Indophil Resources NL : Quarterly Report - June 2014

acn 076 318 173

For the three months ending 30]une 2014

• With the successful completion of the Annual Generai

• And the imminent sale by Glencore of its interest in the Las Bambas Copper Project which is expected to release Glencore from Chinese Government conditions that may have required divestment of its stake in the Tampakan Copper-Gold Project ...

• lndophil and Glencore share a strategie interest in the Tampakan Project, and with some recent encouraging progress in taking the Tampakan Project closer towards development approvals, we look forward to realising this

The Annual Generai Meeting of lndophil

Resources took piace in Melbourne on

22 May 2014, with ali three resolutions put to shareholders securing a greater than 98% approvai.

At that meeting, lndophil's Chairman, Brian Phillips, focused on the future of the Company's key asset outside cash, the Tampakan Copper Gold Project in

the southern Philippines. An extract of his address to shareholders is reprinted on page two of this report.

At the essence of these messages is the recent positive news from Glencore that ali conditions to completion of the Las Bambas transaction have been satisfied, and the

lndophil Resources NL Level 3, 411 Collins Street Melbourne VIC 3000

Australia

Tel+613 8620 5800

Fax +613 8620 5888

Las Bambas sale process is now due to be completed in early August this year. This removes the Tampakan Project from the potential scenarios agreed to under the Glencore-Chinese Government conditions.

On the ground in the Philippines, considerable progress has been made during the quarter by Sagittarius Mines lnc., the Tampakan Project operating arm, in respect of national and local government understandings and approvals.

Richard Laufmann

CEO&MD

30 July 2014

lndophil Services lnternational Pty Ltd

Level 3, 107 Aguirre Street

Legaspr Vtllage, Makatr Crty 1229

The Philipprnes

Tel+632 752 1440

Fax +632 752 11 46

www.indophil.com

ANNUAL GENERAL MEETING

The Annual General Meeting of Indophil Resources'
shareholders took place in Melbourne on 22 May 2014.
All three resolutions put to shareholders received a greater than 98% approval.

AGM - EXTRACT FROM CHAIRMAN'S ADDRESS

" . . . When we held our AGM one year ago, the merger of Glencore plc and Xstrata plc, the latter being our Philippine-based Tampakan Copper-Gold Project partner, had been announced. Since that time, Indophil has had considerable and at times colourful interaction with the merged entity, Glencore Xstrata, now renamed Glencore.

"Our discussions have focused on the creation and implementation of a revised work plan for the Tampakan Project and on clarification of Glencore's ultimate intent in respect of its ongoing involvement in the project's development.

"The purpose of implementing the revised work plan, announced in August last year, was to rein in activity and expenditure while the Joint Venture partners (or contractors, as we are) seek to secure crucial support for the way forward from our other partner in project development, the Philippine Government, which is

guardian to the Tampakan asset on behalf of the people of the Philippines.

"Glencore is well-documented as being wary of 'greenfield' projects, and Tampakan is a big 'greenfield' project. Strategically, Indophil holds a pre-emptive right over Glencore's 62.5% share of Sagittarius Mines Inc. (SMI: the in-country operating arm for Tampakan). This is a valuable advantage should Glencore wish to exit or sell down its equity in SMI.

" . . . progress in project development, has been overshadowed by conditions included in Glencore's April 2013 agreement with the Chinese Government's

Ministry of Commerce (MOFCOM), put in place to allow the Glencore and Xstrata merger to proceed.

"In essence, Glencore's ownership in SMI and hence in the Tampakan Project was subjected to a requirement which, as a first preference, centred on the divestment of Glencore's interest in the 'greenfield' Las Bambas Copper Project in Peru. If the Las Bambas sale process failed to eventuate in a timely manner, a second line of

mandated divestment included Glencore's interest in the

Tampakan Project.

"Recently (13 April 2014), Glencore announced the divestment of its interest in Las Bambas to a consortium led by the Chinese-controlled and Australian-based MMG Limited. In principle, we understand that on closure, this divestment frees Glencore and therefore

its interest in Tampakan from the MOFCOM conditions. The Las Bambas sale is expected to be completed

prior to the end of Q3 this year. Late last year, Glencore Xstrata announced the sale, subject to the MOFCOM- Glencore agreement being satisfied, of its interest in the

'greenfield' Frieda River Copper-Gold Project in PNG to

Australian-based PanAust Limited.

"The past 12 months have been challenging for all small- to mid-cap resources companies, including Indophil,

and while there is no magical or immediately clear way ahead, the prospects for Indophil shareholders and the Tampakan Copper-Gold Project remain positive. We realise that Indophil must look to, and if necessary engineer, solutions and outcomes that will crystallise the value of our Tampakan equity and utilise our considerable cash position to deliver improved value for shareholders . . ."

FINANCIAL REPORTING AND CASH BALANCE

Indophil's cash balance at the end of the June 2014 quarter was $208.7 million (previously $211.7 million). Interest earned from cash-at-hand during the quarter was
$1.78 million.
During the quarter, a total of 30,750 options lapsed following the resignation of an employee.

CEO CONTRACT

The employment contract of Richard Laufmann as CEO
has been extended for a further term of 12 months, from 1 June 2014 until 31 May 2015, on substantially
the same terms as his previous arrangements, including remuneration and incentive terms.

SMI - TAMPAKAN PROJECT UPDATE

In late May, an attack on one of the SMI camp facilities by members of the New People's Army, the armed wing of
the Communist Party of the Philippines, partially destroyed the facility. There were no casualties. The local community and SMI are disappointed at this attack, particularly
given the clear and sustainable benefits already flowing to host communities within the village, municipal and provincial governments. As a contractor to the Philippine Government, SMI aims to deliver on its obligations on behalf of the project's shareholders for the benefit of investors and the Filipino people.
Positive progress has occurred since Indophil's last quarterly report, with indications of support from the national and local governments, providing encouragement for the ongoing approvals process. SMI has resubmitted project feasibility documents and other requirements to
the government's Mines & Geosciences Bureau for detailed review and reconsideration.
The Mining Industry Coordinating Council (MICC), established by the Philippine Government, has directed SMI to commence the Local Government Endorsement process which has started positively and will continue over the coming months. The MICC also requested its associated government body, the National Commission on Indigenous Peoples, to commence planning with
SMI for the local indigenous peoples' Free Prior Informed Consent (FPIC) process. Initial indications are that this FPIC process can commence later this year, and that
the locally-affected indigenous people communities are commencing preparations for this crucial and important consent consideration process along with the accompanying agreements which would deliver sustainable benefits to these host communities.

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TAMPAKAN AT A GLANCE

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 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 Glencore holds the balance. In turn, as the holder of the Tampakan Project Financial and Technical Assistance Agreement (the Columbio FTAA - No. 02-95-XI, granted on 22 March 1995), SMI acts as a contractor to the Philippine Government on behalf of the people of the Philippines.

EXPLORATION PROGRAM - THE PHILIPPINES

NORTHERN LUZON

The Balatoc Copper-Gold Project: Indophil is working with the Balatoc indigenous people to gain title and access to the property. Progress continues to be made in the Company's favour to resolve the competing claims covering the exploration permit applications.

EASTERN MINDANAO

The Manat Gold Project: Indophil and the Philippine-based
Alsons Group continue to manage the project which is preparing additional information that is required by government to complete the Declaration of Mining Feasibility. Indophil continues to seek an exit from this project.
Elsewhere, several properties were reviewed during the quarter, but none met the Company's investment criteria.

SCHEDULE OF INTERESTS IN APPROVED MINING TENEMENTS *

Tenement

FTAA

Approval

Date

23/03/1995

Current

Ownership Project

Sagittarius

Area

(Km2)

Agreement

Type

Operating

Equity

(%)

02-95-X1 (Columbio)
(R)11/12/02
Mines, Inc. Tampakan 304.9
Royalty 37.5
MPSA

094-97-XI
20/11/1997 (R)12/04/2002
Alsons Development
Corporation Manat 15.47 Farm-in & JV 25
* No mining or exploration tenements were acquired or disposed of during the quarter.

CORPORATE INFORMATION

ASX listed code IRN
Total listed shares 1,203,146,194
Unlisted options 2,730,000
Share price trading range for the June 2014 quarter:
High 18c Low 13c Current 21.5c

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 30 June 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.

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

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

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

$5,272,167 has been recorded as interest income on advances to associate entities for the period 1 January 2014 to 30 June 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.

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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.

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

+ See chapter 19 for defined terms.

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Issued and quoted securities at end of current quarter

7.12 Unsecured notes

+ See chapter 19 for defined terms.

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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: 30 July 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.

+ See chapter 19 for defined terms.

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