger with Xstrata in May 2013 has affected the future of the Tampakan Project. We will await clarification
that the conditions are indeed removed once the sale of Las Bambas is finalised.
This new development comes at a time when Indophil's share price, reflective of ongoing global uncertainty impacting small- and
mid-cap miners coupled with a frustration on progress at Tampakan itself, sits at
14 cents. This is less than current cash backing per share of 17.6 cents. Indophil remains focused on maintaining and progressing the Tampakan development plan. Indophil is committed to working with project partners GX and the Philippine Government
to secure an appropriate outcome and way forward for this world-class project and for our investment in it.
Finally, Indophil's Annual Report to Shareholders was lodged with the Australian Securities Exchange on 27 March 2014. While it contains a considerable amount of detailed statutory and financial information,
I urge shareholders to read the Chairman's and Chief Executive Officer's Review, as
it provides more detail on the period just completed and our view as to 'next steps.'
Richard Laufmann
CEO & MD
29 April 2014
The Annual General Meeting (AGM) of Indophil Resources' shareholders will take place at 11.00am on Thursday 22 May 2014. The venue will be the offices of law firm Baker & McKenzie, level 19, 181 William Street, Melbourne.
In respect of voting on the three resolutions before the AGM, documents may be lodged in person, by mail, courier, facsimile or online as follows:
In person or courier: Computershare Investor Services
Pty Limited, Yarra Falls, 452 Johnston Street, Abbotsford, Victoria, 3067.
By mail: Computershare Investor Services Pty Limited, GPO Box 242, Melbourne, Victoria, 3001.
By facsimile: 1800 783 447 (within Australia) or
+61 3 9473 2555 (outside Australia).
Online: 'www.investorvote.com.au' - for this option, shareholders will require their secure access information as detailed on their personalised Proxy Form.
Custodian Voting: For Intermediary Online subscribers only (custodians), please visit www.intermediaryonline. com to submit your voting intentions.
SMI WORK PLAN - UPDATE
During the quarter, discussions took place between Indophil and Glencore Xstrata with regard to the Tampakan Project's 2014 work plan and budget. The plan, approved by the majority of the SMI Board, is for a program of expenditure of less than US$9 million for the year, focusing on the Philippine Government's approval process along with the Indophil-funded Off-Lease Infrastructure - Environmental Impact Assessment (OLI- EIA).
The work plan continued to reduce expenditure, initiated last August, from a planned US$54 million 2013 budget down to an actual 2013 spend of US$33 million.
The OLI-EIA is now in its final draft, pending completion of some regulatory requirements and a decision by SMI and the JV partners to lodge the application for the OLI's Environmental Compliance Certificate along with a similar power station approval process.
SMI continues to engage with the government's Mining Industry Co-ordinating Council on issues surrounding the approvals process.
Previously, we reported that Xstrata Queensland Ltd (now Glencore Queensland Ltd or GX) had issued proceedings to become registered as the legal owner of a 62.5% share in SMI that it acquired from the Company in 2007.
Following that 2007 event, the Company applied for a capital gains tax exemption on the transfer of shares
under the terms of a tax treaty between the Republic of the Philippines and Australia. The Company applied for the tax ruling to facilitate the registration of Xstrata Queensland
as the legal owner of those shares in the share register of
SMI.
On 19 March 2014, the Company received notification from the Philippine Government's Bureau of Internal Revenue that it had granted the exemption application in favour of the Company. This allowed for the transfer of shares and perfecting the legal ownership interest of
GX in SMI. As a result, the scheduled Supreme Court of
Queensland hearing of 14 April was discontinued.
The Tampakan copper and gold deposit, discovered in
1992, is one of the largest-known undeveloped copper- gold deposits in the world. Tampakan is a 2.94 billion tonne mineral resource at 0.51% copper when measured at a 0.2% copper cut-off grade. It is estimated to contain
15 million tonnes of copper and almost 18 million ounces of gold, with potential for growth.
The Tampakan Mine Project Feasibility Study, completed in April 2010, outlines a proposed mining operation that involves:
• An initial 17 year life-of-mine, with potential for extension;
• A start-up mining and milling capacity of 66 million tonnes per annum;
• Annual production of 450,000 tonnes copper and of
435,000 ounces gold over the first five years of operation;
• An average life-of-mine copper production rate of 375,000 tonnes per year;
• An average life-of-mine gold production rate of 360,000 ounces per year; and
• A development cost of US$5.9 billion, including the provision of US$900 million for a power station.
Indophil, through its shareholding in SMI, holds a strategic
37.5% stake in the Tampakan Project while GX holds the balance. In turn, as the holder of the Tampakan Project Financial and Technical Assistance Agreement (the Columbio FTAA), SMI acts as a contractor to the Philippine Government on behalf of the people of the Philippines.
Indophil's cash balance at the end of the March 2014 quarter was $211.7 million (previously $215.1 million). Interest earned from cash-at-hand during the quarter was
$1.76 million.
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NORTHERN LUZON
Balatoc Copper-Gold Project: Indophil is working with the Balatoc indigenous people to gain title and access to the property. Progress is being made in the Company's favour to resolve the competing claims covering the exploration permit applications.
EASTERN MINDANAO
Manat Gold Project: Indophil and the Philippine-based Alsons Group continue to manage the project which is still awaiting formal comment and approval of its Declaration
of Mining Project Feasibility from the central office of the government's Mines and Geosciences Bureau. Indophil is seeking to exit this project.
Area Tenement Approval Date Current Ownership Project (Km2) Agreement Type Equity | ||||||
FTAA 02-95-X1 (Columbio) | 23/03/1995 (R)11/12/02 | Sagittarius Mines, Inc. | Tampakan | 304.9 | Operating Royalty | 37.50% |
MPSA 094-97-XI | 20/11/1997 (R)12/04/2002 | Alsons Development Corporation | Manat | 15.47 | Farm-in & JV | 25% |
ASX listed code IRN
Total listed shares 1,203,146,194
Unlisted options 2,760,750
Share price trading range for the March 2014 quarter: High 23.5c
Low 14c
Current 14c
All currencies in Australian dollars unless stated otherwise.
Directors
Non-Executive Chairman Brian Phillips
CEO and Managing Director Richard Laufmann
Executive Director Tony Robbins Non-Executive Director Kyle Wightman Non-Executive Director David Carland Non-Executive Director Nicasio Alcantara
Non-Executive Director Frederic DyBuncio
Company Secretary Kay Donehue
Chief Financial Officer Anita Addorisio
FOR FURTHER INFORMATION, PLEASE CONTACT:Gavan Collery
Manager Corporate Affairs
Indophil Resources NL
Email: gavan.collery@indophil.com
Office: +61 (03) 8620 5800
Mobile: +61 (0) 419 372 210
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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report
Appendix 5B
Mining exploration entity and oil and gas exploration entity quarterly report
Indophil Resources NL
ABN Quarter ended ("current quarter")
45 076 318 173 31 March 2014
Consolidated statement of cash flows
Cash flows related to operating activities
1.1 Receipts from product sales and related debtors
1.2 Payments for (a) exploration & evaluation
(b) development
(c) production
(d) administration
1.3 Dividends received
1.4 Interest and other items of a similar nature received
1.5 Interest and other costs of finance paid
1.6 Income taxes paid
1.7 Other (provide details if material)
Net Operating Cash Flows
+ See chapter 19 for defined terms.
01/05/2010 Appendix 5B Page 1
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Appendix 5B
Mining exploration entity and oil and gas exploration entity quarterly report
1.13 Total operating and investing cash flows (brought forward) | (3,385) | (3,387) |
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other Net financing cash flows | - - - - - - | - - - - - - |
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other Net financing cash flows | - | - |
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter | (3,385) 215,093 (5) | (3,387) 215,093 (3) |
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter | 211,703 | 211,703 |
Payments to directors of the entity, associates of the directors, related entities of the entity and associates of the related entities
Current quarter | ||
$A'000 | ||
1.23 | Aggregate amount of payments to the parties included in item 1.2 | 218 |
1.24 | Aggregate amount of loans to the parties included in item 1.10 | 794 |
1.25 | Explanation necessary for an understanding of the transactions |
Non-cash financing and investing activities
2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows
Interest Income
$2,604,766 has been recorded as interest income on advances to associate entities for the period 1 January 2014 to 31 March 2014. The interest income is recorded as additional advances in the accounts and therefore is a non-cash settlement.
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
+ See chapter 19 for defined terms.
Appendix 5B Page 2 01/05/2013
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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report
Financing facilities available
3.1 Loan facilities
3.2 Credit standby arrangements
Estimated cash outflows for next quarter
4.1 Exploration and evaluation
4.2 Development
4.3 Production
4.4 Administration
Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.
+ See chapter 19 for defined terms.
01/05/2010 Appendix 5B Page 3
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Appendix 5B
Mining exploration entity and oil and gas exploration entity quarterly report
Changes in interests in mining tenements and petroleum tenements
6.1 Interests in mining tenements and petroleum tenements relinquished, reduced or lapsed
6.2 Interests in mining tenements and petroleum tenements acquired or increased
Issued and quoted securities at end of current quarter
7.5 +Convertible debt securities
+ See chapter 19 for defined terms.
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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report
7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted
7.12 Unsecured notes
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Appendix 5B
Mining exploration entity and oil and gas exploration entity quarterly report
Compliance statement
1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5).
2 This statement gives a true and fair view of the matters disclosed.
Signed:
Kay Donehue, Company Secretary
Date: 29 April 2014
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.
2 The "nature of interest" (items 6.1 and 6.2) includes options in respect of interests in mining tenements and petroleum tenements acquired, exercised
or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement or petroleum tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.
3 Issued and quoted securities. The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities.
4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report.
5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting 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.
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