An underwritten offer of 20 million Shares at an

Offer Price of 25 cents per Share, payable in full

on application, to raise a total of $5 million,
together with a non-underwritten offer of one
Option for every Share issued.

INDOPHIL
R E S O U R C E S N L
ABN 45 076 318 173
Important Information
This is an important document that should be
read in its entirety. If you do not understand it,
you should consult your professional advisers.
The Shares and Options offered by this
Prospectus are of a speculative nature.

Underwriter to the Offer

ABN AMRO Morgans Corporate Limited
ABN 32 010 539 607
CORPORATE DIRECTORY
DIRECTORS INVESTIGATING ACCOUNTANT AND
Bryan Davis AUDITORS
Non Executive Chairman Arthur Andersen
Tony Robbins Level 17, 360 Elizabeth Street
Managing Director
Melbourne Victoria 3000
Chris Middleton
Director of Exploration SOLICITORS
Kevin Robinson Australia
Non Executive Director Freehills
COMPANY SECRETARY Level 43, 101 Collins Street
Hayden Barry Melbourne Victoria 3000

PRINCIPAL AND REGISTERED OFFICE Philippines

Suite 3, Technology Enterprise Centre Carag, Caballes, Jamora & Somera Law Offices
2 Park Drive 2nd Floor The Plaza Royale
Bundoora Victoria 3083 120 L. P. Leviste Street
Telephone: (03) 9479 5060 Facsimile (03) 9479 5063 Salcedo Village Makati City Metro Manila
Email: melhill@indophil.com Philippines
Website: www.indophil.com SHARE REGISTRY
REGIONAL OFFICE Computershare Investor Services Pty Limited
Level 3, L & F Building Level 12, 565 Bourke Street
107 Aguirre Street Melbourne Victoria 3000
Legaspi Village BANKERS
Makati City 1299 Philippines Australia and New Zealand Banking Group Limited
Telephone: (632) 752 1440 Facsimile (632) 752 1446 388 Collins Street
Email: melhill@indophil.com Melbourne Victoria 3000
UNDERWRITER TO THE ISSUE INDEPENDENT GEOLOGIST
ABN AMRO Morgans Corporate Limited Exploration Services International
Level 29, Riverside Centre 3364 South Tulare Court
123 Eagle Street Denver Colorado 80231 USA
Brisbane Qld 4000
BROKER TO THE ISSUE
ABN AMRO Morgans Limited
Level 29, Riverside Centre
123 Eagle Street
Brisbane Qld 4000

KEY DATES* OFFER STATISTICS

Offer opens: 22 March 2002 Number of Shares to be issued: 20,000,000
Offer closes: 17 April 2002 Offer Price: $0.25
Expected despatch of Share and Option holding statements: 26 April 2002 Shares on issue after listing: 100,044,505
Expected quotation of Shares and Options Market capitalisation at Offer Price: $25,011,126
on the ASX: 30 April 2002 Options to be listed: 20,000,000

* This timetable is indicative only and Applicants are encouraged to submit their applications as early as possible. Indophil, in consultation with the
Underwriter, has the right to close the Offer early or vary any other date and time without prior notice.

IMPORTANT NOTICE
This Prospectus is dated 14 March 2002 and was lodged with the ASIC on that date. Neither the ASIC nor the ASX take any responsibility for the contents of
this Prospectus or the merits of the investment to which this Prospectus relates.The Company will apply to the ASX for listing and quotation of the Shares
and the Options on the ASX within 7 days after the date of this Prospectus. No securities will be issued on the basis of this Prospectus later than 13 months
after the date of this Prospectus.
It is important that you read this Prospectus carefully and in full before deciding to invest in the Company. In particular, in considering the prospects of the
Company, you should consider the risk factors that could affect the financial performance of the Company in light of your personal circumstances (including
financial and taxation issues) and seek professional advice from your accountant, stockbroker, lawyer or other professional adviser before deciding to invest.
The Proposed Tampakan Acquisition referred to in this Prospectus may not proceed.The background and risks associated with the Proposed Tampakan
Acquisition are described in detail in Section 9.
The tenements detailed in this Prospectus are at exploration stage only and accordingly, investment in the Shares and Options offered by this Prospectus
should be regarded as speculative.
The Prospectus does not constitute an offer or invitation in any place in which, or to any person to whom, it would not be lawful to make such an offer or
invitation. No action has been taken to register or qualify the Shares, the Options or the Offer, or to otherwise permit a public offering of Shares or Options,
in any jurisdiction outside Australia.The distribution of this Prospectus outside Australia may be restricted by law and persons who come into possession of this
Prospectus outside Australia should seek advice and observe any such restrictions.Any failure to comply with such restrictions may constitute a violation of
applicable securities law.The offer constituted by this Prospectus in electronic form is available only to persons receiving this Prospectus in electronic form within Australia.
Photographs used in this Prospectus which do not have descriptions are for illustration only and should not be interpreted to mean that any person shown
endorses the Prospectus or its contents or that the assets shown in them are owned by the Company. No person named in this Prospectus, nor any other
person, guarantees the performance of the Company, the repayment of capital or the payment of a return on the Shares and Options.
Money as expressed in this Prospectus is in Australian dollars unless otherwise indicated. Where Philippine Pesos are referred to in this Prospectus, an
average exchange rate of A$1 = P25 is assumed unless otherwise indicated .
Indophil Section 01-03 14/3/02 5:49 PM Page 1

Investment Highlights
Indophil Resources - A dynamic Australian resources company operating in the Philippines
Exploration in highly prospective areas of known mineralisation.
Strong technical and management team with proven track record in discovery.
Respected relationships with local communities, claim owners, companies and Government Departments.
Exploration portfolio for copper-gold comprises seven projects (1403 sq km).
Approximately $9 million spent to date by Indophil on exploration and evaluation of properties.

Manat Project (earning to 50%)

Recent gold discovery at the Magas prospect includes drill intercepts of 24m at 4.53g/t, 51m at 2.93g/t,
9.9m at 7.16g/t, 6.20m at 10.86g/t, 15.7m at 5.26g/t and 30.1m at 2.62g/t gold.
Limited drilling of the Magas vein zone over 1km of strike produces a conservative mineral resource estimate
of 272,000 ounces gold and 1.75 million ounces silver.
The Magas vein zone is open along strike and at depth indicating considerable upside potential for increasing
resources within this zone. Exploration has shown the structure hosting the zone can be traced discontinuously
for 3.4km.
Early delineation and resource definition drilling is planned leading to mine scoping studies.
Magas is one of three mineralised structures within the project area.
Porphyry copper-gold mineralisation intersected by drilling including 227m at 0.19% copper and 0.30g/t gold.

Labo Project (100%)

Major tenement position in the Paracale gold district (5 million ounces of historical gold production).
Regional work has defined at least 8 mineralised prospect areas. Grid-based exploration on four of these has
produced positive results.
Trench results at Pael and Gaerlan prospects include 8m at 8.03g/t, 7m at 7.34g/t, 13m at 4.97g/t and
20m at 1.58g/t gold.
10 of 11 drillholes completed at Pael and Gaerlan intersected significant mineralisation including 5.90m at
3.16g/t, 5.99m at 4.87g/t and 8.24m at 2.61g/t gold.

Bunawan Project (option to earn 100%)

Project area has a history of small-scale mining activity on high-grade gold veins.
Exploration has resulted in strong stream sediment gold anomalies associated with extensive areas of
hydrothermal alteration and associated veining.
Prospective for large, low-grade bulk disseminated gold deposits.

Hinotongan Project (earning to 65%)

Option for a joint venture arrangement with the Philippine National Oil Company.
Geology and geochemistry have outlined a large Tampakan-style copper-gold target. Early exploration drilling
is planned.

Tampakan Project (proposed acquisition of a 100% Operating Interest)

The Tampakan Project includes a major copper-gold deposit with a published geological resource estimate
(non JORC) of 900 million tonnes at 0.75% copper and 0.30g/t gold at a 0.5% copper cut-off grade.
The Tampakan Group of Companies (TGC) has entered into a Deed of Absolute Sale with the project’s owner
WMC Resources International Pty Ltd.The Secretary of the DENR has granted conditional approval for the sale.
However, a third party has brought legal proceedings challenging the approval of the sale.
Indophil has entered into agreement with the TGC to obtain a 100% Operating Interest in the Tampakan Project.
The Company has also entered into agreements with MIM Holdings Limited (MIM) and Alsons Corporation
(Alsons), that allows them to purchase part of the Company’s interest in the Tampakan Project. If both parties
fully exercise their rights, the final Operating Interest will be held: MIM 60%, Indophil 30% and Alsons 10%.
Indophil Section 01-03 14/3/02 5:49 PM Page 2

Contents
1 Chairman’s Letter . . . . . . . . . . . . . . . . . . . . . 3 6.11 Regulatory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.12 Dependence on Key Personnel. . . . . . . . . . . . . . . 45
2 Investment Overview 6.13 Proposed Tampakan Acquisition . . . . . . . . . . . . . . 45
2.1 Business Overview . . . . . . . . . . . . . . . . . . . . . . . ..4
2.2 Description of Offer. . . . . . . . . . . . . . . . . . . . . . ..6 7 Independent Geologist’s Report
2.3 Key Offer Statistics. . . . . . . . . . . . . . . . . . . . . . . ..7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
2.4 Purpose of the Offer and Application of Funds. . ..7
2.5 Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . ..7 8 Solicitors’ Report – Philippine Tenements
2.6 Restricted Securities. . . . . . . . . . . . . . . . . . . . . . ..8 8.1 Mineral and Associated Legislation . . . . . . . . . . . . 84
2.7 Dividend Policy . . . . . . . . . . . . . . . . . . . . . . . . . ..8 8.2 Company Interests (Structure/Subsidiaries) . . . . . 91
2.8 Employee Share and Option Plan . . . . . . . . . . . . ..8 8.3 Company Projects and Associated Tenements. . . . 92
2.9 Taxation Considerations. . . . . . . . . . . . . . . . . . . ..8
2.10 Investment Risks. . . . . . . . . . . . . . . . . . . . . . . . . ..8
9 Tampakan Project . . . . . . . . . . . . . . . . . .
2.11 Company Prospects . . . . . . . . . . . . . . . . . . . . . . ..8
9.1 Tampakan Project Summary . . . . . . . . . . . . . . . . 104
2.12 No Valuation. . . . . . . . . . . . . . . . . . . . . . . . . . . . ..8
9.2 Details of the Proposed Tampakan Acquisition . . 108
9.3 Tampakan Legal Proceedings. . . . . . . . . . . . . . . . 108
3 Details of the Offer 9.4 FTAA Legal Proceedings . . . . . . . . . . . . . . . . . . . 109
3.1 The Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 9.5 Summary of Material Contracts relating to
3.2 Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 the Proposed Tampakan Acquisition . . . . . . . . . 109
3.3 How to apply for Shares. . . . . . . . . . . . . . . . . . . . . 9 9.6 Specific Risks Associated with the Proposed
3.4 Allotment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Tampakan Acquisition . . . . . . . . . . . . . . . . . . . . . 114
3.5 Underwriting and Handling Fees. . . . . . . . . . . . . . 10
3.6 ASX Listing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
10 Financial Information
3.7 CHESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
3.8 Overseas Applicants . . . . . . . . . . . . . . . . . . . . . . . 11
3.9 Withdrawal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 11 Investigating Accountants’ Report
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132

4 Exploration Overview
4.1 Regional Endowment for Copper and Gold . . . . . 12 12 Additional Information
4.2 Indophil’s Exploration Strategy . . . . . . . . . . . . . . . 12 12.1 Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
4.3 Exploration Project Summary . . . . . . . . . . . . . . . 14 12.2 Company Tax Status . . . . . . . . . . . . . . . . . . . . . . 136
4.4 Proposed Work Program and Budget . . . . . . . . . . 14 12.3 Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
4.5 Exploration Project Review . . . . . . . . . . . . . . . . . 16 12.4 Rights Attaching to Shares . . . . . . . . . . . . . . . . . 137
4.5.1 Manat Project . . . . . . . . . . . . . . . . . . . . . . 16 12.5 Taxation Implications for Applicants . . . . . . . . . . 138
4.5.2 Labo Project . . . . . . . . . . . . . . . . . . . . . . . 24 12.6 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . 139
4.5.3 Bunawan Project. . . . . . . . . . . . . . . . . . . . 30 12.7 Interests of Directors,Advisers and Promoters. . . 141
4.5.4 Hinotongan Project . . . . . . . . . . . . . . . . . 32 12.8 Advisers’ Consents and Disclaimers of
4.5.5 Leyte Project . . . . . . . . . . . . . . . . . . . . . . 34 Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
4.5.6 Northern Sierra Madre Project . . . . . . . . 36 12.9 Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
4.5.7 Buda Project. . . . . . . . . . . . . . . . . . . . . . . 38 12.10 Costs of the Offer . . . . . . . . . . . . . . . . . . . . . . . 145
12.11 Litigation and Claims . . . . . . . . . . . . . . . . . . . . . 145
12.12 ASIC and ASX relief . . . . . . . . . . . . . . . . . . . . . . 146
5 Directors, Management and Corporate 12.13 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
Governance
5.1 Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . 40
5.2 MIM Holdings Limited . . . . . . . . . . . . . . . . . . . . . 40 13 Statement by Directors
5.3 Company Secretary . . . . . . . . . . . . . . . . . . . . . . . 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
5.4 Exploration Manager Philippines . . . . . . . . . . . . . 41 14 Glossary of Terms
5.5 Corporate Governance . . . . . . . . . . . . . . . . . . . . 41 14.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . 148
14.2 Technical Terms. . . . . . . . . . . . . . . . . . . . . . . . . . 151
6 Risk Factors 15 Application Forms and Instructions
6.1 Sharemarket Considerations. . . . . . . . . . . . . . . . . 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
6.2 Speculative Nature of Exploration and Mining . . . 43
6.3 Commodity Prices and Exchange Rates . . . . . . . . 43
6.4 Country . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.5 Legal Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.6 Development and Operational . . . . . . . . . . . . . . 44
6.7 Financial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.8 Environmental . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.9 Resource Estimates . . . . . . . . . . . . . . . . . . . . . . . 45
6.10 Land Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Indophil Section 01-03 14/3/02 5:49 PM Page 3

C h a i r m a n ’s L e t t e r

INDOPHIL
R E S O U R C E S N L
ABN 45 076 318 173

14 March 2002

Dear Investor

I welcome the opportunity to invite you to become a shareholder in Indophil Resources NL, an Australian incorporated resources
company focusing its activities on the discovery and development of copper and gold resources in the Philippines.

Indophil has been exploring continuously in the Philippines since 1997, and is amongst the most active mineral explorers in the
country.The Company was founded by Tony Robbins and Chris Middleton, both former long-term executive managers of WMC
Limited’s Exploration Division.They have extensive Australian and International experience in the resources sector, and have been
involved in the discovery of a number of copper, gold and nickel deposits.Tony and Chris have established strong relationships in
the Philippines with companies involved in the resources sector, relevant government departments and local communities.Tony is
President of the Philippine Mineral Exploration Association, and is a board member of the Philippines Chamber of Mines.

The Philippines has a long history of mining and its mineral endowment ranks amongst the highest in the world for gold and copper.
The geology is comparable with Indonesia and Papua New Guinea, where modern exploration has located major deposits.
The Philippines has been subject to a relatively low level of modern exploration which provides an exceptional opportunity for
major new mineral discoveries as evidenced by the recent Boyongan copper-gold discovery in the Surigao district of Mindanao.

Indophil has developed a substantial exploration portfolio with seven projects comprising four granted licences and eleven tenement
applications.The Company, in joint venture with a member of the Alcantara Group, a respected Philippines organisation with major
business interests in Mindanao, has made a significant gold discovery at Manat in southern Mindanao. Drilling to date has identified a
conservative inferred mineral resource containing 272,000 ounces of gold and associated silver and base metals with the mineralised
zone open at depth and along strike.We believe that Manat has the potential to become a major deposit, and an early focus for
Indophil will be to increase and upgrade the resource base, especially for mineralisation amenable to open pit development.The
Company is also intending to drill at Labo, Hinotongan and Bunawan, where our exploration to date has defined encouraging signs of
mineralisation and attractive drilling targets.The Company is now seeking to raise $5 million, through the issue of 20 million Shares,
to fund the ongoing exploration of its project portfolio and tenement acquisition.This offer of Shares is underwritten by ABN AMRO
Morgans Corporate Limited.

Consistent with our strategy to evaluate new opportunities, Indophil is currently pursuing the acquisition of an interest in the
Tampakan Project located in southern Mindanao through our association with the Tampakan Group of Companies.Tampakan is a
major copper-gold deposit with a published geological resource of 900 million tonnes at 0.75% copper and 0.3g/t gold (non JORC).
The Company has also reached agreement with MIM Holdings Limited and the Alcantara Group, current shareholders in Indophil,
which give them the right to acquire an interest in the project. Both parties bring considerable expertise to the association and we
welcome their involvement. Although the sale of Tampakan by WMC Resources International Pty Ltd is currently the subject of a legal
challenge by another party, we remain optimistic of a positive outcome.The Proposed Tampakan Acquisition (including the risks
associated with it) is discussed in detail in Section 9.

The interest in smaller resource companies has improved markedly over the past few months as a result of several new significant
discoveries. I believe that the Company is well positioned given its attractive exploration package.

I look forward to welcoming you as a shareholder in the Company.

Yours sincerely

Bryan Davis
Chairman 3
Indophil Section 01-03 14/3/02 5:49 PM Page 4
Chris Middleton, Mike Page and Tony Robbins in the field in Mindanao
2 Investment Over view
This summary is not intended to provide full information on
the Shares and Options offered by this Prospectus. In
deciding to apply for Shares and Options you should read
this Prospectus carefully in full. If you are in any doubt as to
the course that you should follow, please consult your
stockbroker or other professional advisor.
2.1 Business Overview
Background
Indophil is a mineral exploration company incorporated in
Australia in December 1996 and focusing its activities on the
discovery and subsequent development of copper and gold
resources in the Philippines.
The Company has concentrated on the Philippines because
of the known high endowment for copper and gold, the
limited extent of modern exploration and the considerable
experience and success of the Company’s Executive
Directors and senior management team in that country.
Over the past four years the Company has:
established itself as a prominent and respected mineral
explorer;
assembled an attractive portfolio of exploration projects
with encouraging indications of mineralisation; and
made a significant gold-silver-base metals discovery at
Manat in southeast Mindanao.
Indophil’s activities to date have been funded by its existing
shareholders including Lion Selection Group Limited. This
capital raising of $5 million, through the issue of 20 million
Shares, is directed mainly towards funding ongoing
exploration and evaluation of the current project portfolio
and tenement acquisition.
Exploration Portfolio (see Section 4)
The Indophil exploration portfolio contains seven gold and
copper-gold projects (Figure 2.1) ranging from the more
advanced Manat Project in southeast Mindanao to the
Northern Sierra Madre Project in northern Luzon which is
at a “grassroots” stage. These projects comprise four
granted licences and eleven tenement applications totalling
1,403 square kilometres.
4
At the Manat Project in southeast Mindanao, the
Company in joint venture with a member of the Alcantara
Group has discovered a major gold-silver-base metals
epithermal vein system referred to as the Magas Vein
Zone. To date, a limited program of drilling on the Magas
Vein Zone over a strike-length of one kilometre has
defined an inferred mineral resource containing 272,000
ounces of gold and 1.75 million ounces of silver,
potentially amenable to open pit development. This
structurally controlled mineralised zone is open along
strike (exploration to date has shown the structure to be
discontinuous over a strike length of 3.4km) and at depth
and consequently has the potential to become a major
deposit. Future exploration will be directed towards
delineation and resource-definition drilling to increase the
resource base. Some drillholes have intersected
considerable widths of porphyry copper-gold
mineralisation in proximity to the Magas Vein Zone (eg
MNTD14 - 227m at 0.19% copper and 0.30g/t gold).The
Magas Vein Zone is one of 3 major mineralised structures
within the project area.
The Company has undertaken a limited program of
shallow exploration drilling at the Labo Project located in
the Paracale Goldfields of southern Luzon with 10 out of
11 drillholes intersecting significant gold mineralised
zones including 5.9m at 3.16g/t, 5.99m at 4.87g/t and
8.24m at 2.61g/t. Follow-up drilling programs are planned.
The Bunawan Project in eastern Mindanao contains
extensive areas of gold anomalous geochemistry
associated with known epithermal gold mineralised zones,
some of which were the focus of small-scale mining
activity. Although the tenement application covering the
project area has been contested, the Company is hopeful
of resolving the dispute and it is anticipated that attractive
drill targets will be defined within one year of title grant.
At the Hinotongan Project in southeast Negros, the
Company in association with the Philippine National Oil
Company (PNOC), is exploring a geological environment
that has strong similarities to the Tampakan Project in
southern Mindanao which hosts the major Tampakan
copper-gold deposit. Early exploration drilling is planned.
The Company’s exploration projects in southern Leyte,
Northern Sierra Madre (NSM) in northern Luzon and
Buda in central Mindanao are at an early stage but all
contain indications of copper and/or gold mineralisation.
Indophil Section 01-03 14/3/02 5:49 PM Page 5

Exploration Projects

2. Investment Overview
Figure 2.1 - Indophil Exploration Projects
Indophil Resources NL February 2002

Large Copper and Gold Deposits

(Non Indophil) Northern Sierra Madre
1. Victoria Au 1-3
2. Far South East Cu-Au
3. Lepanto Cu-Au 4
4. Didipio Cu-Au 5
5. Baguio Au 6
6. Sto.Tomas Cu-Au
7 Labo
7. Dizon Cu-Au
8. Longos Au
9. Tapian Cu-Au Manila
10. Aroroy Au 8
11. Atlas Cu-Au
12. Sipalay Cu-Au
13. Placer Au 9
14. Boyongan Cu-Au
15. Diwalwal Au
16. KingKing Cu-Au 10
17. Tampakan Cu-Au

Leyte

11
10.00N

12 13
14

Hinotongan
Bunawan
Manat
Buda 15
16

17

0 300 Tampakan
(Proposed acquisition)

K I L O M ET R E S
120.00E 125.00E

5
Indophil Section 01-03 14/3/02 5:49 PM Page 6
Exploration Manager - Alan Buenavista with Manobo indigenous people - Buda Project
2 Investment Over view
Proposed Exploration Work Program and Budget
A proposed two year exploration work program and budget
costing $3.95 million has been prepared for the current
exploration portfolio.The main objectives of this program
are to increase the resource base at Manat and to advance
the exploration of the Company’s projects towards the
discovery and subsequent definition of significant copper
and gold mineral resources.
A summary of the proposed work program and budget is
provided in Section 2.4 and a more detailed account in
Section 4.4.
Proposed Tampakan Acquisition (see Section 9)
The Company has entered into contractual arrangements
relating to the acquisition of an Operating Interest in the
Tampakan Project in southern Mindanao, which contains one
of the largest undeveloped copper-gold deposits in South-
East Asia.
In its June 1998 Quarterly Report to the ASX,
WMC Limited reported that the Tampakan deposit had an
indicated and inferred geological resource of 900 million
tonnes at 0.75% copper and 0.3 g/t gold at a 0.5% copper
cut-off grade (non JORC).The completion of this acquisition
is currently the subject of a legal challenge by another party
and a review by the Philippine Government.
Applicants should be aware that there are a number of
specific risks associated with the Proposed Tampakan
Acquisition which are identified in Section 9.6.
The Board views the Proposed Tampakan Acquisition as a
major opportunity for the Company and despite the legal
challenge significant progress towards the acquisition has
been made to date.
However, neither the Company nor its Directors give any
guarantee that the Proposed Tampakan Acquisition will
proceed to completion. Additionally, because the Proposed
Tampakan Acquisition has not been completed, Indophil and its
consultants have not had full access to the vast amount of
project data. Accordingly, the Tampakan Project has not been
included in the Company’s current exploration portfolio for
the purposes of the Independent Geologist’s Report in Section
7 and the Solicitor’s Report - Philippine Tenements in Section 8.
Experienced Board and Management
One of the Company’s main strengths is its Board and
management team. Tony Robbins, Managing Director, and
6
c o n t ’d
Chris Middleton, Director of Exploration are both former
long-term WMC Limited Exploration Division managers.
They have extensive international resources experience,
especially in the Asia-Pacific region, and have been closely
involved in the discovery of major gold, copper and nickel
deposits in Australia and the Philippines. Both Executive
Directors are committed to developing Indophil into a
significant Australian-controlled resources company.
Bryan Davis was appointed to the Board and elected Non-
Executive Chairman of the Company in November 2000.
Bryan is a mining engineer with more than 35 years mining
and management experience in the resources industry. He is
currently a Non-Executive Director of Newcrest Mining
Limited and Coal and Allied Industries Limited and was a
former Executive Director of Pasminco Limited.
Kevin Robinson is a Non-Executive Director with over 19
years experience in the resources and investment sectors.
Kevin is an Executive Director of Selection (LSG)
Management Pty Ltd, which is the Manager of Lion Selection
Group Limited. He is also a Non-Executive Director of
Lafayette Mining Limited and Sedimentary Holdings NL.
Alan Buenavista is Indophil’s Exploration Manager in the
Philippines. Alan is an experienced, respected and successful
geologist and when in the employment of WMC Philippines
Inc. played an important role in the recognition of the
potential and subsequent discovery of the major Tampakan
copper-gold deposit in southern Mindanao.
2.2 Description of Offer
This Prospectus offers 20 million Shares for subscription at
$0.25 per Share to raise $5 million, which will represent 20.0%
of the issued capital of the Company. For each Share issued,
shareholders will receive one Option for nil consideration.
The Options are structured to enable Indophil to raise
additional equity for the purpose of future exploration, in
particular exploration and evaluation of the Proposed
Tampakan Acquisition.
Each Option will entitle the holder to subscribe for one share
in Indophil at a price of $0.25. Details of the Options are
contained in Section 12.9.3.
The Options may be exercised by the holder at any time prior
to 31 December 2004. Further, at any time after 90 days from
the Listing Date, the Company may call for the exercise of the
Options. If the call for the exercise of the Options is made,
Indophil Section 01-03 14/3/02 5:49 PM Page 7

the Company will announce an exercise period of 40 business
days for the exercise of the Options. Any Options not
exercised during the exercise period will be forfeited. The
Directors may set the timing for the call for the exercise of
the Options at their discretion, subject to a final date for
exercise of the Options of 31 December 2004.
The Company will apply for official quotation of the Options
on the ASX. The Options will be separately tradeable.
Details of the Offer are set out in Section 3.
The Offer is fully underwritten by ABN AMRO Morgans
Corporate Limited with the exception of the attaching
Options. Details of the Underwriting Agreement are set out
in Section 12.6.
2. Investment Overview
Undertake drilling programs for the discovery and
definition of copper and gold mineral resources at the
Hinotongan, Labo and Bunawan Projects.
Progress exploration on the Leyte, Northern Sierra
Madre and Buda Projects aimed at prospect definition in
preparation for future drilling programs.
A proposed two year work program and budget has been
prepared by the Company (see Section 4.4) and reviewed by
the Independent Geologist (see Section 7). Costs of this
proposed work program are tabulated below.These costs
include general administrative and corporate overheads.
Applicants should note that proposed expenditure on a
number of exploration projects is subject to the formal
grant of title.

2.3 Key Offer Statistics Proposed Two Year Budget on Philippine

Exploration Projects
Offer Price $0.25 per Share
Project Year 1 ($) Year 2 ($) Totals ($)
Shares held by existing shareholders (1)
80,044,505
Manat 833,000 867,000 1,700,000
Shares offered under this Prospectus 20,000,000
Labo** 276,000 250,000 526,000
Total number of shares on issue after 100,044,505 Bunawan* 108,000 243,000 351,000
listing on the ASX Hinotongan 316,000 252,000 568,000
Market capitalisation (2)
$25,011,126 Leyte** 242,000 265,000 507,000
NSM* 50,000 117,000 167,000
Existing options (1)
24,473,000
Buda* 50,000 81,000 131,000
Options issued under this Offer 20,000,000 Totals 1,875,000 2,075,000 3,950,000
Total options (3)
44,473,000 *
Subject to the formal grant of title
Total number of shares and 144,517,505 **
Some of these project tenements have yet to be approved.
options (fully diluted)(4) The balance of monies raised through this Offer and the
Notes: Company’s cash reserves at the time of listing, less
(1) Existing shareholders’ shares and options may be subject to escrow
restrictions determined by the ASX for a period of up to
underwriting and Offer related fees, will be directed towards
24 months from the Listing Date. meeting additional public company costs once listed and part
(2) At the Offer Price of $0.25 per share. of the expenses of advancing the Proposed Tampakan
(3) Existing options are and will remain unlisted. Application will be
made for listing of the Options offered pursuant to this Prospectus.
Acquisition.
(4) These figures exclude:
(a) the proposed issue of 6,629,630 shares at no cost and Applicants should appreciate that it is normal exploration
4,629,630 options exercisable at $0.20 per option to the industry practice to vary work programs and budgets in
Tampakan Group of Companies subject to the successful
accordance with exploration results. It is the Directors’
completion of the Proposed Tampakan Acquisition
(see Section 9.5.2). intention to adhere to these norms and direct the use of
(b) Pursuant to the terms of the MIM Memorandum of funds to those projects with potential to produce the best
Understanding (Section 9.5.5), MIM is to subscribe $500,000 in
exploration outcomes, including new projects.
shares in the Company at the price of this Offer ($0.25 per
share) no later than 90 days after Tampakan Completion subject
to MIM’s satisfaction with certain pre-conditions. MIM is to The successful completion of the Proposed Tampakan
subscribe another $1,000,000 at the future public offer price (if Acquisition would result in the Company having to pay the
applicable) or at $0.35 per share where funds are raised by TGC US$500,000 and directing, as stated above, some
alternate means, when the Company has $9,000,000 in available
and dedicated funds for use in the Tampakan Project or can available funds towards advancing the exploration and
otherwise demonstrate there are sufficient available and evaluation of the Tampakan Project. Exercise of the Options
dedicated funds to complete the agreed work program on the issued by this Prospectus will provide an additional source of
Tampakan Project.
funding in this regard.
2.4 Purpose of the Offer and The Directors are of the opinion that on completion of the
Application of Funds Offer, the Company will have sufficient working capital to
The primary purpose of this Offer is to raise funds for the carry out its objectives.
ongoing exploration of the Company’s projects in the
2.5 Capital Structure
Philippines including:
Indophil Resources NL was formed in December 1996 with
Further delineation and resource definition drilling at the an initial capital investment by its founders. Lion Selection
Manat Project to increase the current gold-silver-base Group Limited invested in the Company in 1997 and in
metal resource at Magas. doing so became its majority shareholder and primary
source of funding. Since September 2000 additional funding
7
Indophil Section 01-03 14/3/02 5:49 PM Page 8

Indophil Director Kevin Robinson beside a mineralised outcrop - Manat Project

2 Investment Over view c o n t ’d

of $6,209,250 has been raised from sources including Lion 2.8 Employee Share and Option Plan
Selection Group Limited and Australian Selection Pty Ltd,
The Board will consider the implementation of an Employee
a subsidiary of Lion Selection Group Limited.
Share and Option Plan following the listing of the Company
Following the completion of this Offer there will be a total of on the ASX.
100,044,505 shares and 44,473,000 options on issue of which
the existing shareholders will hold 80,044,505 shares, 2.9 Taxation Considerations
representing 80.0% of the issued capital of the Company. The Applicants are advised to seek their own professional advice
terms of the options are set out in Section 12. in relation to their individual taxation situation
(see Section 12.5).
Issued Capital
2.10 Investment Risks
Shares
Applicants should be aware that there are risks associated
Shareholder No. of Shares %
with any investment in the share market. In addition, there
Existing shareholders 80,044,505 80.0 are a number of risk factors specific to the Company, the
Current Offer 20,000,000 20.0 industry in which the Company operates and relating to the
Total issued capital general business environment. Such risk factors may impact
on listing 100,044,505 100.00 on the performance and financial position of the Company.
Accordingly, investment in the Shares and Options offered by
Options this Prospectus should be regarded as speculative.
Optionholder No. of Options Exercise Price Applicants should read this Prospectus in full to appreciate
Existing shareholders 14,600,000 $0.20 the risk factors associated with an investment in the
3,436,500 $0.35 Company. Details of the key risk factors of which Applicants
6,436,500 $0.50 should be aware are set out in Section 6 and Section 9.6.
Current Offer 20,000,000 $0.25
Total options on issue 44,473,000 2.11 Company Prospects
As stated in Section 6.2, the industry in which the Company
2.6 Restricted Securities operates, being mineral exploration, is a high-risk business
with no guarantee of success. An investment in mineral
The ASX may, as a condition of granting the Company’s exploration is therefore considered speculative.
application for admission to the Official List of the ASX,
classify shares and options held by the existing shareholders As a result of such uncertainties, the Directors of Indophil
as “restricted securities”. If so classified, such shares and consider at this time that they do not have reasonable
options (including any shares issued on exercise of the grounds for a directors’ forecast of future revenue or
options) would be required to be held in escrow for a period profitability that would be suitable to include in this
to be determined by the ASX of up to 24 months and, Prospectus.
subject to limited exceptions, would not be able to be sold,
Information relating to the prospects of Indophil is contained
assigned or transferred for that period without prior
throughout this Prospectus.
approval of the ASX.

2.7 Dividend Policy 2.12 No Valuation

No formal valuation of the exploration project portfolio of
The Company is involved in exploration that is expected to
the Company has been included in this Prospectus.The
dominate activities for the next 2 years. The Directors do
Company makes no representation as to value of the
not anticipate declaring any dividends during this period.
exploration projects. It is recommended that Applicants
After this period, dividends would only be payable if the
should make their own assessment as to the value of the
Company’s profitability, cash flow and capital requirements
exploration projects.
enabled a distribution to be declared by the Directors.
There is no guarantee that any dividend will be franked.
8
Indophil Section 01-03 14/3/02 5:49 PM Page 9

3. Details of the Offer

Helicopter assisted reconnaissance - Northern Sierra Madre Project

3 Details of the Offer

3.1 The Offer 3.2 Timetable
Offer opens: 22 March 2002
Applicants are invited by the Company to subscribe for
Offer closes: 17 April 2002
20 million Shares at the Offer Price of $0.25 per Share which Expected despatch of holding statements: 26 April 2002
upon listing will represent 20.0% of the issued capital of Expected quotation of Shares and
Indophil. For each Share issued, shareholders will receive one Options on the ASX: 30 April 2002
attaching Option for nil consideration. Each Option will entitle
All dates are subject to change and are indicative only.
the holder to subscribe for one share in Indophil at a price of
The Company in consultation with the Underwriter has the
$0.25. Details of the Options are contained in Section 12.9.3.
right to vary these dates, without prior notice, including the
The Options may be exercised by the holder at any time prior right to close the Offer early. Applicants are encouraged to
to 31 December 2004. Further, at any time after 90 days from submit their Application Forms as early as possible.
the Listing Date, the Company may call for the exercise of the
Options. If the call for the exercise for the Options is made, 3.3 How to apply for Shares
the Company will announce an exercise period of 40 business Application for Shares may only be made on the Application
days for the exercise of the Options. Any Options not Form forming part of this Prospectus. The Application Form
exercised during the exercise period will be forfeited. The is attached to this Prospectus. Detailed instructions on how
Directors may set the timing for the call for the exercise of to complete the Application Form are set out on the reverse
the Options at their discretion, subject to a final date for of the Application Form.
exercise of the Options of 31 December 2004.
An application must be made by completing a paper copy
The Company will apply for official quotation of the Options of the Application Form and it must be accompanied by
on the ASX. The Options will be separately tradeable. payment in Australian currency of $0.25 per Share.
The Offer is fully underwritten by ABN AMRO Morgans Cheques or bank drafts must be made payable to the “Indophil
Corporate Limited with the exception of the attaching Resources NL Share Offer Account” and should be crossed
Options. Details of the Underwriting Agreement are set and marked “not negotiable”. The Company will not accept an
out in Section 12.6. Application Form electronically. Completed Application Forms
and Application Monies must be returned to either:
Applications must be for a minimum of 8,000 Shares and
thereafter in multiples of 1,000 Shares. The Company, ABN AMRO Morgans Limited
Level 29, Riverside Centre
however, reserves the right to issue Shares to Applicants in
123 Eagle Street
full, to issue a lesser number of Shares than those for which Brisbane, QLD 4000
an application has been made, or to decline an application. GPO Box 202
An application will be treated as irrevocable. Brisbane QLD 4001
Telephone: (07) 3334 4888 or
Payment in respect of the Shares is to be made in full on
application.The rights attaching to the Shares are detailed Indophil Resources NL Share Offer
in Section 12.4. No brokerage or stamp duty is payable by Computershare Investor Services Pty Limited
Level 12, 565 Bourke Street
Applicants under the Offer.
GPO Box 52A
Melbourne Victoria 3001
Telephone: 1800 850 505
no later than 5:00 pm Melbourne time on the Closing Date,
17 April 2002.
9
Indophil Section 01-03 14/3/02 5:49 PM Page 10
Exploration fly camp - Manat Project
3 Details of the Offer
Applicants with questions on how to complete the
Application Form or who require additional copies of
the Prospectus can contact ABN AMRO Morgans or
visit the website www.abnamromorgans.com.au to
download a copy of the Prospectus.
3.4 Allotment
The Company will allot Shares and Options as soon as
possible after the Closing Date. The Underwriter, in
consultation with the Company, will allocate the Shares and
Options and reserves the right to allocate the Shares and
Options offered under this Prospectus in full on any
application or to allocate any lesser number of Shares and
Options than that applied for, or decline any application.
Where no allocation is made to a particular Applicant or the
number of Shares and Options allocated is less than the
number applied for by an Applicant, surplus Application
Monies will be returned to that Applicant. No interest will
be paid on refunded Application Monies. Any interest earned
on Application Monies prior to issue or return will be, and
will remain, the property of the Company.
Successful Applicants will be notified in writing of the
number of Shares and Options allocated to them as soon
as possible following the allocation made after the Closing
Date. It is the responsibility of Applicants to confirm the
number of Shares and Options allocated to them prior to
trading in Shares and Options. Applicants who sell Shares
and Options before they receive notice of the Shares and
Options allocated to them do so at their own risk.
In the event that admission to the official list of the ASX is
denied, or for any reason the Offer does not proceed, all
Application Monies will be refunded in full without interest.
3.5 Underwriting and Handling Fees
The Offer has been fully underwritten by ABN AMRO
Morgans Corporate Limited with the exception of the
attaching Options.
The Underwriter will receive an underwriting fee equal to
4.0% of the total amount raised by the Offer and a
management fee equal to1.0% of the total amount raised
by the Offer (in both cases excluding amounts raised on
exercise of the Options).
A handling fee of 1.5% will be paid by the Underwriter only
to members of the ASX in respect of successful applications
10
c o n t ’d
lodged by the member and which bears its stamp (other than
Shares which form part of firm allocations).
The Underwriting Agreement provides that the Underwriter
may terminate its obligations to underwrite the Offer in
certain circumstances, or if certain conditions precedent are
not satisfied. These circumstances and further details are
summarised in Section 12.6.
3.6 ASX Listing
An application will be made to the ASX not later than seven
days after the date of this Prospectus for Indophil to be
admitted to the official list of the ASX and for official
quotation of Shares and Options of the Company on the ASX.
The fact that the ASX may admit the Company to its Official
List is not to be taken as an indication of the merits of the
Company or the Shares and Options offered for subscription.
Official quotation, if granted, will commence as soon as
practicable after the issue of initial statements of holding to
successful Applicants.
If permission is not granted for the official quotation of the
Shares and Options on the ASX within three months of the
date of this Prospectus, then all Application Monies received
will be refunded without interest as soon as practicable in
accordance with the Corporations Act.
3.7 CHESS
The Company will apply for the Shares and Options to
participate in the Clearing House Electronic Sub-register
System (“CHESS”). Applicants who are allotted Shares and
Options under this Offer will receive shareholding
statements, in lieu of share certificates, that set out the
number of Shares and Options allotted to each successful
Applicant.
The statement will also provide details of the shareholders’
HIN (in the case of a holding on the CHESS sub-register)
or SRN (in the case of a holding on the issuer sponsored
sub-register). Shareholders will be required to quote a
HIN or SRN, as applicable, in all dealings with a stockbroker
or the Share Registry. Further statements will be provided
to shareholders which will reflect any changes in the
shareholding or optionholding in the Company during a
particular month. Additional statements may be requested
at any time, although the Company reserves the right to
charge a fee.
Indophil Section 01-03 14/3/02 5:49 PM Page 11
Exploration base camp at Bukal - Manat Project
3.8 Overseas Applicants
No action has been taken to register or qualify the Shares,
the Options or the Offer, or otherwise to permit the
public offering of the Shares and Options, in any jurisdiction
outside Australia.
The distribution of this Prospectus within jurisdictions
outside Australia may be restricted by law and persons
into whose possession this Prospectus comes should inform
themselves about and observe any such restrictions. Any
failure to comply with these restrictions may constitute a
violation of those laws.
The Prospectus does not constitute an offer of Shares or
Options in any jurisdiction where, or to any person to
whom, it would be unlawful to issue this Prospectus.
Director of Exploration Chris Middleton and Exploration Manager Alan Buenavista reviewing drill cores from the Manat Project.
3. Details of the Offer
It is the responsibility of any overseas Applicants to ensure
compliance with all laws of any country relevant to his or her
application. The return of a duly completed application will
be taken by the Company to constitute a representation and
warranty that there has been no breach of such law and that
all necessary approvals and consents have been obtained.
3.9 Withdrawal
The Company reserves the right, in consultation with the
Underwriter, not to proceed with the Offer at anytime
before the issue of Shares and Options to successful
Applicants. If the Offer does not proceed, Application
Monies will be refunded. No interest will be paid on any
Application Monies refunded as a result of the withdrawal
of the Offer.
11
Indophil Section 04 14/3/02 5:46 PM Page 12
Chris Middleton and Tony Robbins in the field at Manat
4 Exploration Over view
Since 1997 Indophil has established a substantial portfolio
of exploration projects in the Philippines and made a
significant gold-silver-base metals discovery at Manat in
southeast Mindanao. The Company is now one of the most
active explorers in the country and has established a strong
reputation within the mineral exploration industry. This
section reviews the Company’s exploration strategy,
exploration projects and the proposed work program and
budget to be funded by this capital raising.
References in this Section to Indophil’s interest in each of
the exploration projects refer to the potential maximum
interest which will be held in each project if Indophil fully
exercises its rights under various agreements relating to
equity ownership of subsidiaries, including Indophil
Resources Phils. Inc. (IRPI) and exercising other option and
joint venture rights (see Section 8).
There is cross referencing of figures and tables between this
section and the Independent Geologist’s Report in Section 7,
with figure and table numbers prefixed accordingly.
4.1 Regional Endowment for
Copper and Gold
Major copper and gold deposits, defined here as containing
greater than 5 million tonnes of contained copper metal or
10 million ounces (approximately 300 tonnes) of gold
respectively, are rare, but often distributed in regional
geographic clusters.There is a strong correlation of these
major deposits with the Circum-Pacific Belt as a consequence
of certain geological processes. One of the regional
geographic clusters for major copper and gold deposits
within the Circum-Pacific Belt is the Western Pacific Region
(Figure 4.1), incorporating Papua New Guinea, Indonesia and
the Philippines.This regional cluster contains 11 major
deposits including Grasberg/Ertsberg and Batu Hijau in
Indonesia, OK Tedi, Porgera, Frieda River, Bougainville and
Lihir in Papua New Guinea and the Far South East, Baguio,
Atlas and Tampakan deposits in the Philippines.
Although the Philippines has a long history of mining and a
high known copper and gold endowment, when compared
with other countries in the region, it remains relatively
under explored by modern exploration practices and
technology. As a consequence, it has very good potential for
major new copper and gold discoveries, which is the
principal reason for Indophil’s exploration focus on the
Philippines. This analysis is confirmed by major discoveries at
12
Diwalwal,Tampakan,Victoria and the Company’s own gold
discovery at Manat. It is further supported by the recent
major copper-gold discovery at Boyongan in the Surigao
district of northeast Mindanao which includes intersections
of 365m at 0.81% copper and 1.9 g/t gold in drillhole TSD-6,
and 339m at 1.68% copper and 2.64g/t gold in TSD-15.
The geological environment and associated mineralisation
processes within the Western Pacific Region are conducive
to the formation of certain types of copper and gold
deposits, often in close proximity. These include epithermal,
porphyry copper and skarn deposits, depicted schematically
in Figure 4.2. All of these deposit types are well represented
in the Philippines.
4.2 Indophil’s Exploration Strategy
Indophil’s exploration activity in the Philippines is directed
towards the discovery of all three types of copper and gold
deposits mentioned above. Since inception, the Company
has followed a strategy of acquiring access to properties
with demonstrated mineral potential for these commodities
and deposit types and that also provide an opportunity for
early exploration success.
Future strategy will be directed towards advancing discovery
and resource definition by:
resource definition drilling (Manat);
drilling of defined targets (Hinotongan, Labo, Bunawan);
focusing exploration on the definition of drill targets
(Leyte, NSM, Buda); and
consolidating mineral titles.
Mineral exploration does not take place in a static
environment. As a consequence of changing circumstances
and conditions, and consistent with best strategic
exploration practice, the Company is constantly reviewing
and assessing new opportunities. This is particularly so for
advanced exploration properties with drill indicated
resources. The assessment and potential acquisition of the
Tampakan Project in southern Mindanao (see Section 9) is
consistent with this strategy. The Company also has a policy
of constantly reviewing its exploration results and
relinquishing projects where such results do not meet with
its expectations.
Indophil Section 04 14/3/02 5:46 PM Page 13

4. Exploration Overview
Figure 4.1 Major Copper and Gold Deposits of the Western Pacific Region

Major mineral
deposit containing
>5 MT Copper metal or
>300 t (10 M oz.) Gold
Subduction zone
1
Major fault
2

4 0 1000

Kilometres

10
8
9
6 7 11

Indophil Resources NL February 2002

Pre-Mined Resources
No. Deposit Copper (Mt) Gold (M oz) Type Comments
1 Far South East 4.23 27.8 Porphyry Undeveloped
2 Baguio >25.7 Epithermal Major historical production
3 Atlas 6.58 10.8 Porphyry Major historical production
4 Tampakan* 6.75 8.7 Epithermal/Porphyry Undeveloped
5 Batu Hijau 4.75 12.0 Porphyry In production
6 Grasberg/Ertsberg 34.86 107.0 Porphyry/Skarn In production
7 OK Tedi >3.03 >10.2 Porphyry/Skarn In production
8 Porgera - 20.3 Epithermal In production
9 Frieda River 6.29 11.5 Porphyry In production
10 Lihir - 42.6 Epithermal In production
11 Bougainville 5.76 20.1 Porphyry Production suspended
* Potential Company acquisition (Refer to Section 9)
Prepared by Indophil Resources NL, July 2001 from publicly available information.

Figure 4.2 Typical Copper and Gold Mineralisation Styles in the Porphyry Environment

Volcanic Complex

Pre
sen
ts
urf
ace
Top of "Basement"
Andesite
Older volcanic sediments
Diorite porphyry
Late Intrusion
Diatreme
Limestone
Porphyry Cu-Au stockwork zone
Skarn mineralisation
Low sulphidation epithermal gold veins
High sulphidation epithermal gold veins
and breccia

0 Silica – pyrite
1000m
Clay - pyrite alteration

Note: Prepared by M L Page of Exploration Services International - January 2001 and modified after Sillitoe, 1999 and Cook, 1996.
13
Indophil Section 04 14/3/02 5:46 PM Page 14

4.3 Exploration Project Summary
Indophil’s current exploration portfolio (Table 4.1 and Figure
2.1) comprises seven exploration projects for gold and
copper-gold ranging from the more advanced Manat Project
in Mindanao, where the Company has recently made a
significant gold-silver-base metals discovery, to the grass
roots Northern Sierra Madre Project in Luzon. The
portfolio comprises four approved licences and eleven
tenement applications covering a total area of 1,403 sq km.
The Company’s tenements comprise Mineral Production
Sharing Agreements (MPSA) and Exploration Permits (EP).
The Solicitors’ Report - Philippines Tenements (Section 8),
describes the mineral legislation, the legal status of Indophil’s
tenements and the general terms and conditions relating to
the Company’s option, royalty and joint venture agreements.
4.4 Proposed Work Program and Budget
A proposed two year exploration work program and budget
(Table 4.2) has been prepared for the current Indophil
exploration portfolio and has been reviewed by the
Independent Geologist in preparing his report (Section 7).
The majority of the funds raised by this Offer will be directed
towards the ongoing exploration and evaluation of the
Company’s projects in the Philippines. Potential Applicants
should appreciate that it is normal exploration industry practice
to vary work programs and budgets in accordance with
exploration results. It is the Directors’ intention to adhere to
these norms and direct the use of funds to those projects with
potential to produce the best exploration outcomes.
At the Manat Project planned delineation and resource definition
drilling of the Magas Vein Zone will allow for the estimation of an
indicated mineral resource (JORC classification) on which initial
scoping studies into mine development can be based. During this
phase, the Company anticipates adding significantly to the
current inferred mineral resource estimate containing 272,000
ozs gold, 1.75 million ozs silver and associated lead and zinc.
Drilling programs for the discovery and or definition of copper
and gold mineral resources are planned for the Labo and
Hinotongan Projects. Grid-based exploration and proposed
drilling at the Bunawan Project is subject to the resolution of a
title dispute and the formal grant of title.
Exploration on the Leyte, Northern Sierra Madre and Buda
Projects will be aimed at prospect definition in preparation for
future drilling programs.

Table 4.1 Indophil’s Exploration Portfolio

Project Tenement Total Area Target Type and Indophil Highlights
Details Sq km (Exploration Proposed) Interest
Manat 1 MPSA granted 15.47 Epithermal vein and stockwork gold 50%1 Major gold discovery at Magas
and porphyry copper-gold. with drilling over a strike
(Resource definition and delineation length of 1km. System is open
drilling at Magas and ongoing along strike (potential 3.4 km)
exploration at other prospects) and at depth providing major upside
potential. Significant intercepts of
porphyry copper-gold mineralisation.
Labo 1 MPSA granted 28.73 Epithermal gold, porphyry and skarn 100% 10 of 11 drillholes completed
1 MPSA application associated copper-gold. (Follow-up drilling 100%2 to date on 2 prospects (Pael
at Pael and Gaerlan with ongoing and Gaerlan) have intersected
exploration at other prospects) significant gold mineralisation including
5.99m at 4.87g/t and 8.24m at 2.61g/t
Encouraging trench results.
Bunawan 1 MPSA application 24.30 Vein and volcanic-hosted disseminated 100%1,2 Strong stream-sediment gold
gold. (Planned grid-based exploration anomalies associated with
including drilling) extensive areas of hydrothermal
alteration and associated gold
mineralised veining
Hinotongan 1 EP granted 89.69 Epithermal and porphyry copper-gold. 65%1 Geological analogue to the major
Large copper-gold deposit similar to Tampakan copper-gold deposit.
Tampakan. Outcropping copper mineralisation
(Planned drilling of established targets) associated with siliceous breccias and
major structures.
Leyte 1 MPSA granted 238.14 Epithermal gold and porphyry 100% Large areas of hydrothermal
1 MPSA application copper-gold. Possible VMS style. 50%1,2 alteration associated with
1 EP application (Grid-based exploration to define 50%1,2 anomalous geochemistry. Known
drill targets) Au-Ag-Cu-Pb-Zn resource at the
Pandan Prospect
NSM 4 EP applications 588.87 Porphyry copper-gold. 100%2 Channel sampling of an
(Reconnaissance exploration to define outcropping massive sulphide lens
targets for grid-based exploration)2 has returned 5.8m at 31g/t gold, 80g/t
silver and 1.05% copper.
Buda 3 EP applications 417.74 Porphyry copper-gold and VMS style. 100%2 Potential for porphyry
gold-base metals mineralisation copper-gold. Copper and arsenic
(Reconnaissance exploration to define stream sediment anomalies associated
targets for grid-based exploration)2 with large areas of hydrothermal
alteration.
1 Potential maximum interest that can be earned.
14 2 Subject to tenement approval
Indophil Section 04 14/3/02 5:46 PM Page 15

Table 4.2 Indophil Resources – Proposed 2 Year Exploration Work Program and Budget
Project Work Program Details Y1 ($) Y2 ($) Total ($)

4. Exploration Overview
Manat Magas Prospect: Delineation and resource definition diamond Indophil internal costs2 384,000 384,000 768,000
drilling (3,800m) of the Magas Vein Zone (MVZ) to generate a Tenement Costs 3,000 3,000 6,000
measured and indicated resource to JORC status on which Site Access 4,000 4,000 8,000
mine-scoping studies can be based. Main focus will be between Diamond Drilling at $150/m 360,000 360,000 720,000
50,000N and 51,000N to a depth of RL700. Mine-scoping studies to Assaying Costs 41,000 39,000 80,000
include resource estimation, geological, metallurgical, environmental, IP surveying at $2,000/km 14,000 10,000 24,000
financial and community studies. Metallurgical Studies 10,000 20,000 30,000
Pagtulian and other prospects: Detailed geological Environmental Studies 6,000 6,000 12,000
mapping, soil geochemical surveys (400 samples), IP surveying (12km) Community Assistance Grants 5,000 5,000 10,000
and diamond drilling (1,000m) of selected targets to locate significant Resource Estimation 6,000 6,000 12,000
mineralisation. Geotechnical Studies - 10,000 10,000
Mine Scoping Studies - 20,000 20,000

Totals 833,000 867,000 1,700,000

Labo De Jesus: Ground magnetic surveys (20km), detailed geological Indophil internal costs2 96,000 96,000 192,000
mapping and orientation IP traversing over main prospect areas. Tenement Costs 30,000 30,000 60,000
Selective trenching (400m). Selective shallow reverse circulation drill Site Access 4,000 4,000 8,000
traversing (1,600m) of the Pael, Gaerlan and Eko prospects to define Diamond Drilling at $125/m - 100,000 100,000
mineralised zones. Resource estimation, metallurgical testing and mine RC Drilling at $40/m 64,000 - 64,000
scoping studies if appropriate. Assaying Costs 38,000 10,000 48,000
Palado1: Grid-based (200m X 40m) and infill multi-element soil IP surveying at $2,000/km 24,000 - 24,000
sampling (600 samples) of the Malacbang, Mahawanhawan, Tabas and Ground Magnetics @ $500/km 20,000 - 20,000
Santa Ana prospects. Detailed geological mapping and ground magnetic Metallurgical/Scoping Studies - 10,000 10,000
surveys (20km). Orientation IP surveys (6km). Limited shallow
diamond drilling program (800m) of anomalous zones to locate
significant mineralisation. Totals 276,000 250,000 526,000

Bunawan1 Resolve tenement dispute with various parties. Indophil internal costs2 96,000 96,000 192,000
Grid-based multi-element soil sampling Tenement Costs 10,000 45,000 55,000
(200m x 50m) over the Away and Singanan prospects (300samples). Site Access - 4,000 4,000
Detailed geological mapping and ground magnetic surveys (20km). Community Assistance Grants 2,000 4,000 6,000
IP surveys (6km) over geochemical anomalies and geological targets. IP surveying at $2,000/km - 12,000 12,000
Shallow RC drilling (1200m) of anomalous zones to locate significant Ground Magnetics @ $500/km - 10,000 10,000
mineralisation. RC Drilling at $40/m - 48,000 48,000
Assaying Costs - 24,000 24,000

Totals 108,000 243,000 351,000

Hinotongan Selective IP and resistivity traversing to help focus drill targets Indophil internal costs2 144,000 144,000 288,000
(subject to access). Limited program of helicopter-supported diamond Tenement Costs 50,000 50,000 100,000
drilling (900m) to test geological and geochemical targets and Community Assistance Grants 2,000 4,000 6,000
exploration concepts. Detailed geological mapping of drillsite areas. IP surveying at $2,000/km 12,000 - 12,000
Diamond Drilling at $170/m 102,000 51,000 153,000
Assaying Costs 6,000 3,000 9,000

Totals 316,000 252,000 568,000

Leyte St Bernard: Assay soil and rock samples from a 200x80m Indophil internal costs2 144,000 144,000 288,000
grid-based soil sampling program over an area of advanced argillic Tenement Costs 79,000 75,000 154,000
alteration (285 samples). Infill soil sampling (115), ground magnetic Site Access 2,000 5,000 7,000
survey and IP traversing (6km) over geochemical anomalies to define IP surveying at $2,000/km - 12,000 12,000
drill targets. Assaying Costs 16,000 26,000 42,000
Sogod1: Stream sediment sampling of the project area at Community Assistance Grants 1,000 3,000 4,000
1 sample/km2 (250 samples) and associated photo-geological
interpretation. Grid-based soil geochemical surveys (12km2, 1200
samples) over key target areas and associated detailed geological
mapping. Totals 242,000 265,000 507,000

NSM1 Area clearance on 2 EP applications directed towards tenement Indophil internal costs2 48,000 48,000 96,000
approval. Photo-geological interpretation and data integration. Stream Tenement Costs - 60,000 60,000
sediment sampling at 1 sample/km2 (250 samples) and reconnaissance Community Assistance Grants 2,000 1,000 3,000
mapping to define targets for future grid-based exploration. Assaying Costs - 8,000 8,000

Totals 50,000 117,000 167,000

Buda1 Photo-geological interpretation and data integration. Selected stream Indophil internal costs2 48,000 48,000 96,000
sediment sampling at 1 sample/km2 (130 samples) and reconnaissance Tenement Costs 0 28,000 28,000
mapping for future grid-based exploration. Community Assistance Grants 2,000 1,000 3,000
Assaying Costs - 4,000 4,000

Totals 48,000 50,000 81,000 131,000

Grand Total 1,875,000 2,075,000 3,950,000

1. Subject to tenement approval
2. Indophil internal costs include technical staff salaries and associated oncosts ($48,000/month), casual staff ($4,000/month) exploration
supplies ($6,000/month), travel and accommodation (6,000/month) and administration and depreciation ($16,000/month).These costs are 15
distributed on a pro-rata basis. Assaying: Core and stream sediment samples $30/sample, soil samples $20/sample.Tenement costs include
option payments, tenement approval fees and an external consultant’s retainer.
Indophil Section 04 14/3/02 5:46 PM Page 16
Mineralised veining in drill core - Magas Prospect
4.5 Exploration Project Review
This subsection contains a summary of the location, tenure,
geology and exploration conducted and proposed for each
of the Company’s seven exploration projects. Information in
this section, unless stated otherwise, is based on information
held by the Company.
4.5.1 Manat Project (Indophil currently holding 25%
interest and earning to 50%)
Highlights
Significant new gold-silver-base metal discovery at the
Magas prospect.
The structure hosting the Magas Vein Zone (MVZ)
extends discontinuously over a strike length of 3.4km.
Drilling over a 1km strike length of the Magas Vein Zone
has intersected gold mineralisation in all holes including:
24m at 4.53g/t
51m at 2.93g/t
9.9m at 7.16g/t
6.2m at 10.86g/t
15.7m at 5.26g/t
30.1m at 2.62g/t
This drilling has defined an inferred mineral resource
containing 272,000ozs gold and 1.75 million ozs silver.
Early drilling is planned to increase this conservative
resource base.
The Magas Vein Zone is one of three known mineralised
structures within the project area.
Wide intercepts of porphyry copper mineralisation have
been intersected, including 227m at 0.19% copper and
0.30g/t gold in drill hole MNTD 14.
Location and Infrastructure
The Manat Project is located in southeast Mindanao
approximately 60km northeast of the port city of Davao and
is accessed via the main all weather highway linking Davao
with northern Mindanao and then approximately 20km of
municipal gravel roads from the town of Nabunturan. The
topography within the project area is moderately rugged
with peak to valley elevations of 500m.The district has had a
history of mining activity over the past two decades and
small-scale mining activity has contributed significantly to the
local economy.
16
Tenure
Manat is a joint venture with Alsons Development and
Investment Corporation (Aldevinco), an affiliate of the
Alcantara Group, which has major business interests in
Mindanao.The joint venture covers an approved 15.47 sq km
MPSA currently in its exploration term, with Indophil earning
to a maximum 50% interest through sole funding a staged
exploration program costing US$2.25 million. To date,
Indophil has earned a 25% interest in the project after
expending approximately US$1 million.
Regional Geology and Mineralisation
Manat is located within the Masara mineral district, a
well-endowed section of the eastern Mindanao Volcanic Arc.
The district hosts several significant epithermal gold and
porphyry copper-gold deposits including King King, Amacan
(North Davao), Sabena, Hijo and Masara (Figure 4.3).The
King King porphyry copper deposit is one of the largest in
the Philippines with a published resource of 398 million
tonnes at 0.34% copper and 0.52g/t gold.
Exploration Activity
Previous exploration on this property by WMC Exploration
Corporation (WMCE) in joint venture with Aldevinco,
resulted in a limited program of diamond drilling at three
separate prospects,Taglayag, Katangbuan and Magas (MNTD1
to 6 for a total of 1,560.35m) (Figure 4.4b). A single drillhole
(MNTD6) by WMCE at the Magas prospect located in the
south of the joint venture area, intersected eight separate
mineralised intervals for a cumulative weighted average of
94m at 3.02g/t gold and 9.25g/t silver at a 1g/t gold cut-off.
Individual intersections for this hole are given in Table 7.3.
WMCE withdrew from their joint venture with Aldevinco in
May 1998 following a decision to cease general exploration
in the Philippines and focus on their Tampakan copper-gold
project in southern Mindanao. Indophil was successful in
acquiring an interest in the project in November 1998 after
competing with several major resource companies.
Indophil’s exploration activity at Manat has been almost
exclusively focused towards ongoing exploration on the
Magas prospect with some grid-based activity at Pagtulian
and Katungbuan (Figure 4.4b). Magas is one of three sub-
parallel mineralised structures within the project area with
the others (Manat River and Panuraon) requiring systematic
grid-based exploration and subsequent drilling. Considerable
potential exists for porphyry copper-gold mineralisation
which will be the subject of some future exploration activity.
Indophil Section 04 14/3/02 5:46 PM Page 17

Manat

4. Exploration Overview
Figure 4.3 Location of the Manat Project and Significant Gold & Copper-Gold deposits of Southeast Mindanao

LUZON

PASIAN
SIGNIFICANT DEPOSITS:
Epithermal Au-Ag
Monkayo
Boston Porphyry Cu-Au
SAMAR
DIWALWAL

LEYTE
10N
7.45N

MINDANAO
MAP AREA

120E

BANGO

Manat
DAVAO ORIENTAL

SABENA
DAVAO DEL NORTE

Mawab

NOCNOCAN SARABAN
Tagum

PANURAON
MASARA
MAPULA
KANARUBE AMACAN

HIJO
DIGITAL
ELEVATION
7.15N

MODEL of KINGKING
SOUTHEAST
MINDANAO

Pantukan BURINGOT
COMPLEX

0 10

Kilometres

Mati
126.00E Pujada
PUJADA
Bay Indophil Resources NL February 2002
BAY

17
Indophil Section 04 14/3/02 5:46 PM Page 18

Figure 4.4a Manat Project - Simplified Geology

Manat 0 1

Kilometre

D4-5

MPSA

?
094-97-XI

?
Magas
Vein Zone D1-3
D6-22

Dacite & Andesite (Post mineralisation cover)

Magas Intrusive Complex D14

(Andesite Porphyry, intrusive breccias and pyroclastics)

Limestone

Hornblende diorite porphyry

Quartz diorite

Dark andesite

Figure 4.4b Manat Project - Key Prospects and Significant Structures

INOPUAN-SARABAN

NOCNOCAN
M
an
at
M Rive
an
at rS
R. tru
ct
ur
e
PAGTULIAN
PROSPECT D4-5 KATUNGBUAN
Pan

PROSPECT
u

MPSA
rao

094-97-XI
n
Str

TAGLAYAG
uct

PROSPECT
?

Magas
ure

Vein Zone
D6-22 D1-3
D1-174m@ 0.16%Cu, 0.22g/t Au
SAMICO
Open Pit MAGAS 0 1
PROSPECT
D14 Kilometre

PANURAON
.

0 1.4
R

227m@ 0.19%Cu, 0.30g/t Au

as
ag
M

KILOMETRE
Gold Deposits
Scale 1: Lake
Leonard

Indophil Resources NL February 2002 filename.cd

18
Indophil Section 04 14/3/02 5:46 PM Page 19

Magas Prospect

4. Exploration Overview
The Magas prospect is centred on a sub-circular feature termed the Magas Intrusive Complex with approximate dimensions of
2.5km north south and at least 1.5km east west (Figure 4.4a). The Complex is obscured by younger post-mineralisation cover to
the east. This prospect area is characterised by the extensive development of hydrothermal alteration associated with both
epithermal and porphyry copper style mineralisation. This alteration is the result of hot mineralising fluids permeating through
the host rocks.

Detailed mapping and channel sampling by Indophil has defined a north-northwest trending and structurally controlled
mineralised vein and stockwork zone termed the Magas Vein Zone (MVZ, Figure 4.4) previously intersected by WMCE drillhole
MNTD6. The MVZ has been the focus of a diamond drilling program by Indophil comprising 16 holes (MNTD7 to 22) for a total
of 2,830m (Figure 4.5) with holes initially drilled at 50m intervals along strike and later stepouts to the north at approximate
100m intervals.

Figure 4.5 Manat Project - Magas Prospect Drillhole Location Plan

D19

D20 ?
Drillhole Status:
Completed
2,0
00
mE
Surface Projection of
G)

(L
(L

G)
mN

Mineralised Alteration Zone

00
,0
51

Trace of Main Vein Zone

D18 D22 Splay Veins

Post Mineralisation Fault
D17 Road
G)
(L
N
700
50

D21
on
cti

?
Se

D13
Guindulman Ck.

D16

D15
G)
(L

1,0
00
0N

mE
(L
D12
50

G)
50
on
cti
Se

D11

D6/D10
1,5
00
mE
D7 (L
G)

D8
G)

D9
(L
N
00

G)
G)

(L
50
(L

N
N

Davaeno
0m

on

50
,5 0

Tunnel
cti

1
50

50
Se

Camp
on
cti
Se

ver
as Ri
Mag

0 100
D14
Metres
.
Ck
tian
Kai
G)
(L
N
0m
,0 0

Indophil Resources NL February 2002

50

19
Indophil Section 04 14/3/02 5:46 PM Page 20

Exploration drilling - Manat Project

Magas Prospect - cont’d.

Excluding drillhole MNTD14, which is a major 420m stepout along trend to the southeast, the MVZ has been defined by drilling
over a strike length of approximately 1000m and a vertical range of at least 350m, taking into account local topographic
variations. This drilling has produced encouraging results with all holes (except MNTD20 which is off trend) intersecting
significant gold-silver-lead-zinc vein and stockwork style epithermal mineralisation hosted by altered intrusive and volcanic rocks.
These altered host rocks form a wide (up to 80m) low-grade halo (usually 0.2g/t to 1.0g/t gold) to mineralised zones. Higher-
grade shoots of mineralisation appear to be located at the intersection of the MVZ and sets of northwest trending splay veins
although the current drilling pattern is not sufficiently dense to define the limits of such shoots with any confidence. Mineralised
and altered sections of all drillholes have been assayed for gold, silver, copper, lead and zinc by McPhar Geoservices in Manila, an
ISO9002 certificated laboratory. Audit assaying has also been undertaken in Australia which has verified the results with
acceptable variations.

Significant drillhole intersections for the MVZ calculated using a 1g/t gold cut-off and a 5m downhole intersection search distance,
are listed in Table 7.3 with a selection of the better intersections given in Table 4.3 below. Because of significant base metal
concentrations, especially zinc, gold equivalent grades were calculated for each intersection using nominated metal prices. Typical
assay cross sections are shown in Figure 4.6 and a longitudinal projection of the main vein in Figure 4.7. Because of their shallow
nature, drillhole intersections for the MVZ in MNTD15, 18 and 19 are largely oxidised and gossanous and are interpreted to have
been significantly depleted in base metal and gold values as a result of leaching. Consequently, higher grades are anticipated at
depth in proximity to these holes.

Table 4.3 Better Intersections for the Magas Vein System

Hole No. Depth Depth Interval Gold Silver Lead Zinc Gold
From (m) To (m) (m) (g/t) (g/t) (%) (%) Equiv. (g/t)

MNTD6 76.00 100.00 24.00 4.53 9.70 0.33 1.08 6.42

193.00 244.00 51.00 2.93 10.29 0.14 0.38 3.94
MNTD7 109.00 118.90 9.90 7.16 15.50 1.18 2.42 11.29
192.60 193.70 1.10 8.67 13.80 0.14 1.23 11.24
205.00 209.30 4.30 7.43 36.12 0.10 0.48 9.96
MNTD8 130.00 133.00 3.00 2.25 12.90 0.07 0.27 3.41
158.00 159.00 1.00 14.75 5.60 0.04 0.08 16.64
MNTD9 181.20 189.00 7.80 5.40 20.55 0.44 1.84 8.84
MNTD10 51.80 58.00 6.20 10.86 22.11 0.66 1.50 14.22
90.30 106.00 15.70 5.26 15.74 0.58 4.45 10.96
MNTD13 219.00 252.00 33.00 2.32 11.91 0.36 0.83 3.82
MNTD16 71.00 92.00 21.00 2.77 46.27 1.25 2.51 7.04
MNTD17 114.00 132.00 18.00 1.70 11.30 1.49 1.78 4.60
MNTD18 38.00 68.10 30.10 2.60 24.10 0.33 0.14 3.76
MNTD19 26.00 27.00 1.00 9.37 73.20 - - 11.73
MNTD21 117.00 133.30 16.30 2.75 53.20 1.74 2.85 7.86
MNTD22 66.90 154.00 87.10 0.90 10.17 0.25 0.33 1.70

Note: Intersection selection at 1g/t gold cut-off. Upper assay cuts of 50g/t gold and 100g/t silver applied. Gold equivalent grades are based on
the following 1 March 2001 NY (Au), Perth Mint (Ag) and LME (Cu, Pb, Zn) approximate cash metal prices: Gold US$297/oz, Silver
US$4.53/oz, Copper US$1,535/tonne, Lead US$482/tonne and Zinc US$785/tonne.

20
Indophil Section 04 14/3/02 5:46 PM Page 21

4. Exploration Overview
Figure 4.6 Manat Project - Magas Prospect Drill Sections

E E
Cross-Section 50150N (LG) MNT-D7
W Cross-Section 50200N (LG) MNT-D10
MNT-D6, MNT-D7 MNT-D10
800RL

W
2.65
8.55
10.33
8.02 10.86
0.60 6.20
10.00 MNT-D6 22.11
Projected from
50,200N (LG)
750RL
750RL
4.53
1.24 24.00 9.13, 0.78% Pb
6.10 9.70 7.60
16.19, 2.43% Zn 5.26
8.88 15.70
15.74 10.21, 0.91% Pb
3.00
7.16 15.97, 12.42% Zn
9.90
15.50
14.14, 2.44% Pb
3.30
25.54, 4.39% Zn
700RL
700RL
1.74
4.50
6.30 1.64
7.00
6.80

650RL 2.93
8.67 51.00 650RL
?
1.10 10.29
13.80
Low grade Mineralised
7.43
4.30
36.12
Zones 0.2 - 1.0 g/t Au
7.23, 0.44% Pb Mineralised
10.00
MNT-D6 11.38, 0.92% Zn
Zones > 1.00g/t Au
Projected to
50,100N (LG)
600RL
600RL
Au (g/t) Significant
Metre
?

EOH: 250m Ag (g/t) Intersection

1,200mE

1,150mE

1,200mE

EOH: 268.50m. * - Uncut

Cross-Section 50500N (LG) Cross-Section 50700N (LG)

MNT-D16 MNT-D21 MNT-D18 / MNT-D22
Fault E
Displacement MNT-D18 MNT-D22
MNT-D16 MNT-D21
W
W E

900RL
2.60
30.10 5.39
31.69 * 10.00
13.56
?

2.77, 1.25% Pb
21.00 Basement
52.54 *, 2.51% Zn
Sequence
3.54, 1.51% Pb 1.18
15.00 29.10
850RL 66.19. *, 3.01% Zn 900RL 9.01

EOH: EOH:
105.00m. 113.00 m. 0.99
6.00
2.75, 1.74% Pb 16.07
16.30
53.20 *, 2.85% Zn 1.71
9.00
3.47, 5.51% Pb 32.01
4.50
132.44 *, 8.23% Zn 1.50
5.00
800RL 850RL 12.18

EOH: 0.90
87.10
154.20 m. 10.17
EOH:
?

178.30 m.
?
?

0 20

750RL 800RL Metre

1,300mE

1,350mE

1,400mE

1,450mE

Indophil Resources NL February 2002

21
Indophil Section 04 14/3/02 5:46 PM Page 22

Indophil Geologist - George Moreno, channel sampling at Magas

Magas Prospect - cont’d.

Drilling of the MVZ is considered to be of sufficient density to estimate an inferred mineral resource (Table 4.4) based on a 1g/t
gold cut-off grade. Indophil’s methodology in deriving this estimate has been reviewed and described by the Independent
Geologist in Section 7. He has confirmed that the estimate satisfies JORC definitions. Given that the MVZ mineralised system has
a potential strike extent of 3.4km (Figure 4.4a & b) and is open at depth, this inferred mineral resource estimate has considerable
upside potential. Consequently, it is anticipated that further resource definition and delineation drilling will add considerably to
the current resource estimate.

Table 4.4 Magas Inferred Mineral Resource Estimate (JORC)

Resource Gold Silver Lead Zinc Gold Silver Lead Zinc
(tonnes) (g/t) (g/t) (%) (%) (ounces) (ounces) (t) (t)
3,066,000 2.76 17.78 0.60 1.20 272,000 1,753,000 18,278 36,843

Geological mapping, rock chip and channel sampling, grid-based soil sampling data and an induced polarisation (IP) geophysical survey
suggest that the structure hosting the MVZ can be traced discontinuously to Katungbuan Prospect located approximately 2km north-
northwest of the northernmost limit of drilling at Magas (Figure 4.4b). Post-mineralisation cover may explain part of this discontinuity.
WMCE drilled two diamond drillholes at Katungbuan intersecting narrow intervals of epithermal mineralisation including: MNTD4
with 4.8m at 2.76g/t gold and 4.72g/t silver from a depth of 90.2m and MNTD5 with 1.25m at 3.28g/t gold and 11.88g/t silver from a
depth of 51.8m.

In addition to mineralisation encountered in the MVZ, drillhole MNTD14, a 420m southeast stepout along strike from MNTD9,
intersected porphyry copper-gold style mineralisation over a 227m downhole interval assaying 0.19% copper and 0.30g/t gold
(Figures 4.4a, b & 4.5). An orientation IP traverse completed over this area defined a significant broad anomaly. Other holes at
Magas intersecting porphyry style stockwork mineralisation include MNTD7 with 107.5m at 0.20% copper and MNTD8 with 41m
at 0.22% copper.

Figure 4.7 Manat Project - Magas Prospect Longitudinal Projection - Magas Main Vein Zone
49600 N

50000 N

50500 N

51000 N

S Surface
D19 28.60/0.55
N
900 900
D18 30.10/2.60
D15 7.60/0.65 Limit of oxidation
D16 21.00/2.77 D22 29.10/1.18
Surface
Magas R.

800 D21 16.30/2.75 D17 18.00/1.70 800

ELEVATION (m)
?

D12 1.30/4.16
D14 D11 13/1.23 Untested Potential
Fault Disp

5.00/1.46 Untested Potential D10 15.27/5.26

700 D7 9.90/7.16 700

D8 8.00/1.49
lacement

D13 33.00/2.32
?

227m @ 0.30 g/t Au D9 7.80/5.40

0.19 % Cu
Untested Potential
D6 51.00/2.93
600 600
?

100 m
?

Untested Potential
500 500

D6 51.00/2.93
Outline of
Untested Potential
Drillhole No. Intersection (m) / Au g/t Resource Estimate

Note: Projection looking SW at 220°

Indophil Resources NL February 2002

22
Indophil Section 04 14/3/02 5:47 PM Page 23

4. Exploration Overview
High capacity man-portable DT500 Diamond drill rig at Manat

Taglayag Prospect the intersection of a major north-northwest trending

mineralised structure (Panuraon) that hosts the Panuraon
Taglayag is located immediately north of the Magas prospect
vein system and Samico gold pit and the west-northwest
on the northern margin of the Magas Intrusive Complex.
trending south dipping structure that hosts the high grade
WMCE drilled 3 diamond drillholes (MNTD1 to 3) at this
Nocnocan gold deposit (Figure 4.4b). The Nocnocan vein
prospect (Figure 4.4b) based on copper and gold anomalies
system is actively being worked by small-scale miners and is
in soils (Figure 7.2) and an IP anomaly. MNTD1 intersected
hosted by a geologically complex sequence of sedimentary
porphyry copper style mineralisation over a 174m interval
and volcanic rocks. Soil sampling at Pagtulian by WMCE and
assaying 0.16% copper and 0.22g/t gold, whilst MNTD2
Indophil has defined a number of prominent multi-element
(incomplete sampling) intersected 7m of epithermal
anomalies, often associated with significant areas of
stockwork veining assaying 1.15g/t gold, 20g/t silver and
hydrothermal alteration and small-scale gold mining activity.
1.83% zinc (4.49g/t gold equivalent).These results clearly
Geological mapping and limited rock chip and channel
support Indophil’s proposed follow-up exploration on
sampling has recorded significantly anomalous results
this prospect.
(Figure 7.3) associated with diverse styles of mineralisation
Pagtulian Prospect and alteration.The presence of limestone in this area
suggests potential for carbonate-replacement style
The Pagtulian prospect located in the northwest of the mineralisation.
project area approximately 4km from Magas, is situated near

Indophil geologist inspecting altered and mineralised outcrops at the Magas Prospect.
23
Indophil Section 04 14/3/02 5:47 PM Page 24
General scene - Labo Project
Labo
4.5.2 Labo Project
Highlights
Located in the Paracale gold district which has historical
production exceeding 5 million ozs of gold and significant
silver.
Indophil is a major tenement holder (29 sq km) and
explorer in the district.
Several styles of gold and base metal mineralisation occur
within and adjacent to the project area including vein and
lode style gold-base metal mineralisation, porphyry and
skarn associated copper-gold.
Four major soil gold anomalies on the De Jesus property
leading to encouraging trench results at the Pael and
Gaerlan prospects including 8m at 8.03g/t, 7m at 7.34g/t,
13m at 4.97g/t and 20m at 1.58g/t gold.
Encouraging gold intersections from a limited program
(11 drillholes) of diamond drilling at Pael and Gaerlan
including 5.99m at 4.87g/t gold and 8.24m at 2.61g/t gold.
Location and Infrastructure
The Labo Project is located in Camarines Norte Province,
southern Luzon near the town of Labo on the Manila-Legaspi
highway, 300km by road southeast of Manila.The project area
lies adjacent to Mt. Bagacay, an eroded stratavolcano with a
maximum elevation of 775m and is characterised by rolling
topography with coconut plantations and some secondary
regrowth forest. The district has had a long history of mining
activity dating back to pre-Spanish times.
Tenure
The project area covers 28.73 sq km and comprises separate
agreements over two adjacent properties, De Jesus and
Palado, collectively referred to as the Labo Project (Figures
4.8 and 4.9).The De Jesus property is an approved MPSA
covering an area of 9.95 sq km. Indophil has exercised an
option agreement with Jericho Mining over this property and
24
is paying advance royalties on future production.The Palado
agreement is an option over a MPSA application of 18.78 sq
km which is in the final stages of the approval process.
Some delays have been experienced pending the formal
annulment of a previous operating agreement.
Regional Geology and Mineralisation
The project is located within the Paracale gold district of
Camarines Norte Province, which has historically produced
in excess of 5 million ounces of gold and significant silver,
mainly from epithermal quartz veins spatially associated with
the Paracale Granodiorite (Figure 4.8). The district is also
noted for a number of prominent magnetite skarns, some of
which were mined in the past for iron ore, as well as a
number of sub-economic porphyry copper deposits and
occurrences. Several of the skarns are anomalous in copper
and gold. The Company’s exploration is being directed
towards diverse styles of mineralisation including bulk
tonnage (open pit) gold mineralisation, high-grade gold-base
metal vein systems and porphyry and skarn related copper-
gold mineralisation.
Exploration Activity
Indophil has undertaken reconnaissance geological and
stream-sediment geochemical exploration over the project
area resulting in the definition of a number of anomalies for
gold, copper, lead, zinc and arsenic (an important indicator
element for gold). Some of these anomalies are associated
with areas of small-scale mining activity. These data have
been interpreted together with other historical exploration
data, to generate prospects for detailed grid-based
exploration (Figure 4.9). Detailed grid-based exploration
activity on the Labo Project to date, has been exclusively
directed towards the De Jesus property, pending approval of
the Palado MPSA application.
Labo-De Jesus Property (Indophil 100%)
This property is mainly underlain by sediments with minor
volcanic rocks. Small diorite bodies intrude these rock units
with some development of skarn-associated mineralisation at
or near the contact with the sediments.
Indophil Section 04 14/3/02 5:47 PM Page 25

4. Exploration Overview
Exploration Manager Alan Buenavista channel sampling at the Malacbang Prospect

Figure 4.8 Labo Project - Paracale Gold District. Geology Mineral Deposits and Project location

LUZON
LUZON

MAP AREA 122º40'E 122º45'E 122º50'E

Gumaus
Bay

Jose La Suerte
Panganiban
Larap Paracale Longos
Larap
Bay PARACALE
Matanlang GRANDIORITE

Paracale
Nacionale
14º15'N 14º15'N
TABAS
DIORITE

UNIVERSAL FM Nico Agusan Tabas

v
v v v
Labo-Palado
v v v
Labo River
v v
Exiban
v

Labo-DeJesus
BOSIGON FM
v v
0 5km Labo v
v v v v
Malay v v v v
v v v v v Daet
Nalesbitan v v v v v
Mabilo v v v v v v v

Indophil Resources NL February 2002 (S ource: Modified from UNDP 1987 a nd P IM ma pping )

Alluvium Schist, amphibolite

v v Labo Volcanics Ultramafic
v v Bagacay Andesite Paracale Granodiorite
Diorite
Tamisan Mudstone Deposits / Prospects
Larap Volcanics Epithermal gold
Universal Formation Porphyry Cu-Mo
Bosigon Formation Fe Skarn
25
Indophil Section 04 14/3/02 5:47 PM Page 26

Labo
Figure 4.9 Labo Project - Geological Interpretation and Key Prospects

Mampongo

Pinagbirayan

Tabas

Malapinggan

Dalnac
300 Awitan
ppb
Soil
Au

Malacbang
PALADO

Mahawanhawan

Fundado

Sta. Ana
Talubatib
Cabusay

Masalong

LABO

De JESUS
(see Figure 4.10
for prospect areas) Dalas

Prospect areas for

grid based exploration
0 1.5
Stream Sediments
> 290 ppb Gold Kilometres

Alluvium (Q) Larap Volcanics (OI)

Labo Volcanics (Q) Universal Fm. (P)
Andesite Porphyry (PL) Bosigon Fm. (UC)
Bagacay Andesite Basement Schist (C)
Tabas Diorite (M) Ultramafic Complex (C)
Paracale Granodiorite
Indophil Resources NL February 2002

26
Indophil Section 04 14/3/02 5:47 PM Page 27

The property has been the subject of previous exploration Mayaman Prospect

by several companies, all directed at different targets and
diverse styles of mineralisation. Exploration by these
companies culminated in limited programs of shallow
diamond drilling resulting in several significantly anomalous
intersections (see Table 7.5).
The Indophil reconnaissance stream-sediment survey
highlighted the De Jesus property as being an area of highly
anomalous gold, copper and arsenic with peak values of
8.11g/t, 2960ppm, and 600ppm respectively.The Company
has completed a detailed grid-based 200m by 20m soil
sampling survey and associated geological mapping over
approximately 60% of the MPSA area. This survey defined
four major gold anomalies at a threshold of 100ppb (0.1g/t)
gold: Pael, Eko, Gaerlan and Mayaman (Figure 4.10). These
prospects were the focus of detailed geological mapping and
associated trench and channel sampling by Indophil to assist
in the siting of a limited program of shallow diamond drilling
comprising 11 holes for a total of 1028.40m at the Pael and
Gaerlan prospects.Table 7.5 and the descriptions below
records significant intersections from this drilling program.
Pael Prospect
This prospect is an east-west trending coincident gold-
arsenic soil geochemical anomaly that can be traced over a
strike length of 1200m. The anomaly is related to sub-
parallel and steep dipping but narrow veins, shears and
stockwork zones with associated alteration of the host
sediments. Detailed mapping and sampling over the western
half of the anomaly has defined discontinuous mineralised
zones over at least 600m, with soil geochemistry and
outcrops of silica alteration supporting an additional 600m
strike extent. The results of surface trench and channel
sampling of the mineralised zones for gold over the western
half of the anomaly were encouraging and included
intersections of 8m at 8.03 g/t, 7m at 7.34 g/t, 5m at 5.63g/t,
4m at 6.15g/t, 13m at 4.97 g/t and 8m at 4.28g/t gold.
Indophil has completed 7 shallow diamond drillholes
(LABD1 to 4 and LABD9 to 11) at this prospect for a total
of 544.7m, with the best results being 11.50m at 1.87g/t gold
in LABD1 and 5.99m at 4.87g/t gold in an adjacent hole,
LABD10 (Figure 4.11). A program of shallow reverse
circulation (RC) drilling is planned to enable better definition
of the mineralised zones.
4. Exploration Overview
Mayaman is a former Goldfields Asia prospect where a small
program of 6 shallow diamond drillholes in proximity to an
old Philippines Iron Mines’ open pit recorded anomalous
values of gold and copper in association with gossanous and
skarn-altered sediments.The soil-sampling survey carried out
by the Company defined a 300m by 200m gold anomaly near
coincident with a large copper anomaly. Detailed mapping
and sampling of this prospect area has been undertaken with
gold anomalous trench results including 14m at 0.95g/t, 20m
at 0.62g/t and 13m at 0.42g/t gold along strike from the area
of the Goldfields Asia drilling.The Company proposes to
carry out further drilling of this prospect.
Eko Prospect
This prospect is a large west-northwest trending soil gold
anomaly covering an area of 600m by 300m that has some
coincident arsenic anomalism. These anomalies are spatially
associated with prominent outcrops of silica alteration
similar to those at the eastern end of the Pael anomaly.
Limited trenching marginal to the areas of silicification has
produced anomalous gold results worthy of drill follow-up.
Labo-Palado Property
(Indophil 100% on tenement approval)
An integration of Indophil reconnaissance exploration data
with other historical exploration data has resulted in the
definition of several prospect areas for diverse styles of
mineralisation namely Tabas, Malacbang, Mahawanhawan and
Cabusay (Santa Ana) (Figure 4.9). Grid-based exploration
will commence on these prospects once the MPSA is
formally granted. The results of previous exploration activity
including limited work by Indophil, are described by the
Independent Geologist in Section 7.

Gaerlan Prospect
The 600m by 300m Gaerlan soil gold anomaly is associated
with a zone of north-northwest trending veins, stockwork
zones and shears hosted by variably altered sediments.
Detailed geological mapping and associated trench and
surface channel sampling recorded encouraging results for
gold, including 20m at 1.58g/t. Indophil has completed a small
program of shallow diamond drilling comprising 4 holes
(LABD5 to 8) for a total of 483.7m. All four holes
intersected sediment-hosted gold mineralisation (Table 7.5)
including 8.24m at 2.61g/t in LABD7. A single drillhole at this
prospect by a previous explorer intersected 4m at 4.57g/t
gold and 28.3g/t silver associated with gossanous ironstone.
RC drilling is planned to delineate mineralised zones.
Indophil’s Managing Director,Tony Robbins, inspecting small scale mine
workings in the Paracale district.
27
Indophil Section 04 14/3/02 5:47 PM Page 28

Labo
Figure 4.10 Labo Project (De Jesus) - Soil Anomalies and Drillhole Location

Masalong

Masalong 0 500
Munti
METRES
A1 Tiong
Buki

A2 D1
Pael
D11 Eko
D9 D10
D2 D3
A3
D4 Roa
d
G5/6

A7
G3 Mayaman
G1
G2 G4 A4/6
A5
Villamin

Labo

D8
Gaerlan D5
D6
D7 G7

iver
Labo R

Dalas

Drillhole (Prefix)
>= 100 ppb
Strong Soil Au Anomaly D - Indophil (LABD)

Clay-Silica Stockwork G - Goldfields (MDGF)

Zone/Outcrop
Soil Grid A - Avantgarde (LG)

Indophil Resources NL February 2002

28
Indophil Section 04 14/3/02 5:47 PM Page 29

4. Exploration Overview
Figure 4.11 Labo Project (De Jesus) / Pael Prospect - Stacked Sections of LAB-D1, LAB-D9 & LAB-D10

S
LAB-D9 N
2.66
1.71
18.57
20 RL
1,565,715N

1,565,865N
EOH: 54.10m.

7.34
7.00
1.04
LAB-D1

7.17
1.00
-0.5

2.35
1.50
0.70
3.16
5.90
20 RL 2.62

1.87
11.50
9.13

1.96
0.20
Au (g/t) Significant 58.7
Metre
Ag (g/t) Intersection
1,565,715N

1,565,865N

Mineralised Zones

EOH: 89.90m

LAB-D10

0 20

4.87
5.99 METRES
16.61

20 RL
2.02
0.32
1,565,715

15.40
EOH: 61.90m
Indophil Resources NL February 2002

29
Indophil Section 04 14/3/02 5:47 PM Page 30

Bunawan
4.5.3 Bunawan Project (Indophil 100% interest on
tenement approval and exercise of option)
Highlights
Located in the prospective eastern Mindanao volcanic arc
5km south of the Co-O, (Banahaw) epithermal gold deposit.
The project area has a history of significant small-scale
gold mining activity.
Regional Geology and Mineralisation
The project area is strategically located proximal to a splay
off the Philippine Fault Zone and within a recognised
volcanic arc that includes the Co-O and Diwalwal high-grade
gold deposits.The latter has an estimated pre-mined
endowment (historical production + resources) of 7 million
ounces of gold. The epithermal Co-O gold deposit is located
only 5 km from the northern boundary of the MPSA
application.

Exploration by Indophil has produced very encouraging Exploration Activity

stream-sediment gold anomalies correlating with The tenement block covers sediments and volcanic rocks
extensive areas of hydrothermal alteration and associated intruded by porphyries.There are a number of prominent
gold mineralised veining. structural features, including an interpreted caldera structure
2km in diameter (Figure 4.12). Several areas of small-scale
Geological environment and anomalous geochemistry
mining activity are located within the claim block focused
implies excellent potential for the discovery of vein and
on narrow but high-grade gold-bearing quartz vein arrays
disseminated style gold mineralisation.
associated with pervasive zones of hydrothermal alteration.
Grid based exploration is expected to define attractive
Indophil has completed reconnaissance stream-sediment
drilling targets within one year of title approval.
sampling and geological mapping over the project area
resulting in the definition of a number of highly anomalous
catchments for gold in close spatial association with large
Location and Infrastructure areas of significant hydrothermal alteration. A total of 204
stream-sediment samples were collected of which 32
The Bunawan Project is located in Agusan Del Sur Province,
contained greater than 1g/t gold with a peak value of 9.01g/t
eastern Mindanao immediately adjacent to the all weather
gold.These data are regarded as highly anomalous and
sealed highway that links Davao City with northern
indicative of significant mineralisation potential.The two
Mindanao (Figure 4.12).The project area is generally rolling
most significant anomalies at Away and Singanan will be the
topography and is accessed by former logging tracks and
subject of initial grid-based exploration once title is granted.
trails.There are minor areas of secondary forest regrowth
The Company believes that attractive drill targets will be
within the area. Part of the tenement area is covered by the
defined within one year of commencing grid-based
PICOP Forest Reservation for plantation timber.
exploration once title has been granted.
Tenure
Indophil has an option to purchase agreement with Camarin
Mining Corporation (CMC) over the 24.3 sq km Bunawan
MPSA application. The MPSA application is the subject of a
protracted title dispute with three other parties. However,
with Indophil’s assistance, CMC has won all cases before the
appropriate Regional Panel of Arbitration.These decisions
have been appealed to the Mines Adjudication Board (MAB)
in Manila where the Company remains hopeful of a
successful outcome. Details are provided in Section 8.3.

30
Indophil Section 04 14/3/02 5:47 PM Page 31

4. Exploration Overview
Figure 4.12 Bunawan Project Geology and Stream Sediment Anomalies

SAMAR

LEYTE
10N

PROJECT 0 1
AREA
KILOMETRES

120E

Interpreted caldera
structure
Ro
ad

1 m.
Singanan 389
TANDAWAN- PINAYONGANG BATO
SINGANAN
SINGANAN
VEIN ZONE
1 m.

2.5 m.
?

1.4m.
?

CURATO ?
2 m. AWAY
TANDAWAN ?
Butu

1.5 m.
an C
ity

2 m. 2 m.
0.60 m.
?

Sn. Andres 6 m.
2 m.
Bgy. San Andres
?
Davao City

APSA-090-X

109

Sediments Andesite Porphyry Veins

Andesite Lava
Dacite Porphyry and Pyroclastics Active Mine

Dacite Porphyry Pyroclastics, Strong Hydrothermal Alteration Inactive Mine

Some Lava

Stream Sediments Interpreted fault

> 200 ppb Gold

Indophil Resources NL February 2002

31
Indophil Section 04 14/3/02 5:47 PM Page 32

Hinotongan
4.5.4 Hinotongan Project (Indophil earning to 65%)
Highlights
Strong geological analogies with the world-class Tampakan
copper-gold deposit located in southern Mindanao.
Association with the Philippines National Oil Company
and in close proximity to their Palimpinon geothermal
power station.
Outcropping copper mineralisation associated with
siliceous breccias and major structures.
Early exploration drilling planned.
Location and Infrastructure
The Hinotongan Project is located in southeast Negros,
province of Negros Oriental (Figure 2.1) and lies within the
Palimpinon geothermal reservation of the Philippine National
Oil Company (PNOC).The project area is centred
approximately 17km west-northwest of the coastal city of
Dumaguete and is accessed by all weather sealed and gravel
roads over a total distance of 50km. Local topography is
rugged and dominated by the dormant 1768m high
Mt Guinsayawan volcano. Access within the project area
is by old logging roads and trails.
The Hinotongan prospect lies within a regional resistivity
anomaly at the intersection of prominent northwest and
northeast trending structures, both of which are associated
with extensive areas of hydrothermal alteration (Figure
4.13). Local topographic relief at Hinotongan varies by as
much as 400m to 500m and the extensive alteration shows
topographic variations from an upper leached cap to a lower
massive silica and silica-breccia zone.
A program of reconnaissance stream-sediment geochemistry
by WMCE defined several anomalies for copper and
associated elements within the Hinotongan and Pulang Tubig
River catchments. Subsequent exploration by Indophil within
these catchments including geological mapping, infill stream
sediment sampling, base of slope and some ridge and spur
soil sampling, highlighted a number of coherent copper and
arsenic anomalies strongly clustered in the headwaters of
the Hinotongan River. These anomalies lie on the west-
northwest trending Hinotongan structure in close spatial
proximity with altered and well preserved volcanic cones.
The anomalous area contains outcrops of silica and silicified
breccia with disseminated copper mineralisation.
The Company plans to carry out a program of orientation
geophysics to optimise drill hole locations for an early
exploration diamond drilling program.

Tenure
Indophil has signed a Letter of Understanding for a farm-in,
and joint venture arrangement with PNOC over the
approved Hinotongan exploration permit (EP). The EP was
granted in 1997 and with statutory reductions now covers
an area of 89.69 sq km (Figure 4.13). The agreement allows
Indophil to earn 65% equity in the project after sole funding
US$2million on exploration (See Section 8.3).

Exploration Activity
Because of strong similarities in the geological environment
to the major Tampakan copper-gold deposit in southern
Mindanao (see Section 7), Indophil’s exploration at
Hinotongan is being directed towards the discovery of a
major disseminated copper-gold resource.
Hydrothermally altered volcanic cone on the Hinotongan River with an
associated vegetation anomaly.

32
Indophil Section 04 14/3/02 5:47 PM Page 33

4. Exploration Overview
Figure 4.13 Hinotongan Project - Comparison of Hinotongan and Tampakan Geology

Breccia with anomalous HINOTONGAN

lan
Au, As, Bi, Hg, Sb Latest andesite

Am
BCI Sulfur volcanics
Prospect Strong hydrothermal
alteration, mainly
EXP-006-97 NOR Boundary acid sulphate
Chlorite-epidote-calcite
alteration
Guintabon
Dome
Altered Pliocene
Hi
no volcanic cones
to Mt. Guinsayawan
ng
an Volcano Outcropping mineralization
Grey silica breccia Qtz. Stringer in argillic Faults
with anomalous alteration w/ up to 3.00 g/t Au
Cu values
Malabo

0 3

Okoy KILOMETRES
Palimpinon
Geothermal
Dobdob Field

SAMAR

LEYTE
10N

Hinotongan

MAP AREA
Tampakan
120E

TAMPAKAN
Recent andesite
pyroclastics
Dacite lavas, domes

Hornblende diorite
Advanced argillic
alteration
Outcropping mineralization
(Modified from Projection of Tampakan
Balkau J., et al., Cu-Au deposit
1998) Mt. Matutum
Volcano Faults
Indophil Resources NL February 2002

33
Indophil Section 04 14/3/02 5:47 PM Page 34
General scene - Southern Leyte
4.5.5 Leyte Project
Highlights
Strong geological similarities to the Surigao gold district in
northeast Mindanao where the discovery of the Boyongan
porphyry copper-gold deposit was recently announced .
Drill indicated copper-lead-zinc-gold-silver resource at the
Pandan prospect of 1.334 million tonnes at 0.49% copper,
1.17% lead, 2.26% zinc, 0.48g/t gold and 9.63g/t silver (non
JORC)
Early encouragement from Indophil exploration on the
St Bernard tenement with gold anomalous (peak 18.1 g/t)
stream-sediment catchments associated with a 3 sq km
area of advanced-argillic alteration.
Location and Infrastructure
The Leyte project comprises two geographically separate
tenement groups in southern Leyte, St. Bernard and the
Sogod Joint Venture (Figure 4.14). Both lie in close proximity
to the coast and to sizeable towns with reasonable
infrastructure and both are accessed by all weather sealed
and gravel roads.
Tenure
At St Bernard, Indophil has exercised an option agreement
with Caraga Golden Triangle over a recently approved MPSA
covering an area of 8.91 sq km.At Sogod, Indophil has
entered into a Heads of Agreement with two separate but
related parties for a farmin and joint venture arrangement
over a neighbouring MPSA application and EP application
covering a total area of 229.23 sq km. Indophil can earn a
50% interest by sole funding the first $320,000 of exploration
expenditure on these tenements. The MPSA is at an advanced
stage of area clearance by the regional office of the MGB.
Regional Geology and Mineralisation
Both properties lie within the Philippine Fault Zone (Figure
4.14). Indophil has long recognised the similarities of geology
and prospectivity between this part of southern Leyte and the
Surigao gold district in northeast Mindanao. The Surigao gold
district is one of the Philippines historically important gold
districts and has recently attracted special interest because of
a major new porphyry copper-gold discovery at Boyongan.
Southern Leyte is considerably under-explored when
compared to the Surigao district.
34
St Bernard (Indophil 100%)
The St Bernard MPSA covers volcanic rocks and associated
sediments in close proximity to one of the major north-
northwest trending structures that comprise the Philippines
Fault Zone (Figure 4.14). Several areas of small-scale mining
activity for bedrock and alluvial gold are present within the
project area.
A program of reconnaissance stream-sediment sampling and
geological mapping by Indophil has produced encouraging
results with 10 of the 35 stream-sediment samples collected
returning values of greater than 500ppb gold (0.5g/t gold)
and a peak value of 18.1g/t gold. Follow-up geological
mapping has defined the source of these stream-sediment
anomalies as an approximate 3 sq km area of hydrothermal
alteration, which may be associated with epithermal gold
mineralisation. A follow-up program of detailed stream-
sediment sampling has recently been completed over the
area of alteration defining coherent gold anomalous
catchments with some arsenic anomalism (Figure 7.7) This
area was the subject of a recent 80m x 200m grid-based
exploration program including geological mapping and soil
sampling. Mapping defined three areas of intense silica-clay-
pyrite alteration, one of which appears associated with a
breccia pipe. Soil and rock samples are awaiting analysis.
Sogod Joint Venture
(Earning to 50% on tenement approval)
The two tenement applications comprising the Sogod Joint
Venture straddle the Philippines Fault Zone and are mainly
underlain by volcanics, sediments and intrusive rocks
(Figure 4.14).Two prospects Pandan and Mahaplag defined by
previous explorers, will be the subject of early follow-up
investigations by Indophil once the tenements are approved.
Both contain extensive areas of hydrothermal alteration
Pandan Prospect
The Pandan prospect (Figure 7.8) located within the MPSA
application near the town of Sogod, was the subject of an
intensive exploration program by a previous explorer in the
early 1970s. This work included grid-based multi-element
soil geochemical sampling, induced polarisation, ground
magnetic surveys and a program of 28 diamond drillholes for
a total of 4574m. Geological mapping defined several areas of
intense silicification and sulphide-rich boulders with
anomalous base metal values. Some of the drillholes are
reported to have encountered significant zones of
polymetallic mineralisation with sufficient continuity to
estimate a drill-indicated mineral resource of 1.334 million
tonnes at 0.49% copper, 1.17% lead, 2.26% zinc, 0.48g/t gold
and 9.63g/t silver (assumed non JORC).
Mahaplag Prospect
Significant hydrothermal alteration of host andesitic volcanics
is present in the Himbabaguan River catchment area within
the EP application near the town of Mahaplag. Previous
detailed grid-based exploration of this area in the late 1980s
produced several coherent soil gold and silver anomalies that
were not drilled.
Indophil Section 04 14/3/02 5:48 PM Page 35

Leyte

4. Exploration Overview
Figure 4.14 Southern Leyte - Schematic Geology and Indophil Exploration Projects

Sogod
EPA

Sogod
APSA St.Bernard MPSA

SAMAR

LEYTE

MAP AREA
Digital Mosaic Image
JERS-1 SAR

Inihian

Recent limestone, sediments

Mahaplag V V Quaternary volcanics
+ Miocene diorite
Miocene volcanics
+
PH

+ Mid-Miocene limestone
Mapatong +
ILIP

Layog Oligocene sediments

Pandan
PIN

Pre-Miocene diorite
Sogod
Paleocene volcanics / sediments
E

Ultramafics / ophiolitic rocks

FAU

V
V V
V V V
V V V Prospect
LT

V
V V V
APSA - Application for a Production Sharing Agreement

0 20km

Indophil Resources NL February 2002

35
Indophil Section 04 14/3/02 5:48 PM Page 36

General scene - Northern Sierra Madre Project

Northern
4.5.6 Northern Sierra Madre (NSM) Project - Exploration Activity
(Indophil 100% on tenement approval) The project area is underlain by a magmatic arc sequence
comprising volcanic rocks intruded by a series of diorite to
Highlights
granodiorite intrusives. Geologically, this magmatic arc
Strong geological similarities with the mineralised Central shows strong similarities to the magmatic arc that forms the
Cordillera in Luzon which hosts several major ore Central Cordillera of Luzon which hosts a number of major
deposits including the Antamok and Acupan gold deposits epithermal gold and porphyry copper-gold deposits in the
at Baguio and the Lepanto, Lepanto-Far Southeast and Baguio and Mankayan mineral districts. As such, the NSM
Victoria deposits of the Mankayan Mineral District. project has high prospectivity for the discovery of major
porphyry copper-gold and related epithermal gold systems.
Large areas of hydrothermal alteration associated with Indophil’s focus will be on exploration for porphyry copper-
stream sediment anomalies for copper and associated gold systems possibly in joint venture with a major resources
elements.
company.
Several occurrences of porphyry copper style stockwork
A number of copper and arsenic anomalies have been
mineralisation located during low density Government
defined by an earlier Government low-density stream
surveys.
sediment survey that did not include analysis for gold.
Geological mapping at that time located a number of
“porphyry type” stockwork occurrences. Limited helicopter
Location and Infrastructure supported reconnaissance by Indophil over the project area
has located several large areas of hydrothermal alteration
The NSM project area is located in the far north and on the
that require priority follow-up.
western flank of the Sierra Madre Range that extends along
the eastern margin of Luzon (Figure 2.1).The project area
straddles the provincial boundary between Cagayan and
Isabela and is centred 30km due east of the regional city of
Tuguegarao (Figure 4.15). Access to Tuguegarao from Manila
is by a major sealed all weather highway and to the project
area by a number of municipal roads.The project area is
characterised by rugged topography with little habitation and
consequently access within the area is via trails only.

Tenure
The NSM project comprises four EP applications totalling
588.87 sq km in two separate blocks.The tenement approval
process, including Memoranda of Agreement with Indigenous
Peoples, is well advanced and it is anticipated that the two
northernmost EPs will be approved shortly.

36
Indophil Section 04 14/3/02 5:48 PM Page 37

4. Exploration Overview
Sierra Madre
Figure 4.15 Northern Sierra Madre Project, Luzon. Geology, Mineral Occurrences,
Geochemical Anomalies and Indophil Tenement Applications

121º45E 122º00E 122º15E

EPA
V
54 Philippine Sea 17º45N

O V
Tu g V Ila
P u e g a ra o R
ngR
. .
V
V
O
V

Tuguegarao V EPA 1 2
M V 53
V
O V
P CAGAYAN PROVINCE
V Mt Dos Cuernos ISABELA PROVINCE
V V
17º30N Pin
M ac
V an
au
R.

an
n

R.
aya

Philippine Sea
un
kat

P
EPA-52
Di

3
M

P
O
Caga

Tim R. P Sediments (Pliocene)

uai can
yan

nR n ra Mt Cresta M Sediments (Miocene)

. Bi
R.

{
V Limestone
17º15N
M Sediments
V V V V Basalt
OLIGOCENE

P O
V EPA Granodiorite, diorite
55 Dacite
V Andesite, basalt
V
Ilagan Volcanic sediments
V
R. Ultramafic
a n
V 4 Abu Indophil JV tenements
P 6 RP-Japan stream sediment
MAP AREA 5 Cu anomaly 70-520ppm
LUZON
LUZON Cu occurrence table 7 Cu occurrence (see table)
1. Casablangan EPA Significant hydrothermal
2. Dinacdacan 55 alteration
17º00N 3. Bolos River
4. Ilagan
5. Menuma 0 10 20km
6. Siagot
121º45E
7. Isabela
Indophil Resources NL February 2002 (Source: Modified from RP-Japan Report)

37
Indophil Section 04 14/3/02 5:48 PM Page 38

Copper-stained massive sulphide outcrop - Bangan Prospect, Buda

Buda
4.5.7 Buda Project (Indophil 100% on tenement approval)

Highlights
Located on the interpreted continuation of the volcanic
arc segment that hosts the Tampakan copper-gold deposit
in southern Mindanao.
Several geochemical anomalies for gold and the presence
of small-scale gold mining activities.
Highly anomalous channel sampling of outcropping
massive sulphides by Indophil at the Bangan prospect
returned 5.8m at 31g/t gold, 80g/t silver and 1.05%
copper.
Potential for the discovery of several styles of copper and
gold mineralisation including porphyry copper-gold and
volcanic hosted base metal mineralisation.
Exploration Activity
Initial reconnaissance exploration by a previous explorer,
including stream sediment geochemistry and geological
reconnaissance, focused on areas of recent small-scale mining
activity to locate the source of alluvial and colluvial gold.
This work has been limited to a very small part (15%) of the
area. At Bangan, a massive sulphide outcrop is associated
with a major fault zone and brecciated ultramafic lithologies.
Channel sampling of this outcrop by Indophil returned
5.8m at 31g/t gold, 80g/t silver and 1.05% copper from three
adjacent samples. The Buda project area has potential for
the discovery of porphyry copper-gold and related styles
of mineralisation, including base metal rich massive sulphides.
Reconnaissance exploration programs are planned once
title is obtained with grid-based exploration initially focussed
at Bangan.

Location and Infrastructure

The Buda project is located in the Central Mindanao
Cordillera (Figure 4.16) and straddles several provincial and
administrative boundaries. Access to the southern part of
the project area from Davao City is by a good all weather
road and within the project area by several municipal roads,
old logging roads or walking trails.

Tenure
The Buda project currently comprises three EP applications
totalling 417.74 sq. km. The tenement approval process on
the most northerly of the EP applications is well advanced
and agreements are in place with the local community.

Regional Geology and Mineralisation

The Central Mindanao Cordillera, within which the project
area lies, forms part of the Sangihe Volcanic Arc that trends
northwards from Sulawesi in Indonesia through central and
eastern Mindanao. This arc contains the Tampakan copper-
gold deposit in southern Mindanao and the Minahasa and
Awak-Mas gold deposits in Indonesia. It also hosts several
Helicopter assisted reconnaissance at Buda.
porphyry copper deposits in northern Sulawesi.

38
Indophil Section 04 14/3/02 5:48 PM Page 39

4. Exploration Overview
Figure 4.16 Buda Project, Mindanao. Geology, Prospects and Indophil Tenement Applications

to Davao
to del Norte
Cagayan
de Oro

7º50'N

Tagbiga

Dao

Kaulangoan Palacpacan
Mt. Kitanlad
Nature Reserve

?
Guidangol Iglogsad EPA
?
?

Dilapa Lubang EPA

Bangan

.
Sanguiapo
ao R
Dav

Limestone
Kabalansian Sediments
Andesite
Silanganan EPA Gabbro
Ultramafic
Alluvial gold areas
Cu-Au prospects
Thrust fault
7º30'

0 10

Kilometres

to
Davao
MAP AREA
125º10'E

Indophil Resources NL February 2002 MINDANAO

Tampakan
Tampakan

39
 Indophil Section 05 14/3/02 5:45 PM Page 1

1
5. Directors, Management and Corporate Governance
Indophil Section 05 14/3/02 5:45 PM Page 40
5 Directors, Management and Corporate
Governance
5.1 Board of Directors
R Bryan Davis BSc (Tech) FAusIMM MAICD
(Chairman – Non Executive) Age - 59 years
Bryan Davis is a mining engineer with more than 35 years
experience in the industry and was appointed Chairman of
Indophil in November 2000. He worked for the CRA group
(now Rio Tinto) from 1965 to 1987 holding senior positions
of Manager Mining Zinc Corporation/New Broken Hill
Consolidated Mines, Manager Technology and Development
and General Manager of the CSA Mine at Cobar. He then
joined the Australian Consolidated Minerals Group holding
the positions of General Manager Mining and Executive
Director (ACM Gold Limited). In 1991 he joined Pasminco
Limited assuming executive responsibility for base metal
mines throughout Australia becoming Executive Director
Mining in 1995 before retiring in 1999. He is currently a
Non-Executive Director of Coal and Allied Industries
Limited and Newcrest Mining Limited.
Tony Robbins BSc (Hons) MSc MAusIMM
MIMM (Managing Director) Age - 58 years
Tony Robbins is a geologist/geochemist with 35 years
experience in mineral exploration mainly with WMC Limited
where he held a number of senior and executive positions
including Senior Geochemist, Chief Geochemist, Operations
Manager, Exploration Manager Eastern Australia and
Exploration Manager South-East Asia Pacific Region. In the
last position he managed the exploration program in the
Philippines and led the team that made the discovery of the
Tampakan copper-gold ore deposit. He had been previously
involved in the discovery of the Edwin nickel deposit, the
Benambra copper deposit, Olympic Dam, and the Yandan,
Redeemer and Junction gold deposits. He has taught and
published on the subject of exploration geochemistry, and
exploration opportunities in South-East Asia, and has
represented the Philippines on a United Nations project.
Tony lives in the Philippines and is President of the Philippine
Mineral Exploration Association and is also on the Board of
the Philippines Chamber of Mines.
L to R: Hayden Barry, Tony Robbins, Bryan Davis, Kevin Robinson, Chris Middleton.
40
Chris Middleton BSc MSc FAusIMM
(Director of Exploration) Age - 54 years
Chris Middleton is a geologist with over 30 years experience
in the resources sector, mainly with WMC Limited. Whilst
with WMC he held a number of senior and executive staff
positions including Senior Mine Geologist Kambalda, Chief
Geologist and Exploration Manager Brazil, Assistant Chief
Scientist Exploration Division, Exploration Manager
Western Pacific, Exploration Manager Eastern Australia and
Manager Geology for the Exploration Division. During that
time he made a significant contribution to the discovery of
several mineral deposits including the Foster and Edwin
nickel deposits at Kambalda, the Ernest Henry copper gold
deposit in Queensland and the Jenipapo gold deposit in
Brazil. In December 1996 he co-founded Indophil with Tony
Robbins and served as General Manager Exploration until
May 1999 when he was appointed Director of Exploration.
Kevin Robinson BSc (Hons) ASIA MAusIMM
(Non Executive) Age - 43 years
Kevin Robinson was appointed a Director of the Company
in 1997. He has over 19 years experience in the mining and
investment industries. Kevin is a geologist by training and has
held technical and investment positions with RGC,
Normandy Mining Limited, Devex Limited, Prudential
Assurance and Legal & General. He is an Executive Director
of Selection (LSG) Management Pty Ltd, the Manager of
Lion Selection Group Limited, and a Non-Executive Director
of Lafayette Mining Limited and Sedimentary Holdings NL.
5.2 MIM Holdings Limited
MIM Holdings Limited has the right to have a nominee
appointed as a Director to the Board of the Company
(see Section 9.5.5). MIM Holdings Limited has confirmed
that they do not intend to exercise their right before
completion of this Offer.
Indophil Section 05 14/3/02 5:45 PM Page 41
5.3 Company Secretary
Hayden Barry BA FCIS FAICDDip ACMA
CPA Age – 60 years
Hayden Barry has 35 years international business
experience, including nine years as director and company
secretary for eight Australian publicly listed mining and
exploration companies between 1988 and 1997.
5.4 Exploration Manager Philippines
Alan Buenavista BSc – Age 41 years
Alan Buenavista, an experienced, respected and successful
geologist, is Indophil’s Exploration Manager in the Philippines.
He graduated from Adamson University in 1982, under a
Bureau of Mines scholarship. Following a year with the
Bureau working in Cebu, he was assigned to the Philippines
Bureau of Mines – United Nations Development Program
under Dr. A H G Mitchell. He worked on this program for
four years and gained experience in the major mining and
geothermal districts of the Philippines. He joined WMC in
1987 as their first Philippine employee and was promoted to
Senior Exploration Geologist in 1994. He was the geologist
who recognised the potential of the Tampakan district,
recommending the acquisition of the property and
successfully managing the initial exploration and testing. Alan
joined Indophil at the time of its formation in 1996.
5.5 Corporate Governance
The Board is responsible for protecting the rights and
interests of shareholders and for the overall corporate
governance of the Company.The Board’s responsibilities
include:
formulating the strategic objectives of the Company and
establishing goals designed to promote the achievement
of those strategic objectives;
considering and approving the Managing Director’s
proposals for the Company’s annual work programs and
budgets;
monitoring the performance of management against these
goals and objectives;
ensuring that there are appropriate internal controls and
ethical standards of behaviour adopted and met within
the Company;
ensuring that the business risks facing the Company are,
wherever possible, identified and that appropriate
monitoring and reporting controls are in place to manage
these risks; and
5. Directors, Management and Corporate Governance
appointing the Managing Director, evaluating the
performance and determining the remuneration of senior
management and ensuring that the appropriate policies
and procedures are in place for recruitment,
remuneration and succession planning.
(a) Composition of the Board
The Board currently consists of four Directors, with two
Executive Directors and two Non-Executive Directors
including the Chairman.
Any changes to directorships will, for the foreseeable future,
be dealt with by the full Board subject to any applicable laws
and accordingly a nominations committee has not been
established.
(b) Board Committees
The Board has a Remuneration Committee consisting of
Bryan Davis as Chairman and Kevin Robinson.The
remuneration of Directors and senior management is
determined periodically by the remuneration committee.
The Board intends to establish an Audit Committee.
The Audit Committee will consist of Non-Executive
Directors. At the discretion of the committee, the external
auditors and the Managing Director will be invited to attend
Audit Committee meetings. The Audit Committee will
consider any matters relating to the financial affairs of the
Company and any other matter referred to it by the Board.
The Audit Committee will meet at least once per year.
The Board may sometimes delegate some of its monitoring
and routine functions to other committees.
(c) Ethical Standards
The Board believes that the success of the Company to date
has been partly based upon the strong ethical culture within
the organisation. As the Company grows, the need to
ensure that these ethical standards remain is leading to
greater emphasis on developing policies to ensure that all
Directors, senior managers and employees act with the
utmost integrity and objectivity in their business dealings.
(d) Directors’ and Senior Managements’ Dealings
in the Company’s Shares and Options
The Company requires that:
Directors discuss any proposed trade in shares and
options with the Chairman prior to any trade;
senior management must discuss any proposed trade in
shares and options with the Company Secretary or the
Managing Director prior to any trade;
41
Indophil Section 05 14/3/02 5:45 PM Page 42

5 Directors, Management and Corporate

G o v e r n a n c e c o n t ’d

trades in shares and options by Directors and senior

management are limited to stipulated periods unless there
are unusual circumstances; and

Directors and senior management are aware of their

obligations under the Corporations Act not to trade or
procure trades in shares and options if in possession of
price sensitive non-public information, and to ensure that
they do not communicate materially price-sensitive non-
public information to any other person who is likely to
trade shares and options or communicate such
information to another party.

(e) Independent Professional Advice

In fulfilling their duties, each Director dealing with corporate
governance matters may obtain independent professional
advice at the expense of the Company subject to prior
approval of the Chairman, whose approval will not be
unreasonably withheld.

42
Indophil Section 06 14/3/02 5:44 PM Page 43
6 Risk Factors
The business activities of the Company are subject to risks.
These risks should be considered carefully by Applicants before
making a decision to apply for Shares and Options as they
may adversely affect the value of the Company’s assets, Shares
and Options. Some of these risks can be mitigated by the use
of safeguards and appropriate systems and actions, but some
are outside the control of the Company and cannot be mitigated.
In addition to risk control for insurance purposes,
appropriate risk management processes have been or will be
instituted to, as outlined below:
develop risk management goals, objectives and
infrastructure;
assess business risks;
formulate business risk management strategies;
design and implement risk control processes;
monitor risk management performance; and
continuously improve risk management processes.
The principal risks include, but are not limited to, those
detailed below. Neither the Company nor its Directors nor
any of its professional advisers give any form of guarantee of
future dividends, return of capital, or the price at which the
Shares and Options might trade on the ASX. Applicants
should consider these risk factors, as well as other information
in this Prospectus prior to making an investment decision.
6.1 Sharemarket Considerations
The Shares and Options are to be listed on the ASX, where
their price may rise or fall in relation to the Offer Price. The
Shares and Options issued under this Prospectus carry no
guarantee in respect of profitability, dividends, return of
capital or the price at which they may trade on the ASX.
The value of the Shares and Options, will be determined by
the stock market and will be subject to a range of factors
some of which are beyond the control of the Company and
its Directors. Returns from an investment in these Shares
and Options may also depend on general share market
conditions as well as the performance of the Company.
There can be no guarantee that an active market in the
Shares and Options will develop or that the market price of
the Shares will not decline below the Offer Price.
6.2 Speculative Nature of
Exploration and Mining
Mineral exploration is a high-risk business with no guarantee
of success and investment in mineral exploration is
considered speculative. The mineral tenements of the
Company are at various stages of exploration and
accordingly, the Shares and Options offered by this
Prospectus are speculative in nature.
6. Risk Factors
There is no assurance that any exploration of the mineral
tenements described in the Prospectus, or any other
tenements that may be acquired in the future will result in
the discovery of an economic deposit. Even if an apparently
viable deposit is identified, there is no guarantee that it can
be economically developed.
6.3 Commodity Prices and
Exchange Rates
The Company’s future revenues will depend on the
economic viability of the Company’s mineral properties,
world commodity prices and international exchange rates.
Metal prices fluctuate and are affected by numerous factors
beyond the control of the Company. These factors include
world demand for metals, forward selling by producers and
production levels in major metal producing regions.
In addition, most of the Company’s expenditure in the near
future will be in Philippine pesos, so the Company is exposed
to the Australian dollar-Philippine peso exchange rate. Over
the past four years the Philippine peso has varied from
approximately 23 to 27 PHP to the Australian dollar.
6.4 Country
The Company’s exploration activities are currently focused
in the Philippines where historically from time to time there
have been civil disturbances and insurgency in certain
regions of the country.The activities of the Company,
including exploration and future mining and processing
activities, may be affected by these actions. While there is no
guarantee that outbreaks will not occur, it is Company policy
to operate only in areas that are considered to be low risk.
The Company has operated safely and successfully in the
Philippines since 1996 with no adverse incidents and the
safety of all Indophil employees is of paramount concern to
the Company.The Executive Directors will continue to
monitor the security status of those areas in which Indophil
operates and where appropriate, will take advice from
external advisers.
In January 2001 the Government of the Philippines changed,
following a peaceful mass demonstration of the people.The
change of Government was widely accepted by the
community, business, and foreign governments and is viewed
generally as a positive step by foreign investors.The new
President of the Philippines is the former Vice-President,
Mrs. Gloria Macapagal-Arroyo.
The Philippines is predominantly a Catholic country but a
minority of the people living on the southern island of
Mindanao are Muslims. There is a long history of unrest
between the Christian and Muslim populations as the latter
are seeking an independent Muslim state for Mindanao.The
current administration is seeking to peacefully resolve this
situation and talks are in progress. Parts of Mindanao already
43
Indophil Section 06 14/3/02 5:44 PM Page 44
6 Risk Factors c o n t ’d
enjoy an autonomous region status. Indophil is operating in
Mindanao but the properties either held or under
negotiation are not located in areas of high risk.
In recent times the Abu Sayyaf have gained international
prominence because of their guerrilla activity and suspected
links to Al Queda. They operate in the Sulu Archipelago of
the far south and western areas of the country and into the
nearby Malaysian State of Sabah. The Philippine Government
is taking a very strong stance against the Abu Sayyaf and is
maintaining an intense military offensive against them with
US military support in an advisory and training capacity.
Their activities have been distant and remote from the main
regions of the Philippines.The operations of Indophil are a
considerable distance from the activities of Abu Sayyaf.
6.5 Legal Title
New mining legislation was introduced in the Philippines in
1995, which involved converting previous mineral tenements
to the new title system. Details of the system are outlined in
Section 8.The implementation of this new legislation has
resulted in significant delays in the tenement approval
process and some of the properties that Indophil will be
exploring are still in the “application stage”. Furthermore,
applications have been lodged to extend the arrangements
under which Indophil has the right to explore certain of its
properties and these applictions are currently being
considered by the authorities. All companies investing in
mineral exploration in the Philippines have to operate under
similar conditions with the possibility of an application being
rejected or challenged. All of Indophil’s applications have
followed the correct procedure and all properties have been
subject to normal legal due diligence processes. Section 8
contains details of Indophil’s rights in respect of each of its
properties (including any existing challenges by third parties).
FTAAs as a form of mineral agreement are currently the
subject of a Supreme Court challenge on Constitutional
grounds (see Section 9.4).
6.6 Development and Operational
The Company is still in the exploration stage and no
assurances can be given that the Company’s activities will
result in a commercially viable operation. At the time the
Company moves to establish and operate a mining site it will
be subject to the many risks inherent in mining operations.
While the Company currently intends to maintain insurance
within ranges of coverage consistent with industry practice,
no assurance can be given that the Company will be able to
obtain such insurance coverage at reasonable rates, or that
any coverage it obtains will be adequate and available to
cover any future claims.
44
6.7 Financial
Indophil has no income yielding assets apart from working
capital deposits from which interest income is earned. Until
the stage when proceeds of product sales are regularly
received, with or without the involvement of joint venture
partners, all of the Company’s exploration and development
requirements will need to be funded through further share
issues (in which case the shareholdings of existing
shareholders will be diluted), debt or asset divestment such
as farm out arrangements. The Company’s ability to raise
further equity or debt or to divest a part of a project and
the terms on which such transactions are made, will vary
according to a range of factors. These include success in
title acquisition, future exploration and development and
external factors including stock market conditions, interest
rates, metal prices and political influences. Although the
Company intends planning its funding needs well in advance
of requirements, there can be no certainty that future fund
raisings can be achieved on satisfactory terms or on terms
which add value to the Shares and Options issued under
this Prospectus.
The ultimate recovery of the Company’s exploration
expenditure is primarily dependent upon the successful
development and commercial exploitation by mining
activities (which would require the granting of a mining
licence) or, alternatively, sale of the area of interest at an
amount at least equal to book value.
6.8 Environmental
The Company intends to conduct all its activities in a
manner that is environmentally responsible and in
compliance with legal requirements. Some of the proposed
activities of the Company are environmentally sensitive and
cannot be carried out without prior approval from and
compliance with all requirements of the relevant
environmental authorities. As a matter of course the
Company is required to rehabilitate properties that have
been the subject of exploration. If the Company moves into
development and operational activities, then the Company
will continue to comply with the additional environmental
requirements involved. In addition, gold and copper
exploration, development and production can be
environmentally hazardous if not properly managed and may
give rise to substantial costs for environmental rehabilitation,
damage control and losses.
Indophil Section 06 14/3/02 5:44 PM Page 45

6. Risk Factors
6.9 Resource Estimates 6.13 Proposed Tampakan Acquisition
Resource estimates are expressions of judgement based on The Company is in the process of seeking to acquire an
knowledge, experience and industry practice. Estimates, interest in the Tampakan Project located in the southern
which were valid when made, may change significantly when Philippines. This is currently under legal challenge by a third
new information becomes available. In addition, resource party. Specific risks associated with the Proposed Tampakan
estimates are imprecise and depend to some extent on Acquisition are outlined in Section 9.6.
interpretations, which may prove to be inaccurate. Should
the Company encounter mineralisation or formations The Company has entered into certain binding arrangements
different from those predicted by past drilling and mining, with MIM Holdings Limited (MIM) in relation to MIM’s
resource estimates might have to be altered in a way which involvement in the Tampakan Project. Under these
could either benefit or adversely affect the Company’s arrangements, MIM acquires certain rights in relation to the
operations. appointment of its representative as a Director of the
Company, in relation to the Tampakan Project and in relation
6.10 Land Access to future capital raisings. Details of these arrangements are
contained in Sections 9.5.5 and 9.6.
Immediate access to mineral tenements cannot in all cases
be guaranteed.The Company may be required to seek
consent of landholders or other persons or groups with an
interest in real property encompassed by the Company’s
tenements. Compensation may be required to be paid by
the Company to land holders in order that the Company
may carry out exploration and/or mining activities. Several
of the Company’s tenements are at application stage only
and access is dependent upon the tenement being granted.
Native title exists in the Philippines and is governed by law.
Where applicable, agreements with indigenous groups have
to be in place before a mineral tenement can be granted.
Although this lengthens the application time the Company
has found the process manageable and has a number of
agreements in place with indigenous groups.

6.11 Regulatory
Changes in relevant taxes, legal and administration regimes,
accounting practice and government policies both in
Australia and the Philippines may adversely affect the
financial performance of the Company. The Company will be
taxed in Australia as a public company but will earn its future
income in the Philippines, and future changes to either
country’s taxation regime could have an adverse effect on
the Company’s business.

6.12 Dependence on Key Personnel

The Company is reliant on a number of key personnel
employed by the Company. Loss of such personnel may have
a material adverse impact on the performance of the
Company. While there can be no assurance given as to the
continued availability of such key personnel, the Company
plans to put in place new long-term employment agreements
for certain of these personnel and will consider introducing
equity participation programs with Executive Directors and
senior management.

45
Indophil Section 07 14/3/02 5:54 PM Page 46

The Directors 6 March 2002

Indophil Resources N.L
Suite 3, Technology Enterprise Centre
2 Park Drive,
Bundoora, Victoria 3083
Australia

INDEPENDENT GEOLOGIST’S REPORT

Dear Sirs,

In a letter and contract dated September 14, 2000 and a subsequent letter dated February 8, 2002
Indophil Resources N.L. (“Indophil”) has requested the services of Exploration Services
International (ESI), and specifically its President, Michael L. Page (Page), to conduct site
inspections and to prepare an Independent Geologist’s Report (“Report”) on their Philippine
exploration properties. Indophil intends to include them in a Prospectus for the purpose of raising
public funds to be used for mineral exploration. It was also requested that the Report should
follow the requirements of the ASX and the Corporations Act, the Valmin Code of February 1998
and the JORC Code 1999 of the Australasian Institute of Mining and Metallurgy (AusIMM). As
per the requirement of paragraph C45 of the Valmin Code, that comment should be made on
environmental and land access issues that may influence technical and valuation reports, ESI has
made comment in the text. However, ESI is not an environmental specialist, and its comments are
only of a general nature. This geological report is intended to give potential investors an
independent assessment, and to aid them in their investment decisions. This report cannot be used
for any other purpose than the Prospectus itself, without permission from ESI.

Mineral properties evaluated in this report include:

Manat J.V., Mindanao

Labo Properties, Luzon
Bunawan, Mindanao
Hinotongan J.V., Negros
Leyte Properties, Leyte
Northern Sierra Madre, Luzon
Buda, Mindanao

This Report is based on the experience of ESI and Page, detailed field visits to, and selective
sampling of the Indophil properties in the Philippines, and background project information from
both public and private sources supplied by Indophil. ESI sampling is reported in tables identified
by “due diligence sampling” in the body of this text. Some of the properties were previously
assessed in 1997 for a planned float that was suspended as a consequence of difficult market
conditions. This information has been used, with any new information included in the current
report. Any of this material is noted in the current text. Indophil has warranted to ESI that full
disclosure of information has been made and that such available information at the time of this
Report is complete as possible, and truthful to the best of their knowledge. Where checking has

46
Indophil Section 07 14/3/02 5:54 PM Page 47

7. Independent Geologist’s Report

been possible and sampling been conducted, ESI is satisfied with the information. Certain
information comes from vendors providing previous company exploration data of their properties.
Where subsequent Indophil exploration has been done, it generally confirms the validity of the
vendor’s information. However, it has not been possible to validate all historical information on the
properties, and ESI relies on Indophil for its authenticity and accuracy. Previous exploration data is
useful as it can provide guides to an area’s potential. Such information and its quality is referred to
in the project descriptions. ESI believes the information to be reliable and knows no reason why it
is incorrect.

ESI and Page also rely on other expert reports within this Prospectus, specifically the due diligence
on land tenure, indigenous people's land claims, mining law, and country risk analysis, and
ESI/Page take no responsibility for these or any clear title issues. Where tenement applications are
in progress, ESI assumes for purposes of discussion that they will be granted if the granting process
is at an advanced stage.

The Independent Geologist’s Report has been prepared by Michael L. Page, President of ESI. Page
has an M.Sc (Summa cum Laude) from the Hebrew University of Jerusalem, is a Fellow of the
AusIMM (membership No. 112736), a current member The Society for Mining, Metallurgy, and
Exploration of the AIME of the United States, and a Fellow of the Society of Economic Geologists.
He has 27 years international experience, 16 of which were in Australia. His experience includes
basemetals, nickel, and gold exploration in Australia, North and South America, and West Africa.
He worked 20 years with Western Mining Corporation in exploration and research, and was, among
other senior positions, their Chief Geologist–USA until 1993. He was Chief Geologist for Golden
Shamrock Mines Ltd. of Melbourne, Australia until 1996, and since that time has been President of
Exploration Services International, an international geological consulting company based in
Denver, Colorado, USA. Page fills the requirements for an “Independent Expert” as defined in
ASIC Practice Note 42 and 43. Only Page has been involved with ESI’s work on this assessment.

The Independent Geologist’s Report was written according to the requirements of the ASX, the
Corporations Act, the Valmin Code of February 1998 and the JORC Code 1999. The following
Australian Securities and Investments Commission (ASIC) Practice Notes were used as guidance:
in relation to ASIC Practice Note 42, experts’ reports; ASIC Practice Note 43, valuation reports; and
ASIC Practice Note 55, requirements for consent. Australian Stock Exchange (ASX) Listing Rule
1.3.2 has been followed, with the required information contained in this report. The author and
signatory are bound by the authority of the Ethics Committee of the AusIMM.

Neither ESI, Page nor any family members hold any equity in Indophil, nor interests in any of the
properties or related companies reviewed. The only work Page has completed for Indophil, was the
Independent Consulting Geologist’s Report commissioned by Indophil in 1997.

ESI has received a daily rate compensation, plus expenses, for the field visits and the report
preparation. Payment is not contingent on the conclusions of the report or on the outcome of the
fund raising.

Sincerely,

Michael L. Page
President

47
Indophil Section 07 14/3/02 5:54 PM Page 48
7 I n d e p e n d e n t G e o l o g i s t ’s R e p o r t
INTRODUCTION
Indophil Resources N.L. (“Indophil”) has built a large
portfolio of both advanced and early stage exploration
tenements for gold and copper in the Philippines.The spread
of properties reflect the Company’s intention to establish
mineable resources and to provide asset growth by
conducting early stage exploration, in areas of high mineral
potential, which have not undergone systematic, modern
exploration. It is also their plan to continue to add
properties with high growth potential, while discarding
projects whose exploration results are less than the
minimum expectation.
Specifically, the projects range from the advanced Manat J.V.
and Labo Projects, both with mineralised drill intercepts, to
remote grassroots reconnaissance projects (Northern Sierra
Madre and Buda).The flagship project is the Manat J.V. where
a major gold-silver-base metal vein system has been drilled
over a strike length of one kilometre, and has undergone
preliminary resource estimation.
With regard to property holdings, the reader should refer to
the Indophil Solicitors’ Report - Philippine Tenements
contained in section 8 of this Prospectus for the definitions
and descriptions of the various levels of land ownership
titles in the country.
There is cross-referencing of figures and tables between this
report (section 7) and the Company’s exploration review in
section 4 of this Prospectus with Figure and Table numbers
prefixed accordingly (e.g. Figure 4.8 refers to the 8th figure
in section 4)
ACCESS, CLIMATE, AND TOPOGRAPHY
The Philippines is one of the world’s largest archipelagos
with more than 7000 islands stretching over a north to
south length of more than 1800 km, encompassing a total
land area of 300,000 km2.This characteristic means that
transportation is a key issue in the country. It is catered for
by an excellent and modern system of boat and air
transport. Most of the main islands are served by regular, if
not daily flights that commonly use jet aircraft. Sea travel
includes normal ferries as well as state-of-the-art hydrofoils.
For the exploration industry, there is an experienced
helicopter service industry.
Road travel is generally good, but of variable quality with
significant congestion within the Manila metropolitan area.
Many of the sealed roads are made of concrete and require
maintenance, but there is considerable investment in
reconstruction. From the exploration point of view, there is
relatively good access to many parts of the country, except
for central and western Mindanao, central Leyte, and
northeastern Luzon.
Topographically, the Philippines is dominated by extreme
relief, generated by the active geological processes of faulting
48
and volcanism. Consequently, the country is seismically active
and is well known for its active volcanoes.
Climatically, temperatures vary between 24° and 31°,
with humidity between 70% and 90%.The climatic and
topographic factors combine to produce high seasonal
rainfalls averaging about 3 metres, but locally exceeding
5 metres.
ECONOMY AND INFRASTRUCTURE
The Philippines is a developing country whose economy in
recent times has been able to sustain high growth rates.The
textile, high technology, and real estate industries have
fuelled economic growth.The mining industry has stagnated
due to parochial mining legislation causing a lack of
investment capital (below). After much lobbying, a revised
mining code was introduced in 1995 and associated
Implementing Rules and Regulations (IRR’s) in 1996, with the
hope of stimulating investment in the exploration industry.
Unfortunately, granting of new mineral titles more suitable to
the international mining industry has been slow. However,
Indophil is one of the first companies to have received new
titles and is well placed to gain approved title for many of
their other properties. Consequently, the access to land and
receipt of title is becoming more efficient.The reader is
encouraged to refer to the Solicitors’ Report - Philippine
Tenements in section 8 of this Prospectus.
Power supply is now adequate, being generated through
hydroelectric projects and geothermal energy that taps
suitable volcanic fields. A major project is currently under
development to provide energy to Luzon following the
discovery of gas fields in deep water near Palawan.
Most of the modern business support services are easily
available, including email, Internet services and widespread
digital mobile phone services.These services are not
necessarily restricted to the large cities, but are even
available in many regional centres.
ENVIRONMENTAL ISSUES
Environmental issues are covered in various sections of this
Prospectus. Access for exploration and mining activity is not
allowed in National Parks, special forest reserves or certain
forest classifications and gazetted watershed reserves. Such
areas have been excised from Indophil tenement applications
to facilitate the tenement approval process. As a
consequence, there should be no significant restrictions on
work activities. Indophil’s work practices are sensitive to the
environment, and as witnessed by the author in the field,
they conduct their activities in as low impact a way as
possible. At Manat, Indophil supports a nursery and tree-
planting program.The Mining Industry in general is quite
attentive to water quality issues, particularly after the much-
publicised Marcopper-Placer spill from a tailings dam that
resulted in amendments to the implementing rules and
regulations (IRR’s) of the Mining Act.
Indophil Section 07 14/3/02 5:54 PM Page 49
EXPLORATION SERVICES
The exploration industry in the Philippines is advanced by
world standards.The professional workforce is well
educated, has scope for significant on-the-job training in
mining and exploration, and has a history of drilling and assay
services. Access to inexpensive labour means that some jobs
are done manually, and in many cases are more cost
effective, more environmentally sensitive and better suited to
local terrain conditions than wholly mechanised operations
(e.g. access preparation, costeaning etc.).
Drilling
Drilling services in the Philippines are dominated by diamond
drilling. Recently, new generation multi-purpose, Australian
RC-diamond rigs have become available.These track-
mounted machines, suitable for less steep terrain, will change
the speed and cost of testing of some exploration projects,
and thus should help lower exploration costs.Where
applicable, the introduction of RC technology will allow
more holes to be drilled, thereby increasing both the amount
of available data and the confidence in outlined resources. A
new generation, man-portable, high capacity modular
diamond drill was imported specifically for Indophil’s Manat
drilling program to minimise the impact of drilling operations
on the environment. Its employment in rugged topography
has helped to reduce drilling costs when compared with
helicopter supported drilling operations.
Assaying
Given the sensitivity of the public to assaying in exploration
projects, a few comments on Indophil’s approach to assaying
are warranted.
All Indophil’s assays and sample preparation are done at the
laboratories of McPhar Geoservices in Manila.This facility
has been running for 28 years, and the principals were part
of the original Canadian McPhar group. It was one of the
first commercial laboratories in the world to have received
ISO 9002 accreditation, and has recently passed their re-
accreditation audit.
The following are the parameters of Indophil’s assays
reported in this document:
ELEMENT ANALYTICAL DETECTION
METHOD LIMIT (PPM)
Gold FA 0.02
Silver AAS 0.5
Arsenic AAS 1
Copper AAS 5
Lead AAS 5 exploration effort. Production of copper peaked in 1980 and
Zinc AAS 5
FA - Fire Assay with AAS finish.
AAS - Atomic Absorption Spectroscopy
7. Independent Geologist’s Report
For drill core, Indophil uses a gold fire assay technique with a
sample weight of 50 grams, in order to obtain a more
representative result at better precision.The detection limit
for gold analysis applied to stream sediment and soil samples
is 5ppb, which is very acceptable for tropical environments.
The laboratory has internal controls that routinely repeat
the assay for every 10th sample, by analysing a new sample
aliquot. If there is an unusually high value in a string of low
values, the sample is also automatically reanalysed.
MINERAL TITLES IN THE PHILIPPINES
The reader should refer to the Solicitors’ Report -
Philippine Tenements in Section 8 of this Prospectus for a
description of the Philippine Mining Law, types of titles and
specific Indophil land holdings.
As experience with the new Mining Act has increased,
Indophil’s land application and title strategy has changed. On
account of the slow approval of Financial or Technical
Assistance Agreements (FTAAs) (only 2 approved to date
since the inception of the new Mining Act) and a Supreme
Court challenge to their validity, Exploration Permits (EP)
and Mineral Production Sharing Agreements (MPSA) are the
main title vehicle.
Although the FTAA gives the longer-term tenure (25 + 25
years) and includes mining and pre-established commercial
and fiscal terms, the EP is approved in a shorter time frame
and all forms of exploration activities are permitted.
However, the tenement life is much shorter (2 + 4 years)
with a further extension of 2 years at the discretion of the
Secretary of the DENR. The statutory expenditure
commitments for EP’s are work program and not dollar
amount based. Submitting biannual reports, supplying
exploration results, and verifying the completion of the work
program fulfils these commitments.
Some of Indophil’s properties are covered by MPSAs.The
statutory expenditure commitments for MPSAs are similar
to EPs, and are work program based. Fulfilling the
commitment requires submission of annual and other
statutory reports.
METAL ENDOWMENT, EXPLORATION AND
MINING HISTORY
The Philippines is one of the most intensely mineralised and
prospective areas in SE Asia, and hosts some of its largest
gold and copper deposits.
In the past, the Philippines had a world-class copper and gold
mining industry, which supported and relied on a large
has progressively fallen since. Gold production growth has
been static, and has fallen behind its neighbours. It is
generally accepted that poor government policies,
49
Indophil Section 07 14/3/02 5:54 PM Page 50
7 I n d e p e n d e n t G e o l o g i s t ’s R e p o r t
particularly the implementation of the mining law,
unattractive maximum foreign equity, and lack of investment
incentives, drove capital to other more attractive foreign
markets where modern business rules existed. The situation
is improving with the new Mining Code, and associated
Implementing Rules and Regulations (IRR’s).
Table 7.1 shows the tonnage-grade characteristics of the
significant Philippine gold and copper-gold deposits. It gives a
good indication of the size and quality of new discoveries
that might be expected.
Prior to the early 1970s, there have been several phases of
exploration in the Philippines, particularly around existing
mines and in known districts. However, little has been done
in outlying areas, either due to lack of funds or because of
security concerns. Contrary to perception, both these issues
have improved dramatically, particularly the latter. During the
1997 and the current due diligence field assessment visits to
Indophil properties, no security problems were experienced,
and the local communities have been living in tranquillity for
a number of years since the disbanding and disappearance of
rebel groups. Indophil has a policy of not exploring in areas
of conflict, especially in Western Mindanao and the Sulu
Group of Islands. As has been demonstrated around the
world, in places like Peru and West Africa, the companies
first in after such periods of instability, have the best chance
of exploration success.The best examples of recent success
in outlying areas are the discovery of the Tampakan and
Didipio copper-gold deposits.The recent discovery of the
blind Victoria gold vein system in the Lepanto district, an old
established mining centre, is an excellent example of the
great potential still remaining even in an intensely explored
area of the Philippines.
Exploration technology has also advanced and there is a
much better understanding of gold exploration models. Only
in recent time has the country been exposed to techniques
such as Landsat, Radarsat, airborne geophysics, and advanced
exploration geochemistry, particularly the compilation and
analysis of integrated regional data sets.
GEOLOGY
The relatively young geology of the Philippines (Figure 7.1) is
dominated by plate tectonic forces and the magmas
generated by that process.The island group in fact sits in a
unique position, caught between two opposing slabs of
oceanic floor that dive under the island chain.The Indochina
Plate to the west has moved east and the Philippine Plate
(east) has moved west. As the leading edge of the slabs
descended to depths of >50 km, the ocean floor mafic
volcanics and the skin of oceanic sediments began to melt.
This is a normal process of forming andesitic island arcs, a
process that goes on today, and is the cause of many current
day active volcanoes in the Philippines, Melanesia, and the
Pacific. It is the reason for its name the “Ring of Fire”.
50
c o n t ’d
Another critical feature in the process is faulting.Where
strain builds up within these grinding plates, ruptures
commonly occur.These are known as “Transform Faults”,
since part of the diving momentum of the descending slab is
converted at the tear point into a horizontal, strike-slip
movement to accommodate the strain. Simply speaking, one
could conceive this as an actively shifting jigsaw puzzle, with
the movement of each piece influencing the movement of
the others.With the complex movement of pieces, any
collisions require some give along the “Transforms”.These
strike-slip faults commonly have small or second-order
branch faults or flexures and kinks in the main fault.When
the main structure moves, these branches and kinks actually
pull apart creating new space. Such a dilational area (“pull-
apart” basins) can be filled by sedimentary debris or magma
rising from depth along the structure.
A strong link between tectonics and volcanism has shaped
the geology and mineralisation of the Philippines.The rising
mixture of melted oceanic slab and scoured, ocean floor
sediments produce the great volumes of andesitic volcanics
and intrusive diorites characteristic of the Philippines.These
melts are a likely source of the associated Cu-Au porphyries
and epithermal gold deposits being sought. One of the places
these “bubbles” of magma rise into are the dilation “pull-
apart” zones associated with the strike-slip faulting.
A major collision of the Plates generated two events: firstly a
major strike-slip fault, the Philippine Fault (PFZ, Figure 7.1),
near the collision zone, and secondly it may also be partly
responsible for the outpouring of Pliocene andesite
volcanism. It has been postulated in the scientific literature
that the melting of the descending oceanic slab may be
initiated on cessation of collision, producing gold-rich
magmas and “superporphyries” like Grasberg, Ok Tedi, and
Tampakan.The PFZ is one of the dominant geological
features of the islands. Major zones of gold and base metal
mineralisation are developed on or near it, such as the
Baguio District in northwestern Luzon, the Paracale District
in southeast Luzon, and the eastern Mindanao Goldfields
containing the Placer and Co-O Mines, the famous Diwalwal
workings and the Masara mineral district.
The Philippine Fault is thus thought to be a generative
“master structure”, one that is associated with, and possibly
responsible for the formation of mineralised districts.
The relationship of large structures to mineralisation is not
unique in exploration geology. Similar structures exist back
to Archean times (2.7 billion years), and in many countries
including: El Indio, Chile, the Atacama Fault Zone of northern
Chile, the Boulder-Keith-Kilkenny Fault System in the St. Ives,
Kalgoorlie, Leonora, Agnew, and Wiluna districts of Western
Australia, the Porcupine Fault and Cadillac Break in the
Timmins and Val d’Or districts of Canada, and the Mother
Lode district of California.
 Table 7.1 Significant Copper and Gold Deposits of the Philippines (Pre-mined resources)
Deposit Location Type Size (Mt) Cu (%) Au (g/t) Status Comments Source
Antamok Antamok Epithermal-LS 40* 5-10* Historical production exceeding 300t Au to 1990. Mitchell A H G & Leach T M (1991) Epithermal Gold in the Philippines
Acupan Luzon Epithermal-LS 14* 6* Produced 84t Au from 1929-1958. Historical production Mitchell A H G & Leach T M (1991) Epithermal Gold in the Philippines.
estimated at 200t Au and similar Ag Cooke D R & Bloom M S (1989) Journal of Geochemical Exploration
Sto.Tomas Luzon Porphyry 367.6 0.31 0.63 Active mine Philex handout 1999
Sto Nino Luzon Porphyry 125.0 0.34 0.26 Abandoned Reserves only. In production 1972-1981 Mitchell A H G & Leach T M (1991) Epithermal Gold in the Philippines
Dizon Luzon Porphyry 140.0 0.43 0.93 Mined out Porter T M (1998) Conference proceedings "Porphyry and
Hydrothermal Copper and Gold Deposits, Perth 1998
Dizon Extension Luzon Porphyry 20.0 2.00 Undeveloped Clarke (1997) Conference Paper " Mining Philippines" Manila, July 1997
Batong Buhay Luzon Porphyry 70.0 0.60 Unknown.
Guinaong Luzon Porphyry 326.0 0.40 0.40 Undeveloped Total resource includes a higher grade core of 166 Mt @ Andrew R L (1995) Porphyry copper-gold deposits of the southwest
0.5% Cu and 0.5g/t Au. Also known as Tirad.Pacific; Mining
Engineering January 1995.
Lepanto Luzon Epithermal-HS 36.2 2.19 3.40 Mined out The mine historically produced 743,395t Cu, 92t Au and Disini A F et al (1998) The Mankayan Mineral District, Luzon,
390t Ag from 1937 to closure. Philippines in Conference Proceedings " Porphyry and Hydrothermal
Indophil Section 07 14/3/02 5:54 PM Page 51

Copper and Gold Deposits, Perth,WA November-December 1998

Lepanto-FSE Luzon Porphyry 650.0 0.65 1.33 Pre-development Geological resource at a 0.7% Cu equivalent COG As above
within which there is a higher grade core (mineable
reserve) comprising 105 Mt 0.86% Cu and 2.02g/t Au
at a COG of 1.8% Cu eqv..
Lepanto-Victoria Luzon Epithermal-LS 17.3 7.71 Active mine Includes reserves of 6.16Mt @ 7.22g/t Au and an MJ October 20, 2000
additional resource of 11.12 Mt @ 7.98g/t au as at
January 1, 2000 but excludes historical production
of approximately 250,000 Ozs from 1996..
Didipio Luzon Porphyry 124.0 0.40 1.00 Pre-development Indicated resources with proven reserves in a central Haggman J (1997) in Didipio Gold Copper Project, Conference
core of 17.7Mt @ 2.37g/t Au and 0.67% Cu Proceedings Mining Philippines, Manila July 1997
(mining journal Vol 334/8566.
Runruno Luzon Breccia? 27.0 1.40 Exploration Initial identified resource AJM May/June 1997
Taysan Luzon Porphyry 600.0 0.31 0.30 Exploration Initial identified resource AJM May/June 1997
Longos Luzon Epithermal-LS 2.2 11.60 C&M United Paragon (1990) Booklet.
Tapian Marinduque Porphyry 177.0 0.52 0.12 C&M Porter T M (1998) Conference proceedings "Porphyry and
Hydrothermal Copper and Gold Deposits, Perth 1998
San Antonio Marinduque Porphyry 198.0 0.57 0.10 C&M Marcopper handout
Aroroy Masbate Epithermal-LS 87.6 1.49 Feasibility Includes production of 16.24Mt @ 2.13g/t Au and Geoff Davis (personal communicationn)
measured and indicated resources of 71.34Mt @ 1.35g/t Au
Atlas-Lutopan Cebu Porphyry 540.0 0.50 0.25 C&M Porter T M (1998) Conference proceedings "Porphyry and
Hydrothermal Copper and Gold Deposits, Perth 1998
Atlas-Carmen Cebu Porphyry 396.0 0.50 0.23 C&M Porter T M (1998) Conference proceedings "Porphyry and
Hydrothermal Copper and Gold Deposits, Perth 1999
Atlas-Biga Cebu Porphyry 443.0 0.43 0.25 C&M Porter T M (1998) Conference proceedings "Porphyry and
Hydrothermal Copper and Gold Deposits, Perth 2000
Bulawan Negros Breccia? 25.0 2.00 C&M Commenced operation in 1996 but mining has been Anievas J B (1997) Overview of the Bulawan Gold Mine,
suspended. Produced 90,000 ozs Au in first year of Conference Proceedings - Mining Philippines Manila, July 1997
operation. Figures are total resource.
Sipalay Negros Porphyry 884.0 0.50 0.34 C&M Also called Maricalum Porter T M (1998) Conference proceedings "Porphyry and
Hydrothermal Copper and Gold Deposits, Perth 2000
Hinoba-an Negros Porphyry 325.0 0.42 Undeveloped Combined geological rsource at 0.25% COG. Unknown.
Also known as Basay
Placer Mindanao Breccia? 38.0 1.30 Active mine Total resource Tyrwritt D (1998) Conference proceedings "Porphyry and
Hydrothermal Copper and Gold Deposits, Perth 2000
Diwalwal Mindanao Epithermal vein Active mine Estimated 7 Mozs Au. Balkau (1995)
Amacan Mindanao Porphyry 116.0 0.37 0.40 C&M Mitchell A H G & Leach T M (1991) Epithermal Gold in the Philippines
King King Mindanao Porphyry 398.1 0.34 0.52 Undeveloped Sabena Ltd. prospectus October 2000
Masara Mindanao Epithermal 3.3 8.60 C&M Reserves. Also production of 5.5t Au, 9.5t Ag Mercado et al., 1987 Malicdem
Tampakan Mindanao Epithermal-HS 900.0 0.75 0.30 Pre-feasibility Indicated resource at 0.5% Cu COG contained within a WMC quarterly report June 1998
and Porphyry much larger geological resource of 2500 Mt @ 0.48% Cu
and 0.2g/t Au.
Notes: 1 Major =Deposits with > 1 million ozs Au or 1Mt contained copper metal
Notes: LS = Low sulphidation, HS = High Sulphidation (acis sulphate), C & M = Care and Maintainance, COG = Cutoff grade.
* Estimate only

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7 I n d e p e n d e n t G e o l o g i s t ’s R e p o r t c o n t ’d

In fact big structures and big districts are the norm. If you This complex geological environment offers great
are exploring for big mineralised systems, you go to the exploration opportunities, and multiple targets. It is very
areas with big structures, particularly where subsidiary easy to hide ore in areas that might have undergone some,
structures and dilation may have allowed magma and but not systematic exploration, thus increasing the chances
hydrothermal fluids to enter the system.The PFZ, with its of success.
sub-parallel structures, splays and kinks, is therefore one of
the main guides to Indophil’s land acquisition strategy in the It is very important to see the “big picture”, recognising the
Philippines. metal and alteration zoning around one of these large
porphyry systems, and then knowing where to explore
MINERALISATION STYLES within them. Good geological mapping is a requirement to
recognising these relationships and it provides the
Indophil’s exploration focus is gold and Cu-Au deposits.
foundation for all subsequent geochemistry, geophysics, and
However, their reconnaissance phase exploration strategy is
drilling.Without it, success may not occur. Inspection of
designed to detect any base or precious metals
Indophil’s exploration programs has revealed early and high
mineralisation of potential significance.
quality mapping, which has allowed them to establish good
The main mineralisation types found in the Philippines are: potential where others may have failed.
epithermal quartz veins; diorite-hosted Cu-Au porphyry deposits
and their peripheral gold mineralisation; acid sulphate (high
sulphidation) epithermal systems; epithermal, silica replacement
zones in calcareous sediments; skarn systems.The Philippines
is particularly noted for diorite Cu-Au porphyries. In fact,
almost every known Cu porphyry is gold bearing, an
important point to remember when reading the individual
property descriptions and their exploration potential.

Figure 4.2 is a schematic representation of the general

distribution of the major ore types in these dioritic systems.
It gives a good sense of the scale for the mineralised systems
and where they occur with respect to one another. Recent
exploration in the Philippines, particularly at Tampakan,
demonstrates a clear connection between the dioritic
porphyry Cu-Au bodies and acid sulphate base metal-gold
deposits that can directly overly them. Indophil is targeting
all of the above styles of gold and copper mineralisation.

It is clear that in weakly eroded terrains, the porphyry

systems may be deeper than 300m from surface.They are
probably beyond economic reach, unless grades of >1.5% Cu
and >0.5g/t Au could be found either in the intrusions or in
skarns, particularly if lifted by faulting. However, the overlying
acid sulphate and low sulphidation epithermal mineralisation
are both well within reach of cost effective exploration
techniques. If indeed the erosion is minor, any intrusive
bodies will have small cross-sectional areas.

Where erosion is more advanced, the intrusive diorites and

porphyries will be much more substantial in size, and the
inner zones of porphyry Cu-Au alteration and perhaps its
mineralisation will be exposed. In this situation much of the
epithermal mineralisation may have been removed by
erosion, and may not present viable exploration targets.The
porphyry target and any associated skarns will be the main
interest in this situation.

52
Indophil Section 07 14/3/02 5:54 PM Page 53

7. Independent Geologist’s Report

Figure 7.1 Geological Interpretation of the Philippines

LUZON Philippine Plate

15.00N
Catanduanes

Indochina Plate
Ph Samar
Mindoro ili
pp
in
e
Masbate
Fa
ul
t

Panay Is.
Leyte
Cebu
10.00N

Palawan
Bohol

Negros

Basilan
Sulu
0 300

K I L O M ET R E S
120.00E 125.00E
Indophil Resources NL February 2002

53
Indophil Section 07 14/3/02 5:54 PM Page 54
7 I n d e p e n d e n t G e o l o g i s t ’s R e p o r t
MINERAL PROPERTIES
Indophil’s portfolio of properties that were visited with Indophil
personnel from 30 August -12 September, 2000 include:
Manat J.V., Mindanao
De Jesus (Labo) Properties, Luzon
Hinotongan J.V., Negros
Leyte Properties, Leyte
The circumstances of the above properties have not
materially changed since the 2000 field visits, such that this
report is current at the time of writing.
The following properties were not inspected in the field,
generally because nothing had materially changed from the
1997 field assessment visit conducted by ESI.
Palado (Labo), Luzon
Bunawan, Mindanao
Northern Sierra Madre, Luzon
Buda, Mindanao
Sufficient information was made available to the writer to
allow an informed appraisal without a field inspection.
At Palado and Bunawan, other than the new stream
sediment survey and reconnaissance geological data, which
were reviewed in Manila, there were no other material
changes since 1997.
MANAT JOINT VENTURE
ACCESS, LOCATION, and CLIMATE
The Manat Project is located in southeastern Mindanao,
some 60 kilometres NE of Davao City, the major port and
business centre of Mindanao, which provides all modern
business necessities. Good concrete paved roads lead to
Bukal village, at the edge of the tenement block.Within the
property, local government maintains some 4-wheel drive
accessible gravel roads.The area has very high relief, ranging
from 600 to 1100m in the immediate exploration areas.The
highest neighbouring peaks reach 1800m elevation.The
climate is tropical, with temperatures ranging from 28-32
degrees C and rainfall common throughout the year.Total
precipitation is 300 cm/year with a significant rainy season
from December-March.
TENEMENT INFORMATION
Indophil has earned 25% and is earning up to a total of 50%
equity in a farm-in and joint venture arrangement with a
Filipino company, Alsons Development and Investment
Corporation (Aldevinco), an affiliate of the Alcantara Group,
on their Manat MPSA.The approved MPSA covers an area of
15.47 sq km. and is located in the Municipalities of
Nabunturan and Maco within Compostela Valley Province
(COMVAL) in eastern Mindanao (Figure 4.3). Indophil is
earning its 50% equity through the completion of a staged
work program and an expenditure of US$2.25M
54
c o n t ’d
capped at US$3 million. About 4 sq km of the NE corner of
the original MPSA application is a disputed area and is not
included within the approved MPSA. Its status is currently
pending resolution with the Office of the President, and is
not considered further in this report and not represented
on any of the Company’s maps.
GEOLOGY
The geology at Manat is typical of much of the Philippines,
being dominated by diorites, andesitic volcanics and volcanic
sediments. It also straddles a particularly interesting part of
the Philippine Fault Zone, where major secondary splay
faults form an impressive regional horse tail structure (Figure
4.3). An elliptical dilation zone some 40 x 25 km in area was
formed during repetitive strike-slip movements on the PFZ.
The major controlling structures of the district and volcanic
calderas and associated porphyry Cu-Au systems were
formed and emplaced during this event.These features are
the key ingredients of major epithermal and porphyry ore
districts, like Creede, Bingham Canyon, El Indio, and
Escondida.
A field inspection was made August 30-September 1, 2000.
The Magas Vein Zone and Panuraon structure (Figure 4.4b)
were walked almost completely, and the major prospects and
mineralisation styles were visited, including the neighbouring
Nocnocan mine. Some confirmatory surface sampling was
conducted. Diamond drill core from the Magas vein system
was inspected and sampled.
Indophil’s geological mapping has advanced the understanding
of the property and has guided their subsequent exploration
work (Figure 4.4a).The stratigraphic sequence and major
rocks types include:
Basement Andesitic Volcanics and Clastics - The RP-
Japan Mapping Project (1972) assigned a Cretaceous age
to this predominantly volcanic unit.
Basement Quartz Diorite - This is the most common
lithology at Manat, dominating the geology of the
northern half of the tenements. Interpreted co-magmatic
diorites were dated as Upper Miocene age.
Diorite Porphyry - This intrusive rock is most common
in the southern part of the area. A similar intrusive is
reported to host the Amacan (North Davao) porphyry
copper orebody, located to the south of the Manat
tenement (Figure 4.3).Volcanic and intrusive rock samples
collected from a geothermal exploration well gave ages
from 18 Ma (mid-Miocene) to 11.1Ma (Upper Miocene).
At Manat it commonly contains disseminated and
stockwork porphyry Cu mineralisation.
Megacrystic Andesite Porphyry – 0.5 cm size
plagioclase phenocrysts are characteristic. It occurs
mainly at the Magas prospect (Figure 4.4a) located in the
southern part of the project area.
Indophil Section 07 14/3/02 5:54 PM Page 55
Andesite Porphyry Diatreme - Interpreted by Indophil
to be a diatreme, this somewhat circular breccia body
hosts the widespread hydrothermal alteration at Magas
and part of the Magas vein system. It contains abundant
fragments of altered megacrystic andesite porphyry and
vein material and is itself altered and transected by quartz
veins. Altered megacrystic andesite porphyry fragments
dominate the core and the margin is dominated by
fragments and blocks of basement andesite and diorite
particularly on the south and southwest margins. Some
vein and silicified rock fragments contain significant
amounts of covellite and chalcocite.
Sediments - Roadcut exposures on the ridge between
the headwaters of Katungbuan and Noli’s Creeks show
unsorted conglomerate containing angular to rounded
fragments including altered rocks.The dominant clasts are
of basement andesite and diorite.
Limestone - Limestone outcrops found in the NW of the
project area at Pagtulian Prospect and Nocnocan mining
area (just off the property) cap the volcanic sequence.
Field inspections made during the current assessment
suggest that they are cut and altered by the gold
mineralising event.
Hornblende-Biotite Dacite Porphyry – Although
generally fresh or slightly chloritised, some areas show
minor clay-pyrite alteration.This suggests that although
they are quite young, they may also be just younger than
the mineralisation
Biotite-Hornblende-Andesite Porphyry - This rock type
is sourced by the very young (300,000 yr.) volcano at
Mt. Kinasing, just east of the area.This material forms the
topographic highs that reach 1800m in elevation. A
deposit of this post-mineral pyroclastic material blankets
the northern part of the Magas mineralisation.
Three steep, NE dipping, northwest trending fault zones
dominate the geology (Figure 4.4b).They include the Manat
River Fault (east), the Magas-Katungbuan structure (central),
and the Panuraon structure (west).These lineaments are
defined by deformation zones and deflected topographic
features such as rivers and elevation contours. Although the
Magas structure has the weakest surface expression, it
contains the strongest mineralisation defined to date.
In the very NW corner of the property near Nocnocan and
Pagtulian, NW dipping shallow thrusts interpreted by
Indophil appear to overprint the steep structures. Unraveling
the structural history in this area will be an important part
of exploration yet to be carried out here.
MINERALISATION & ALTERATION
Three major types of mineralisation and their associated
alteration occur on the property:
7. Independent Geologist’s Report
Gold-Base metal Veins
Gold mineralisation is associated with the major NW
structures and forms the Katungbuan, Pagtulian and Magas
vein systems. It characteristically contains large amounts of
sulphides sometimes greater than quartz, including pyrite,
sphalerite, galena, and rarer chalcopyrite. It is more lode like
than true banded, epithermal quartz veins. Sulphides and
silicates replace the host rocks forming breccias and
disseminated and stockwork sulphide veinlets.The
mineralised breccia fragments are commonly surrounded by
a mineralised matrix, suggesting that there have been
successive pulses of metal-bearing hydrothermal fluids.The
alteration in the heart of the lode is dominated by intense
silica flooding.This zone is associated with the highest grades
of gold and basemetals. Farther out on the margins, the
alteration progressively becomes more clay-rich (white clay,
possibly of the kaolin family), with chlorite being stable on
the outer edges of the lode. It appears that the amount of
silica, sphalerite and galena is directly proportional to the
amount of gold present, such that clay-pyrite-only
mineralisation tends to be low grade in nature. Other nearby
epithermal gold occurrences are located at the small-scale
mining areas of Panuraon, Nocnocan, and Saraban-Inopuan,
all located outside of the Manat Project area.
Porphyry Copper
Classic porphyry Cu style mineralisation and breccias are
associated with diorite and andesitic breccias at Magas (see
reference to drill hole MNTD14 in Section 4, page 22) and
Taglayag prospects. Stockwork quartz-pyrite-chalcopyrite
veinlets occur in a groundmass of sericite and clay-pyrite
altered intrusive. In the transition zone, from oxidised rock
to fresh rock, chalcocite/covellite replacing chalcopyrite is
common and can coat pyrite.This is the common assemblage
of supergene orebodies in Arizona and Chile. Field inspection
by the author suggests that this soluble type copper
(amenable to SXEW) is a very limited zone. Even though Cu
grades intersected to date are low (~0.2%), they are gold-
rich, being the same or higher level than Cu.There has not
been systematic exploration for this type of mineralisation,
leaving very good potential for the discovery of significant
mineralisation. Fluid inclusion analysis by WMCE on
stockwork veins at Taglayag and Magas gave homogenisation
temperatures of about 500° C and freezing point depression
suggestive of highly saline fluids.These are typical porphyry
copper signatures.
Acid Sulphate
This alteration and mineralisation style (sometimes referred
to as “advanced argillic”) is very common on the property. It
is well developed in the andesite porphyry diatreme
(breccia). It is thought to be generated by very corrosive and
acidic hydrothermal fluids, generally destroying all original
textures.The diatreme breccia also contains fragments of
porphyry copper and gold vein mineralisation, suggesting that
it is the same age as or younger than the mineralisation.
55
Indophil Section 07 14/3/02 5:54 PM Page 56

7 I n d e p e n d e n t G e o l o g i s t ’s R e p o r t c o n t ’d

Manat cont’d

Therefore, there could be a genetic connection between
gold-base metal veins, porphyry mineralisation, and the acid
sulphate alteration. If correct, this interpretation could have a
big implication for exploration potential and how it is
conducted.
Clay and silica occur with disseminated and veinlet pyrite.
Chalcopyrite is a common accessory. Massive silica-pyrite
forms the upper levels of exposed alteration, whereas the
clay progressively increases at silica’s expense with depth.
Metal grades encountered to date are similar to the
porphyry copper mineralisation, although some veinlets
contain sphalerite and galena, suggesting a relationship with
the gold mineralisation.
Skarn/Contact Metamorphic
Limited chalcopyrite, magnetite, and minor gold
mineralisation can occur at the contact between basement
basaltic andesite and the quartz-diorite.
Manat Geological Environment
This area is a classic volcanic arc sequence, with multiple
ages of many styles of geology and mineralisation.There are
developing volcanic sequences throughout the geologic
record, from intrusions, lava flows to tuffs. Continual tectonic
collision has provided pathways and helped focus
hydrothermal fluids resulting in the development of
porphyry, vein and disseminated gold and base metal
deposits.There is a suggestion that the veins and
disseminated acid sulphate mineralisation may have
overprinted and upgraded earlier low-grade porphyry
mineralisation.This complicated geologic environment should
bode well for exploration here.
NEARBY DEPOSITS
The area around Manat (the Masara mineral district) has
many diverse types of gold and base metal deposits the most
important of which are listed in Table 7.2 below.
Additional comments and references follow:
King King
A porphyry Cu-Au deposit reportedly containing
398.1 million tonnes at 0.341% Cu, 0.516g/t Au.
Calculations according to North American reporting
standards 1997; not to JORC Code.
Amacan (North Davao)
A Miocene age porphyry Cu-Au mine that has closed and
being sold. It is 10 km to the south of Manat on the
projection of the Magas structure and the dioritic host
intrusive sits on the southern edge of the Lake Leonard
caldera/maar complex. There is a published report of a total
pre-mining resource of 116 million tonnes @ 0.34% Cu and
0.4g/t Au; not to JORC Code.
Sabena
This is a porphyry Cu-Au with a reported resource of 75
million tonnes at 0.44% Cu, 0.5g/t Au. Calculation according
to Philippine reporting methods, 1980; not to JORC Code.
Masara
The deeper part of this vein system contains base metal-rich
gold veins similar to Manat and 400m deep shoots. From
1976 to 1982 173,000 ounces of gold was produced. In 1986
estimated ore reserves were reportedly 1.4 million tonnes at
9.36g/t; not to JORC Code.
PREVIOUS EXPLORATION
Other Companies
According to Indophil’s Exploration Manager, exploration is
reported to have been conducted to the immediate
northeast part of the property, focusing on porphyry Cu
potential.The first major exploration effort was conducted
by ALDEVINCO’s previous partner,WMC Exploration
Corporation (WMCE), although an undocumented report
suggests that Placer Dome of Canada may have worked in
the area for a short period.WMCE conducted a

Table 7.2 Significant Mineral Deposits in the Masara Mineral District, SE Mindanao
Deposit Type Size (Mt) Au (g/t) Cu (%) Comments
King King Porphyry Cu-Au 398.1 0.52 0.34 Undeveloped
Amacan Porphyry Cu-Au 116 0.40 0.34 Partly mined, C&M
Mapula Porphyry Cu-Au 78 0.40 0.36 Undeveloped
Sabena Porphyry Cu-Au 75 0.50 0.44 Partly mined
Masara Epithermal vein 1.40 9.36 Partly mined C & M
Hijo Epithermal vein 0.60 5.50 Open pit production

Note: Pre-mining size and grade estimates. C&M = Care and maintenance. Mt = million tonnes. Not to JORC Code.
Prepared by Indophil Resources NL for ESI, July 2001.

56
Indophil Section 07 14/3/02 5:55 PM Page 57

7. Independent Geologist’s Report

comprehensive initial exploration program, including
mapping, stream sediment sampling, soil sampling, ground
magnetics and IP which identified four major prospects from
north to south: Pagtulian, Katungbuan,Taglayag, and Magas
(Figure 4.4b). Six diamond holes totalling 1,560.35 metres
were drilled by WMCE, primarily targeted at geochemical
and IP anomalies. Holes MNTD 1-3 intersected porphyry-
style Cu-Au mineralisation at Taglayag prospect (already
referenced above) and holes MNTD4-5 drilled high sulphide-
bearing gold veins at the Katangbuan prospect.
MNTD 6,WMCE’s last and only hole drilled at the Magas
Prospect achieved the best results of their exploration
program. It intersected significant base metal sulphide-gold
mineralisation in eight separate intersections over a
cumulative down-hole interval of 94m, including individual
down-hole intersections of 24 metres at 4.53g/t Au, 9.70g/t
Ag, 0.33% Pb, 1.08% Zn. and 51 metres at 2.93g/t Au,
10.29g/t Ag and 0.38% Zn. WMCE completed detailed
petrological and fluid inclusion studies on these drill holes.
Not long after completing this drilling,WMCE withdrew
from the J.V. after making their corporate decision to
withdraw from all exploration in the Philippines, other than
the Tampakan Cu-Au Project. Indophil estimates WMCE
expenditures of $800,000 on the Manat J.V.
INDOPHIL EXPLORATION
General
Indophil's exploration commenced in December 1998
immediately after execution of a Heads of Agreement with
Aldevinco. Building on WMCE’s extensive stream and soil
geochemical and geophysical data, detailed mapping began to
generate a comprehensive exploration framework.This slow
and difficult work in the heavily vegetated, steep, and isolated
terrain was required since the available geology was not
accurate enough to determine priority areas other than
Magas, and therefore could not focus exploration funds.
Compilation of old and new data showed the following:
Indophil's statistical analyses of WMCE’s soil geochemistry
data showed that gold was widespread and scattered in
the soils, similar to zinc. Copper did outline some circular
anomalies, possible related to porphyry mineralisation
(Figure 7.2). Arsenic was concentrated in the south over
the acid sulphate alteration and to the north of

Figure 7.2 Manat Project - Soil Geochemical Anomalies

0 1

Kilometres

PAGTULIAN
PROSPECT D4-5
ppb
?

>160
?

91-160 TAGLAYAG
?
Gold

Magas PROSPECT
?

Vein Zone D1-3

61-90
?

D6-22
19-60

6-18 MAGAS
PROSPECT
D14
<5

0 1

Kilometres

PAGTULIAN
PROSPECT D4-5
ppm
?

>500
?

TAGLAYAG
?
Copper

281-500 Magas PROSPECT

?

Vein Zone D1-3

?

181-280 D6-22

81-180
MAGAS
<80 PROSPECT
D14

Prepared by Indophil Resources NL for ESI, February 2002

57
Indophil Section 07 14/3/02 5:55 PM Page 58
7 I n d e p e n d e n t G e o l o g i s t ’s R e p o r t
Manat cont’d
Katangbuan. Lead being much less mobile in the
weathering environment was a better indicator of the
known mineralised structures, which was later confirmed
by drilling. Lead anomalies outline the Magas structure
for at least further 500m past the last drill intersection,
and possibly highlight a link to Katungbuan Prospect.
Magas (Drill hole MNTD 6) was the best area for high-
grade mineralisation with potential for significant strike
length, both to the north and to the south through and
beyond the highly altered breccia pipe.
Katungbuan Prospect was potentially on the Magas trend,
3 km to the northwest.
Pagtulian was possibly on the structure that controlled
the Panuraon mine area, suggesting the potential for
another parallel zone of mineralisation.The complicated
structure and extreme terrain meant that more
detailed work would be needed and it would proceed
more slowly.
Taglayag was lower priority porphyry mineralisation,
but could be of interest at a later date. It certainly
had unresolved potential for vein gold along the
Manat structure.
Based on these conclusions, the Magas trend was the focus
of exploration.
Magas Prospect
General
Mapping, extensive channel sampling and two campaigns
of diamond drilling have been completed here. It was
recognised from WMCE hole MNTD 6 and the mapping that
subordinate crossing splay structures were developed off the
main vein trend.Therefore an optimum drill azimuth was
calculated to be 220° and –60° inclination, rather the due
south direction chosen by WMCE, which in part yielded an
artificially wide, oblique intersection.To date Indophil has
completed 16 diamond drill holes for a total of 2832m of
HQ & PQ coring, and surveys were done with single-shot
down-hole equipment. Deviations are not great. Hole spacing
is generally 50-100, but up to 200m (Figure 4.5). Core
recoveries are generally good. Digital core recovery data is
only available for D7-D12 and averages 81.15%. However
there are some zones where recoveries are poor, a
situation not uncommon in clay-rich rocks. Although data
is not available for the very recent second drill campaign,
the author’s inspection of the drill core revealed
nothing dramatically different, and in fact recoveries may
have improved.
58
c o n t ’d
Drill Results
Significant intersections from drilling at Magas are tabulated
in Table 7.3 and representative cross sections shown in
Figure 4.6. Drill holes MNTD7, 14, 19 and 21 have been
inspected on site, and all the geological and assay cross
sections have been reviewed.
The following points can be made:
The main Magas vein maintains a consistent 5-15m
estimated true width over a 1km length.
Only a few sections have down-dip pierce holes.Thus
down dip continuity is less known, but adjacent sections
suggest it is good.
Gold grade is less consistent due to lack of drill holes, but
maintains an approximate 1-5g/t Au average, with some
intersections being > 9g/t.
The variation in grade may be due to a number of factors:
Near surface intersections are oxidised, with some
being low grade (MNT 15 and 19).They contain
gossan, which may be leached of gold and basemetals.
This needs to be confirmed by further deeper drilling.
If the gossan represents pyrite only, with no base
metal sulphide, the fresh material could still have
low grade.
The best grades and widths seem to be near the
intersection of the main structure and the splays, thus
defining shoots.The current drilling density does not
allow shoot definition and the lower grade
intersections may be on shoot edges.The best
intersections appear to be either within porphyritic
andesite or on its contact with basement lithologies.
Where the vein system cuts through diorite, its
development and grade seems weaker.
The overall mineralised envelope can be as wide as 100m
and appears to contain both sub-parallel high-grade veins
and wide low grade stockwork and disseminated sulphide
zones commonly containing 0.2-0.5g/t.The gold appears
to be concentrated in quartz veinlets and small masses
that carry sulphides.
An inspection of grade histograms indicates that the
high-grade and low-grade zones seem to form robust,
statistically viable populations.There is not much visible
gold and very high grades are unusual. One 300g/t
value was cut to 50g/t, considered to be more
statistically representative.
The regularity of grade within common rock types suggests
that even in zones of lower core recovery, there has not
been preferential loss or upgrading of metal values.
Indophil Section 07 14/3/02 5:55 PM Page 59

7. Independent Geologist’s Report

Sphalerite and galena are coarse grained and relatively
high-grade, commonly at 1-3% levels, although there are
some >20% Zn intersections.They are much coarser than
most volcanogenic massive sulphide (VMS) bodies.This
suggests good metallurgical characteristics.
Minor copper is generally in the form of chalcopyrite,
which should not interfere with cyanidation if ever used
to recover gold.
The results show that this is a gold and base metal
deposit, all with potential value.
The deposit is open to the north and probably to the
south.The southern step-out hole, MNT 14 (420 m south
of MNTD9), may have intersected the edge of the Magas
zone in the top of the hole, but here it is low grade.
Drilling to date has confidently defined the mineralised
zone over a distance of 1 kilometre.
This same hole intersected a down-hole length of 227m
@ 0.19% Cu and 0.30g/t Au in porphyry style stockwork
zone in diorite and andesite breccias. It is also
overprinted by the acid sulphate alteration assemblage.
The vertical range of known mineralisation within the
main vein system extends from outcrop at ASL 950m to
the deepest intersection in MNTD6 at ASL 600m, a
vertical distance of 350m.The mineralised trend continues
towards the Katangbuan prospect, some 1.8km past the
most northerly hole MNTD19.The potential in the very
northern end may become limited due to lower
elevations (more erosion) and restricted vein
development in basement rock types.

Table 7.3 Significant Intersections for the Magas Vein System

Hole No. Depth Depth Interval Gold Silver Lead Zinc Gold
From (m) To (m) (m) (g/t) (g/t) (%) (%) Equiv. (g/t)
MNTD6 76.00 100.00 24.00 4.53 9.70 0.33 1.08 6.42
including 78.40 82.00 3.60 8.86 18.57 1.41 4.37 14.90
including 84.00 86.00 2.00 17.55 14.35 0.38 1.19 20.99
including 94.00 96.00 2.00 12.87 13.60 0.09 0.26 14.80
193.00 244.00 51.00 2.93 10.29 0.14 0.38 3.94
including 204.00 214.00 10.00 7.23 11.38 0.44 0.92 9.41
including 216.00 217.00 1.00 17.00 376.50 0.03 0.10 26.02
MNTD 7 23.30 31.85 8.55 2.65 10.33 0.66 1.15 4.62
including 26.85 28.20 1.35 10.04 46.04 2.99 5.71 19.19
50.30 50.90 0.60 8.02 10.00 0.73 2.09 11.49
109.00 118.90 9.90 7.16 15.50 1.18 2.42 11.29
including 110.90 114.20 3.30 14.14 25.54 2.44 4.39 21.82
192.60 193.70 1.10 8.67 13.80 0.14 1.23 11.24
205.00 209.30 4.30 7.43 36.12 0.10 0.48 9.96
including 206.40 207.90 1.50 18.68 74.69 0.26 1.26 23.81
MNTD8 130.00 133.00 3.00 2.25 12.90 0.07 0.27 3.41
141.00 149.00 8.00 1.49 10.60 0.16 0.82 2.93
158.00 159.00 1.00 14.75 5.60 0.04 0.08 16.64
MNTD9 181.20 189.00 7.80 5.40 20.55 0.44 1.84 8.84
MNTD10 51.80 58.00 6.20 10.86 22.11 0.66 1.50 14.22
including (uncut) 53.00 54.00 1.00 319.95 204.40 1.86 4.96 363.79
81.10 81.70 0.60 17.61 15.00 1.21 2.21 22.60
90.30 106.00 15.70 5.26 15.74 0.58 4.45 10.96
including 95.00 98.00 3.00 10.21 15.97 0.91 12.42 23.89
MNTD11 80.00 93.00 13.00 1.23 6.80 0.50 0.59 2.44
MNTD12 149.70 151.00 1.30 4.16 8.81 1.60 2.88 8.30
MNTD13 73.00 76.00 3.00 2.54 8.10 0.13 0.29 3.65
219.00 252.00 33.00 2.32 11.91 0.36 0.83 3.82
MNTD14 76.00 78.00 2.00 2.37 1.30 0.04 0.09 2.84
105.00 110.00 5.00 1.46 2.02 0.02 0.06 1.99
MNTD15 26.70 34.30 7.60 0.65 42.73 0.16 0.13 1.85
MNTD16 71.00 92.00 21.00 2.77 46.27 1.25 2.51 7.04
including 76.00 91.00 15.00 3.54 57.40 1.51 3.01 8.71
MNTD17 114.00 132.00 18.00 1.70 11.30 1.49 1.78 4.60
including 126.10 132.00 5.90 2.15 26.14 4.30 4.86 9.84
MNTD18 38.00 68.10 30.10 2.60 24.10 0.33 0.14 3.76
including 55.00 65.00 10.00 5.39 13.56 0.28 0.34 7.03
MNTD19 26.00 27.00 1.00 9.37 73.20 - - 11.73
MNTD21 117.00 133.30 16.30 2.75 53.20 1.74 2.85 7.86
MNTD22 66.90 154.00 87.10 0.90 10.17 0.25 0.33 1.70
Note: Intersection selection at 1g/t gold cut-off. Upper assay cuts of 50g/t gold and 100g/t silver applied.
Gold equivalent grades are based on the following 1 March 2001 NY (Au), Perth Mint (Ag) and LME (Cu, Pb, Zn) approximate cash
metal prices: Gold US$297/oz, Silver US$4.53/oz, Copper US$1,535/tonne, Lead US$482/tonne and Zinc US$785/tonne.
Prepared by Indophil Resources for ESI, March 2002. 59
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7 I n d e p e n d e n t G e o l o g i s t ’s R e p o r t c o n t ’d

Manat cont’d

Sampling Procedures and Assay Statistics in gold values above 5g/t with McPhar values averaging some
5.1% higher than ALS-Chemex. Within this range, between
The drill core sampling procedures have been described by
5 and 10 g/t, McPhar values are a bit lower, averaging -5.5%.
the Indophil’s Director of Exploration: “Where possible, all
There really is only two McPhar values out of the 63 (3.2%
drill core[s]… [were] sampled to geological (lithological or
of the total) that are markedly higher: an ALS value of 9.57g/t
alteration) boundaries[,] with mineralised veins, stockwork
was reported by McPhar as 13.10g/t, a +36.9% variance and
zones and zones of moderate to strong hydrothermal
an ALS value of 228.00g/t was reported originally by McPhar
alteration split sampled using a diamond saw. A maximum
as 256.97g/t, a +12.7% variance. It is not uncommon for
sample interval was initially set at 1m but then expanded to
outliers like these to occur in a small proportion of samples,
2m in later holes taking into account assay data and visual
particularly in high grade samples.The 256.97g/t value has
observations. Unaltered material was usually chip sampled
been cut to 50g/t (above), so it has no impact. As
over a 5 metre interval. A half core sample was sent to the
commented above, this population is also too small to be
assay laboratory providing a very large volume sample, which
statistically robust. However it does suggest that other than
should have improved sampling statistics. Samples were
two samples, there are no significant differences between
crushed and pulverised at McPhar’s sample preparation
laboratories, that the McPhar results are quite acceptable,
facilities in General Santos and pulps sent to Manila for assay
and that the comparison gives confidence in Indophil’s
for Au, Ag, Cu, Pb, Zn. Drill hole assay and geological
reported values.The type of differences seen here are quite
databases were established in MS-Access and data plotted
normal when comparing different laboratories.With regard
using Micromine G-Pick software.”
to silver and the basemetals, the data shows good agreement
Indophil’s assay statistics show that high-grade assay spikes between laboratories over the analysed ranges.
are rare, suggesting that a “nugget affect” will not be a
problem at Magas. Indophil has used top-cut factors of 50g/t 20.00
Manat Au pulp re-assay ALS-Chemex V’s McPhar

for gold and 100g/t for silver, based on the assay Series1

distributions and the general lack of multi-ounce intervals.

A review of the data suggests this is reasonable and is
15.00
supported by the assay statistics.
Au(McPhar) ppm

Check Assays
10.00
During the WMCE exploration, assay checks on hole
MNTD6 were carried out both by inserting standard
samples during sample submission to the McPhar laboratory
and by re-assaying samples with significant grades at another 5.00

analytical laboratory in Australia.

An internal program of re-assaying 99 selected stored 0.00

course reject samples from 5 drill holes (MNTD9-13) was 0.00 5.00 10.00
Au(ALS-Chemex) ppm
15.00 20.00

completed by Indophil in order to check on the repeatability

of assay results (sample variance). A review of the data
In addition to these check assays, the author independently
shows that repeatability is good for silver, the base metals,
re-sampled two intervals in Indophil's drill hole MNTD21
and gold up to approximtely 10g/t. Above this level of gold,
during the field inspection. Although not a comprehensive
there is some scatter of the 8 available values, which show
coverage, it was designed to sample a variety of grade
an average decrease of 4.3% from the original value, however
ranges and materials. Quarter core material was sent to
the range can be as much as 30% above or below.The
the McPhar laboratory in Manila, so that results could be
population is too small to give a statistically viable result,
compared directly with the original assay values.Table 7.4
however such scatter is not uncommon at high grades in
opposite shows good repeatability, considering that the
gold orebodies and is quite acceptable. Indophil’s application
original assays are based on half core samples, and the check
of a top cut limits any major affect.
sample used new quarter core material. Gold has relatively
In order to check the quality of the McPhar analyses, low variance. Particularly, there is no major decrease in
Indophil sent 63 stored pulp samples from selected drill core values in the new sampling.The basemetals show larger
intervals to ALS-Chemex Laboratories in Brisbane for swings, due to the blebby and string style mineralisation
referee analyses. A plot of gold values from the two being more susceptible to smaller volume sampling of
laboratories is seen in the inset following. The graph shows quarter core.These results support Indophil's decision to
a nearly straight line comparison below 5g/t, with McPhar drill and assay larger volume core.
results 1.2% above ALS-Chemex.There is acceptable scatter

60
Indophil Section 07 14/3/02 5:55 PM Page 61

7. Independent Geologist’s Report

Drill Core Testing
No metallurgical bench tests have been conducted to date.
RQD measurements have been made routinely and
would provide a valuable database for any future ground
stability studies.
Resource Estimation
Indophil’s Director of Exploration, Chris Middleton, a Fellow
of the AusIMM with the required experience in the
estimation of Mineral Resources and Ore Reserves (as
required by Clause 9 of the JORC Code), has produced the
Magas resource estimate (see Table 4.4). Individual
intersections of at least 1m down-hole length ≥ 1 g/t were
calculated by using the weighted average of included core
lengths. Outlying values, not farther than 5 metres down-hole
length from the main intersection, were included if they
averaged ≥ 1 g/t.Top-cut factors have been discussed above.
As an independent check on the intersection calculation
method and the veracity of the reported information, the
author recalculated several intersections in MNTD07 and
arrived at the reported values. Indophil’s calculations use a
cross-sectional method, with drill hole data projected on to
cross-sections. Given the limited down-dip information,
intersections were projected only 25m in the dip direction
either side of the projected hole axis, equating to an average
net 75m R.L vertical distance. Since continuity is much better
along strike, the digitised outlines of intersection blocks were
projected halfway to the adjacent section, generally 50m.This
estimation qualifies as an Inferred Mineral Resource according
to JORC Code, therefore a global inventory of metal with in
the Magas mineralised zone.The 100m spaced drilling does
not allow the definition of the internal characteristic of this
zone or shoot definition. Due to the widespread nature of
the drilling, the internal complexity of the Magas zone, lack of
S.G. data, no metallurgical recoveries, no mining recoveries,
no mining dilutions and no economic parameters applied, no
economic conclusions should be made from this estimation.
Rather, it is a guide to potential.
The author has reviewed the resource cross-sections and
the estimation methods.The methods are reasonable, the
definitions of the mineralised blocks realistic, and the good
strike continuity of the Magas Zone all allow the calculation
of an inferred resource according to JORC Code.
Environmental Issues
Baseline water sampling and a community survey (including
indigenous peoples) have also begun. Indophil partly funds a
nursery and local tree-planting program.The area has
undergone industrial logging, and the current forests are
generally secondary regrowth. Illegal logging is being done by
locals. Inspection of Indophil drill sites shows very good
rehabilitation, very clean area, and good vegetation regrowth.
The climate is very conducive to rapid vegetation regrowth.
Considerable effort has gone into limiting environmental
impact. Indophil’s use of a high capacity man-portable drill rig
has certainly reduced the impact of drilling activities. Special
sump pits were used to capture drilling waters and fluids.
The NW border of the tenement is the southern boundary
of the Mainit National Park, a reserve for Hot Springs.
Mining is currently underway in the Park at Nocnocan by
small-scale miners.
Exploration Potential
The Magas vein system is open in all directions. In the north,
younger dacite pyroclastics cover the mineralised trend,
making exploration more difficult, but possibly hiding its
extension. However, a new exposure 500m north of the
most northerly hole (an erosional window) was inspected
and appears to contain mineralised lode. In a recently
completed induced polarisation (IP) survey in this northern
area, McPhar Geoservices Philippines Inc has interpreted the
continuation of the Magas structure. Drilling will be required
to confirm the presence of the vein, and to determine its
grade, thickness, and accessability if under thick cover.

Table 7.4 Magas Due-Diligence Re-sampling

Samples Core Assays - McPhar (ppm) Variance (%)

Drill Hole From-To (m) Int.(m) Au1* Au2+ Ag1 Ag2 Cu1 Cu2 Pb1 Pb2 Zn1 Zn2 Au Ag Cu Pb Zn

MNTD21 115.00-116.00 1.00 0.32 0.33 4.4 5.2 59 105 882 1002 2578 3226 3.1 18.2 78.0 13.6 25.1

MNTD21 116.00-117.00 1.00 0.28 0.27 2.8 4.0 48 69 821 1308 1335 2825 -3.6 42.9 43.8 59.3 111.6

MNTD21 117.00-118.30 1.30 3.10 2.69 22.2 23.0 1245 854 1034 1079 11670 10535 -13.2 3.6 -31.4 4.4 -9.7

MNTD21 118.30-119.20 0.90 8.38 9.63 169.4 177.3 11820 8116 8582 5456 15100 8834 14.9 4.7 -31.3 -36.4 -41.5

MNTD21 127.00-128.00 1.00 1.84 1.70 14.0 12.9 909 791 3739 3460 10365 13030 -7.6 -7.9 -13.0 -7.5 25.7

MNTD21 128.00-128.80 0.80 0.43 0.44 6.4 7.4 427 416 4318 3701 868 6572 2.3 15.6 -2.6 -14.3 657.1

MNTD21 128.80-130.00 1.20 4.04 3.65 104.4 67.7 6101 4563 10388 9395 24990 20815 -9.7 -35.2 -25.2 -9.6 -16.7

MNTD21 130.00-131.00 1.00 4.62 7.07 148.6 144.9 5938 6670 62700 43500 86500 53250 53.0 -2.5 12.3 -30.6 -38.4

* Element 1 = Original Indophil half core assay

+ Element 2 = ESI quarter core assay
The data from all sources suggests there should be high confidence in drill hole assays and in the calculated intersections.
61
Indophil Section 07 14/3/02 5:55 PM Page 62
7 I n d e p e n d e n t G e o l o g i s t ’s R e p o r t
Manat cont’d
To the south, MNTD 14 is a 420m step-out and the main
vein could still be developed near that point, particularly
since there may be a structural deflection in that area.
McPhar’s interpretation of the IP data suggests the presence
of the vein structure in this area. More drilling is needed.
Thus, the total zone could have a strike length of more than
2 km.The mineralised zone is also open at depth, with in
most cases only one drill hole per cross section. It is clearly
a major deposit.
Other features of the Magas vein system that could impact
upon its future economic character:
The topography, although steep, appears not to create high
strip ratios, allowing open pit scenarios to be considered, if
the deposit proves to be economic. Gravity should also be
helpful, particularly for waste removal.The topography
should also be helpful for any water or waste disposal.
The gold-bearing quartz veinlets of the low-grade
stockwork zone can sit in softer, clay-rich material,
offering, in the opinion of the author, a potential upgrade
opportunity. Since gold grades may be preferentially
associated with these veinlets, screening may be able to
separate these harder veinlets, producing an upgraded
product. If this can be shown, then more metal could be
recovered, and bulk mining and much larger tonnages
might then be considered.This could have a significant
effect on economic modelling of any project. No work
has been done on this idea yet.
Katungbuan Prospect
Contoured Pb soil data suggests that the mineralised Magas
structure can be correlated with the mineralised zone at the
Katungbuan Prospect approximately 2 km to the north. Two
diamond drill holes by WMCE at this prospect encountered
narrow but significant intervals of epithermal mineralisation
in basement rock types, MNTD4 - 4.8m at 2.76g/t Au, 4.72g/t
Ag from 90.2m and MNTD5 –1.25m at 3.28g/t Au, 11.88g/t
Ag from 51.8m.This mineralised trend is confirmed by
anomalous values recorded in surface rock chip and channel
sampling including values 500m to the south of Katungbuan.
Past Exploration
The WMCE geochemistry and geophysics was discussed
above. Indophil has begun mapping, carried out some rock
chip and channel sampling of small scale mining areas.
The recently completed IP survey should better define
the Magas trend and help to locate high concentrations
of sulphidic mineralisation.
Exploration Potential
This area has residual potential for vein development,
particularly if there are more receptive rocks than just the
basement units thought to dominate this area.There may
also be potential for porphyry style mineralisation.
62
c o n t ’d
Pagtulian Prospect
The Pagtulian Prospect (Figure 7.3) is an area of significant
multi-element soil anomalies associated with small-scale
mining areas. The prospect is located on a strong NW
trending structure that passes through the Samico and
Panuraon gold deposits, located to the southwest (Figure
4.4b). As previously described, it is the western most of the
three Manat structures and is sub-parallel to the Magas
zone. It also coincides with an area of thrusting seen at the
Nocnocan mine area.
The field inspection showed widespread silica-pyrite
alteration with sphalerite and galena, not unlike the low-
grade stockworks of the Magas mineralised zone. In the very
northwest corner of the property, shallow dipping
limestones cap the volcanics and the mineralisation.They
were originally thought to be a younger post-mineralisation
unit or thrusted into position after the mineralising event.
However, massive sulphide gossan was located during the
field visit and there is mineralised limestone at the adjacent
Nocnocan mine.This suggests that the limestone is pre or
syn-mineralisation and potentially a new host rock or
control on metal-bearing hydrothermal fluids.
Past Exploration
The WMCE geochemistry and geophysics was discussed
above. Indophil has begun mapping, carried out some rock
chip and channel sampling of small scale mining areas.They
have just completed an initial IP survey to help define trends
and targets.
Exploration Potential
This area has considerable potential:
Little exploration done in the rugged terrain.
Many small scale mining areas.
Widespread sulphidic alteration and geochemical
anomalism.
Structural complexity could create, as well as hide,
deposits.
The limestone cap could host replacement deposits in
karsts and structures, similar to the world class Bingham
Canyon and the Tintic mining districts of Utah. In fact
the geology of this part of Manat is very like these areas
in Utah.
The limestone could also have acted as a hydraulic seal,
ponding underlying metalliferous fluids near the base of
the limestone.These would be difficult to see without
geophysical surveys or drilling and could easily have been
missed by the locals.
Indophil Section 07 14/3/02 5:55 PM Page 63

Figure 7.3 Pagtulian Prospect, Manat Project

7. Independent Geologist’s Report

Pagtulian
Prospect

SAMAR

LEYTE

MAP AREA
Inopuan-Saraban

Nocnocan MPSA
094-97-XI

1.10/4.40
0.55/-
0.70/2.70
1.60/6.90 3.40/43.80
1.40/8.90

Limestone 6.73/23.10 4.14/1.90

Quartz diorite Costan

0.45/1.99 Tunnel
12.00m @
Dark andesite 0.86/6.65

Strong hydrothermal alteration

14.90/7.30
Small scale mining/
hydraulicking sites

Vein/shear

1.10/4.40 = Au/Ag (g/t)

0 500

Metres

Indophil Resources NL February 2002

EXPLORATION PROGRAM AND PROPOSED

BUDGET
Year 1: ($833,000) Year 2: ($867,000) Magas: Infill and
shoot-definition diamond drilling of the Magas Vein Zone
between 50,000N and 51,000N to a depth of 700m RL to an
appropriate density to generate a measured and indicated
resource (3,800m) to JORC status. Project scoping studies to
cover resource estimation, geotechnical, metallurgical,
environmental, financial and community studies. Pagtulian
and Other Prospects: Geological mapping, soil surveys
(400 samples), IP surveying (12km), and diamond drilling
(1,000m) of selected targets Table 4.2, Section 4).
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Indophil Section 07 14/3/02 5:55 PM Page 64
7 I n d e p e n d e n t G e o l o g i s t ’s R e p o r t
LABO PROJECT
Indophil’s Labo Project comprises two adjacent properties,
Labo-Palado and Labo-De Jesus, the subject of separate
option agreements. Since their tenement status, exploration
history and geology differ, they are described separately
below, following a general review of the district.
DISTRICT GEOLOGY AND MINERALISATION
Located 30 kilometres east of the Philippine Fault Zone, the
Paracale Mining District is dominated by intrusives, volcanics,
and volcanic sediments (Figure 4.8). It is interpreted as an
obducted slab of oceanic crust composed of ophiolitic rocks
that surround a deformed, and domed, granodiorite
intrusion. The ends of this intrusion are fractured in what
appear to be mega-pressure shadows that are filled with
epithermal veins that form the high-grade orebodies.
To the south and west of this thrust surface, porphyritic
diorite and dacite intrude a sequence of andesitic
volcanics and andesitic sediments and black shales
(Universal Formation).
Regional rock types important to the geology of the claim
blocks include: 15 million-year-old intrusive diorites, and 2
million-year-old dacite porphyries that cut all rocks in the
Base metal and Iron Belts of the Universal Formation.The
youngest unit in the area, however, is the Mt. Bagacay
Andesite of Pliocene age.The dip slopes of Mt. Bagacay
proper are similar to the expected angle of repose of
pyroclastic flows, and suggest that neither deformation nor
tilting has occurred, making them very young indeed.
Indophil’s project areas lie on the eastern edge of the
Paracale mining district. It is the second most productive
gold mining region in the Philippines, reputed to have begun
as early as the 12th century, and produced an estimated 160
tonnes of gold, equivalent to 5 million ounces.The Longos
mine (currently on care and maintenance), near Paracale, 8
km to the north of the tenements, dominated the district
production. High-grade, narrow epithermal veins, grading 5-
15g/t, are hosted by the Paracale Granodiorite and adjacent
ultramafic rocks.
The area extending from Larap to Tabas contains many
smaller mines and prospects of both gold and iron ore. Some
of the better known deposits are: Exciban, Matanlang Cu-
Mo-Au porphyry (65 million tonnes at 0.35% Cu 0.05% Mo,
0.4g/t gold; ibid.), Paracale Nationale Mine (significant gold
production from 1936-1941), and the Paracale d’Oro Mine.
Andesite, diorite, and dacite intrusives within the volcano-
sedimentary Universal Formation generally host these vein
deposits. At Paracale Nationale, the Vallejo and Manila veins
varied from 500-1000m in length, were 1.5m wide and
contained zones grading 6-9g/t gold. Significant magnetite-
sulphide skarn mineralisation is associated with the deposit.
64
c o n t ’d
This is also the largest iron ore-producing region in the
Philippines, with the major production coming from the
Larap Iron Mine, 25 kilometres to the northwest of the
project area.The Bessemer Pit orebody is dominated by
magnetite with minor pyrite in a banded silica-calcium
silicate-bearing skarn, which formed at the contact between
andesitic volcanics and sediments. Key alteration minerals
include tremolite, scapolite, and garnet. Caleon reports that
the iron-ore body overlies a sulphide-rich skarn deposit that
contains 17 million tonnes of 0.42% Cu, 0.09% Mo, 0.3g/t Au,
and minor uranium, tungsten and bismuth.There are many
similar magnetite skarn prospects and old mines in the local
area, called the Base metal and Iron Belts.They are also
associated with copper, gold, molybdenum, and arsenic-rich
mineralisation, with anomalous bismuth, tungsten, and
uranium.These magnetite skarns are generally found at the
contact between diorite bodies and the Universal Formation,
and Cu-Mo-Au mineralisation is associated with porphyritic
diorites or dacites. Associated molybdenum and gold in the
iron skarns, implies a common origin for the skarn and
porphyry mineralisation.
ACCESS AND LOCATION
The De Jesus and Palado properties are located in
Camarines Norte Province, near the town of Labo.The main
Manila-Daet road cuts the De Jesus claim block and Palado is
north of the road. Access is very good, with gently rolling
hills dominating the terrain.There are numerous gravel roads
and walking trails.There are rice fields and coconut
plantations.
DE JESUS PROPERTY
TENEMENT INFORMATION
The De Jesus property is an approved MPSA covering an
area of 9.95 sq km, mainly south of the Manila-Daet highway.
Indophil has exercised an option agreement giving it 100%
equity in the property for a NSR production based royalty of
2.5% from future mineral production. Advance royalty
payments of $4,000 per annum are currently being made.
GEOLOGY AND MINERALISATION
Sediments dominate the claim geology (Figure 4.9).The
Universal Formation is generally a dark grey to black
carbonaceous mudstone that is locally calcareous. Indophil
exploration has also identified a greywacke unit of andesitic
composition that may be equivalent to the older Larap
volcanics. Andesite lavas and diorite intrusions are also
present. Massive pyrite and gossan bodies have been mined
for iron ore at Mayaman Prospect.
Skarn is also reported near the southwest corner of this
property. At Mabilo, 3km southwest of De Jesus, a
magnetite-garnet-wollastonite-sulphide skarn and gossan was
Indophil Section 07 14/3/02 5:55 PM Page 65
discovered for which a resource (not to JORC Code) of
400,000 tonnes at 2.0g/t Au was calculated from a limited
drilling program.The nearby Ortigas (Binit) Prospect is a
proximal garnet-rich gold skarn from which small-scale
miners are recovering visible gold. Both prospects appear to
be similar to the Mayaman occurrence.
Thrusts appear to have controlled the present positions of
many rock units.This situation here is quite different from
neighbouring Palado, where only the northern parts may be
affected by this thrusting. Field evidence seen on the due
diligence trip to De Jesus and from Indophil's work suggests
that the thrusts are younger than earlier steep structures
(see below).
The De Jesus property was visited during the due diligence
field inspections on the 20th of March 1997, and again on
11-12 September 2000.
Pael
During the 1997 visit, this vein system was inspected in one
exploration trench within andesitic volcanic wackes of the
Universal Formation. Outcrops of oxidised siliceous
sediments with gossanous stockwork veins were seen near
drill site D1 during the September 2000 visit. A due diligence
check sample of Indophil sample AA04517 was taken in
the trench above drill hole D3 yielded 5.19g/t compared to
the original value of 24.92g/t. Given the difficulty of locating
exactly the same sample location, this is an acceptable
result, confirming the overall anomalous gold levels reported
by Indophil.
A hill of massive grey silica was visited at Villa Fuerte.The
material lacks evidence of sulphide.
Mayaman
The remnants of the small pyrite producer on the De Jesus
property was sampled during the 1997 due-diligence visit.Two
grab samples of gossanous and fresh massive sulphide gave 0.51
and 1.22g/t gold, 3.0 and 24.4g/t silver, and 0.11 and 0.13%
copper respectively. It is likely that the numerous sulphide
bodies on the property represent distal skarn in the Universal
Formation associated with the nearby intrusive diorite.
Gaerlan
A small-scale miner’s operation was visited in 1997.They had
developed a 15m deep shaft with adjacent drives to exploit a
narrow vein of quartz-clay-pyrite generally less than 30cm
wide.The highest grades are reportedly associated with
galena. Material available at the surface at the time of this
visit was more sphalerite-rich, and assayed 2.23g/t gold,
25.4g/t silver, 0.23% lead, and 4.19% zinc. Interestingly, pyritic
wallrock waste assayed 1.23g/t gold.
7. Independent Geologist’s Report
On 11 September 2000 outcrops and drill sites were visited.
Intense surface weathering is present, with weakly weathered
black shales were observed in deep creek sections. Altered
sediments and andesite were observed south of Gaerlan.
Although the samples are not anomalous, this area warrants
further work.
Eko
This is an area of massive silica and quartz veinlet
development.There is only limited evidence of gossanous
disseminated sulphide. A due diligence sample was collected
and is anomalous in gold and arsenic (0.045 and 270ppm
respectively).
WEATHERING
Inspection of drill core and field visits suggests that the
region may have undergone lateritic weathering typical of
high rainfall tropical regions. Such profiles are characterised
by clay soils overlying mottled saprolitic, limonitic clays,
which overly saprolitic bedrock.Typically they lack significant
ironstone caps. Similar profiles were observed by the author
in the tropical regions of West Africa.
PREVIOUS EXPLORATION
A considerable amount of surface exploration has been done
here in the past, but not well documented.
A previous explorer completed extensive, shallow auger
drilling and obtained highly anomalous results in the soil
profile. Although Indophil obtained some of their data, there
is considerable doubt about the quality and effectiveness of
this work. Indophil only used it as a general geochemical
guide in the early days of this project. Indophil has
subsequently completed new stream and soil surveys to
much higher standards. (See below).
The previous explorer also drilled seven diamond drill holes
(806m) into various prospects. Information on hole LG1 has
never been recovered. Holes LG4 to LG7 drilled the margin
of a diorite east of the central andesite mass (see Figure
4.10 and Table 7.5) over a strike length of 250 metres.
Anomalous gold up to 1m at 1.73g/t was intersected in hole
LG6 in black shale and sandstone.
Pael
The previous explorer located an ENE striking stockwork
zone in the northwest of the claim group. Rock samples of
this zone gave gold values from 0.5 to 10g/t, including a short
trench across the southern edge of this zone averaging 6m
at 2.78g/t gold. Two diamond drill holes (LG1 and LG2)
were drilled at either ends of this zone and were separated
by approximately 800 metres. Hole LG2 intersected only
narrow widths of low-grade mineralisation at the western
end of the zone (Table 7.5).
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7 I n d e p e n d e n t G e o l o g i s t ’s R e p o r t c o n t ’d

Labo cont’d

Mayaman partly due to near surface enrichment, and this may be

Gossanous massive pyrite was sent to Larap Iron Mines for
iron ore, and the locals recovered gold from the gossan. The
author’s examination of previous exploration data suggests
that diamond hole LG3 was drilled here, but there are no
results available. Data is available from another company
which drilled 4 diamond holes into this sulphide skarn target
and intersected garnet, wollastonite, and pyrite-bearing skarn,
but gold values were generally below 0.5g/t (Table 7.5).
Gaerlan
Past exploration at this prospect includes one diamond hole
(LG7) that intersected 2m at 4.57g/t Au in massive pyrite.
INDOPHIL EXPLORATION
Since commencing exploration in 1998, Indophil has
completed mapping, multi-element stream sediment and soil
surveys and trenching over the De Jesus property.
Widespread soil gold and very high arsenic anomalies were
outlined. (Figure 4.10). Given the intense weathering
conditions, there is a possibility that the widespread gold is
supported by the distribution of grades in the diamond
drilling at Pael (see below). Such enrichment is not
necessarily bad, as very good grade open pit style orebodies
can be generated by such weathering. An excellent example
is Ashanti Goldfield’s Siguiri Mine in NE Guinea,West Africa.
Trends of the gold and arsenic do however parallel the
topography and interpreted structures of the area, so are in
part reflecting bedrock mineralisation.
The property appears to be divisible into two structural
domains: the northern part is dominated by WNW
structural zones that are reflected in the soil geochemistry
and the topographic contours.These include the Pael and
Eko Prospects.The southern domain appears to be a N-S
striking zone again reflected in the gold and arsenic soil
results and the topographic contours.The soil anomalies
extend at least one kilometre north of the Gaerlan prospect.
Sampling Procedures and Analysis
The procedures for sampling and assaying drill core were the
same as those described for Magas (on page 60).

Table 7.5 Significant Intersections for the Labo Project

Prospect Company Hole ID From To Interval Gold Silver
(m) (m) (m) (g/t) (g/t)
Pael Indophil LABD1 1.00 2.00 1.00 7.17 -
” ” 34.10 45.60 11.50 1.87 9.13
” ” incl. 34.10 40.00 5.90 3.16 2.62
” ” LABD3 42.40 47.06 4.66 1.41 3.15
” ” LABD9 14.29 16.00 1.71 2.66 18.57
” ” LABD10 30.71 36.70 5.99 4.87 16.61
” Avantgarde LG2 56.00 60.00 4.00 1.48 NA
Gaerlan Indophil LABD5 1.00 8.15 7.15 1.01 -
” ” LABD6 2.00 6.20 4.20 1.51 148.90
” ” LABD7 69.56 77.80 8.24 2.61 -
” ” LABD8 0.00 16.90 16.90 0.36 -
” Goldfields MGDF-7 66.00 70.00 4.00 4.57 28.30
Mayaman ” MDGF-1 75.00 85.00 10.00 - 4.20
” ” MDGF-2 4.00 47.00 43.00 - 4.60
Mahawanhawan GA-Eikon SDDH-9 9.45 11.28 1.83 2.49 -
” ” ” 15.24 16.76 1.52 5.91 -
” ” ” 21.34 22.86 1.52 10.60 -
” ” ” 28.96 30.79 1.83 3.42 -
” ” SDDH-11 19.51 22.56 3.05 2.33 -
” ” SDDH-13 24.38 26.21 1.83 2.18 -
” ” ” 30.78 32.92 2.14 3.11 -
” ” ” 40.84 42.67 1.83 4.35 -
Santa Ana ” SDDH-1 7.62 9.45 1.83 5.00 -
” ” SDDH-2 4.27 7.32 3.05 1.03 25.00
” ” ” 24.69 28.65 3.96 0.69 42.50
” ” SDDH-5 15.24 17.07 1.83 6.80 -
” ” SDDH-7 18.29 19.20 0.91 3.42 -
” ” ” 22.86 24.69 1.83 2.33 -
” ” SDDH-9 9.45 11.28 1.83 2.49 -
” ” ” 15.24 16.76 1.52 5.91 -
Prepared by Indophil Resources for ESI, July 2001.

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Indophil Section 07 14/3/02 5:55 PM Page 67

7. Independent Geologist’s Report

Pael
Trenching of this zone yielded encouraging grades and widths,
commonly around 8m at approximately 7g/t gold. The
original Indophil concept was to drill prospects with a track-
mounted RC drill. Unfortunately just prior to
commencement, the contractor sold the rig.The only
available local alternative was the more expensive and slower
triple tube diamond drilling technique. Consequently, only a
limited number of drill holes were completed instead of a
denser pattern of cheaper RC drill holes. A total of 544.70m
of PQ and HQ diamond drilling has been completed.The
cross sections, assay data, and drill cores from holes D1, D3,
D9, and D10 were inspected during the September 2000 visit.
The core shows strongly oxidised clay soils overlying
mottled saprolitic, limonitic clays.These grade down into
grey saprolite after carbonaceous black shales. This
sequence of shales is strongly foliated, and overlays a
relatively undeformed sequence of green andesitic wackes.
Two types of mineralisation were observed:
Grey clay and pyrite.This coexistence of clay and pyrite is
indicative of hydrothermal alteration, not the shallower
lateritic weathering seen in the holes.These zones seem
to be confined within the foliation, and are developed
over potentially economic widths.
Narrow steep dipping white quartz veinlets with
sphalerite, chalcopyrite, and galena.These cut the foliation
and are therefore younger.These are probably the
equivalent of the high-grade, base metal-rich veinlets
mined at Gaerlan by the small-scale miners. Good
examples in D1 at 54m.They are not developed over
economic widths.
Core recoveries for the Pael drill holes are generally good,
estimated to be 93.23%. However, there are minor zones of
quartz in clay with considerable core loss, but these are not
considered to be significant.Where there has been loss
within an intersection, only core values (no sludge data) have
been used to calculate intersections.
The intersections at Pael are somewhat disappointing, as
they seem to be lower grade than the nearest trenches (see
composite cross sections in Figure 4.11).There are two
possible influences on widths and grades: near surface
enrichment affects producing higher surface grades, and drill
holes intersecting the margins of shoots. In either case more
drilling is needed to accurately define the distribution of gold.
Gaerlan
On the basis of soil geochemistry, mapping, trenching/channel
sampling and Gold Fields hole MDGF 7, Indophil concluded
that the mineralising structures had N-S strikes, and dips
could be steep.Therefore holes were oriented E-W and
drilled at –60° to the East, opposite to the Gold Fields hole
that was drilled to the north at -20°. A total of 483.70m
were drilled in 4 holes.Triple tube PQ and HQ core barrels
were used.
Core recoveries for the Gaerlan drill holes are similar to
Pael, estimated to be 93.81%. However, there are also soft
zones with considerable core loss, but again, they are used
to calculate intersections.
The drill intersections show variable widths and grades
(Table 7.5).The correlation of the intersections is a little less
certain.The near surface intersections in Indophil holes D5-6
and Gold Fields hole MDGF 7 intersected gold-bearing
gossan after massive sulphide.The deeper intersection in
Indophil hole D7 is quartz breccia with a matrix of 5-10%
pyrite and is therefore different in character. It is felt that the
gossan intersections represent skarn or replacement
sulphides generated by the diorite intersected in hole D5.
Farther away from this diorite, the mineralised zone may be
more epithermal in character represented by the quartz-
sulphide breccia. If the author’s interpretation is correct,
then the dips of the mineralised zone are shallow, to the
West. However, there is really not enough data to be sure,
so resolution of lode orientation awaits more information.
Check Core Sampling
Representative assay intervals from one hole at Pael
(LABD10) and two holes from Gaerlan were re-sampled by
the author during the September 2000 field visit. Again new
quarter core samples were taken and sent to McPhar
laboratories in Manila, in order to maintain similar conditions
to the original sampling.The variance between the two sets
of data is quite acceptable, given that the analyses are on
different sample subsets (Table 7.6).

Table 7.6 De Jesus Due Diligence Core Re-sampling

Samples Core Assays - McPhar (ppm) Variance (%)
Drill Hole From-To (m) Int.(m) Au1* Au2+ Ag1 Ag2 Cu1 Cu2 Pb1 Pb2 Zn1 Zn2 Au Ag Cu Pb Zn
LABD10 35.70-36.70 1.00 8.55 4.47 33.5 24.3 343 286 1674 1534 1370 2212 -47.7 -27.5 -16.6 -8.4 61.5
LABD1 38.90-40.00 1.10 6.68 7.65 0.8 1.1 119 98 133 123 294 392 14.5 37.5 -17.6 -7.5 33.3
LABD7 74.30-75.90 1.60 5.21 6.25 0.5 1.2 144 279 70 45 125 226 20.0 140.0 93.8 -35.7 80.8
* Element1 = Original Indophil half core assay
+ Element2 = ESI quarter core assay

67
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7 I n d e p e n d e n t G e o l o g i s t ’s R e p o r t
Labo cont’d
EXPLORATION POTENTIAL
Pael
Tonnages of good grade material are probably limited here,
with the oxidised material being the largest potential
contributor. Fresh sulphide-bearing material seems to be of
lower grade and unknown metallurgical recovery
characteristics. RC Percussion drilling would be required to
define any possible shallow resources.The terrain is well
suited to such low cost exploration.
Gaerlan
A lack of comprehensive data limits an understanding of any
mineralised body.There is no question that there are good
grades here.The new geological observations to the south
and the gold soil anomaly that extends to the north of
Gaerlan suggests there is at least 2 km of total potential
strike length that could still host an economic deposit.
More mapping and trenching is required to improve
understanding here. It would be highly beneficial to get
access to an RC drill rig to allow a good enough density of
drill holes to determine continuity of intersections and
geometry of any mineralised bodies. It would also allow a
rapid evaluation of the remainder of the interpreted zone.
ENVIRONMENTAL ISSUES
Little primary forest remains within the property although
there is some secondary regrowth.There is currently
considerable harvesting of coconut palms for cheap
construction timber.
EXPLORATION PROGRAM AND PROPOSED
BUDGET
Indophil's exploration work program is given in Table 4.2
with a 2 year program costing $216,000.
PALADO PROPERTY
TENEMENT INFORMATION
The Palado property consists of an MPSA application in two
separate claim blocks covering a total area of 18.78 sq km2.
The Palado MPSA application has not yet been granted,
pending the formal cancellation by the Mines Adjudication
Board (MAB) of a previous operating agreement that lapsed
some time ago.
Indophil has an option agreement that will allow it to earn
100% equity in the property, for a consideration payment of
$20,000, annual payments of $25,000 and an exercise price
of $20,000 plus a 2.5% NSR royalty from any future mineral
production.
68
c o n t ’d
GEOLOGY AND MINERALISATION
The tenement geology (Figure 4.9) is dominated by pyroclastics
of the Mt. Bagacay Andesite and the carbonate-bearing
andesitic sediments of the Universal Formation.The lowest
most member is a dark grey to black carbonaceous mudstone
that is locally calcareous, and silicified near Mt. Bagacay. A
major diorite body (the Tabas Diorite), containing scattered
mineralisation, intrudes the Universal sediments. Its southern
contact zone occurs in the northern part of the claims,
where the UN documented magnetite-bearing iron skarns,
with very strong geochemical anomalies (see below).
Thrust tectonics does not appear to affect much of the claim
block, except possibly in the north at Tabas South Prospect.
Three prospects were visited during the due-diligence field
inspection on 19 March 1997. Since that time Indophil has
completed a reconnaissance geological and stream-sediment
survey, whose data were reviewed in Manila. A further field
visit was not deemed necessary.
Malacbang
This prospect reportedly consists of high-grade (>30g/t
gold), galena-bearing, narrow (<1m), banded, epithermal
quartz veins. Previous Indophil sampling of waste vein
material from one of many local high-grader shafts assayed
3.9g/t gold.
Mahawanhawan
The area around the microwave tower access road consists
of anatomising, oxidised, and fresh pyrite veinlets in clay-
pyrite altered andesites outcropping in the road base over an
observable width of 30m. Isolated Indophil rock samples
returned values of 0.7-0.9g/t gold and 16-54g/t silver. Further
sampling of surrounding clay-pyrite alteration during the
1997 due diligence field visit only returned low values of
gold (0.02-0.08g/t).This new style of mineralisation (low
quartz/high sulphide) recognised by Indophil during their first
visit, was only found, because of the road cut. It
demonstrates the need for systematic exploration on the
claims, and that mineralisation is easily hidden by the thick
vegetation and limited outcrop.There may be potential for
bulk tonnage mineralisation.
Santa Ana (Cabusay)
This prospect is at the site of small pre-World War II
American gold mine.The Americans dredged local streams
and mined oxidised ore from adits in weathered bedrock
underneath caps of silica-pyrite alteration, which are developed
throughout the claim block. Boulders of silica-pyrite material
are seen over many square kilometres. Sampling by Indophil
has so far shown these to be very low grade (0.16g/t gold),
but geochemically anomalous.These alteration ledges could
be the near-surface expression of deeper vein systems.
Indophil Section 07 14/3/02 5:55 PM Page 69

7. Independent Geologist’s Report

The Americans are reported to have mined vein material
underground.They purposefully destroyed the adits, in
advance of the Japanese invasion, and they have generally
remained closed. Some shallow diamond drilling has
intersected gold-bearing veins (see below).
PREVIOUS EXPLORATION
Tabas Zone
Over the years, nearly all exploration in the entire Palado
Project area has been directed towards testing of old
workings, or to outline small and dubious resources in the
soil profile, rather than conducting systematic programs
designed to identify coherent, and mineable bedrock
deposits. An exception is the reconnaissance program of the
UN that covered the northern edge of the claims. In this
area, the UN reported some of their highest and most
extensive gold and copper stream sediment anomalies.The
results are impressive. Five stream catchment areas, over a
strike length of seven kilometres, had 16 samples out of 57
above 500ppb (0.5g/t gold) and 9 samples averaging 3400ppb
(3.4 g/t). Although high gold stream sediments results are not
uncommon in high rainfall environments, these are an order
of magnitude higher and more extensive than other
anomalies in the remainder of the UN’s much larger,
district-wide survey. Only samples near the Paracale National
Mine are higher, but they are less extensive. Along the Tabas
Zone, copper levels in stream sediment samples are above
300 ppm, with three samples between 2700 (0.27%) and
5400 ppm (0.54%).
Malacbang
Poorly sourced information from Palado Mines indicates that
soil auger drilling at Malacbang outlined a 2000 x 1500 metre
anomaly greater than 300 ppb gold (Figure 4.9).This area has
been the focus of small-scale alluvial mining.The bedrock
source of this anomaly was not tested by past explorers. In a
1996 evaluation of the claim block, a mixture of seven out of
ten grab, chip and rock channel samples, results reportedly
ranged from 1 to 68g/t gold (averaging 21g/t), up to 151g/t
silver, and up to 10% copper.
Mahawanhawan
Another company drilled 165m in 5 shallow (12-55m), widely
spaced, diamond holes, generally 200-300m apart (Figure
7.4a). Some holes intersected narrow, high grade quartz vein
and disseminated pyrite gold mineralisation in andesites.
These results seem to be from selective intervals, and
continuous down-hole sampling has apparently not been
done.The 1996 surface channel sampling reportedly
obtained only modest results.
Santa Ana (Cabusay)
Eight shallow diamond drill holes (total 291m) were drilled
here by the same company, with similar narrow, high grade
results to Mahawanhawan (Figure 7.4b). Sampling of the
holes also appears to have been incomplete. Another
explorer reportedly completed some surface exploration
here in the late 1980s. Results of the 1996 sampling here
were reportedly low.

The UN recognised these results as being very encouraging, and

a detailed soil survey was initiated at Tabas prospect. Indophil’s
Philippine Exploration Manager reports that the samples were
never analysed, due to the termination of the project during
hostilities at the end of the Marcos regime. However, panning of
samples did get widespread gold in the soils.

What makes this anomalous zone even more interesting is

the fact that the 7 kilometre anomalous zone coincides with
the intrusive contact between the Tabas Diorite and the
Universal Formation, which hosts known magnetite skarn
occurrences and an abandoned iron mine at Agusan.
Geological observations from both the stream sediment and
soil surveys indicate extensive areas of silicified, black
mudstone in float.According to Indophil’s Philippine
Exploration Manager, diorite outcrops containing veinlets of
copper mineralisation are the focus of small-scale gold
miners.Throughout the district similar contacts host the
major magnetite skarn bodies.

No exploration appears to have been conducted by private

exploration companies prior to Indophil's recent program.

69
Indophil Section 07 14/3/02 5:55 PM Page 70

7 I n d e p e n d e n t G e o l o g i s t ’s R e p o r t c o n t ’d

Labo cont’d

Figure 7.4a - Significant historical drilling results from the Mahawanhawan Prospect

122…
48’30"
12’30"
14…

re e k SIGNIFICANT INTERSECTIONS (>2gt/Au)

M iC
a la c b a n g M u nt SDDH-13 Hole No. From - To (m) Intersection (m @ g/t Au)
(53.6)
SDDH-12 SDDH-9 9.45 - 11.28 1.83 @ 2.49
(11.9) 15.24 - 16.76 1.52 @ 5.91
21.34 - 22.86 1.52 @ 10.60
SDDH-11 28.96 - 30.79 1.83 @ 3.42
(30.8) SDDH-11 19.51 - 22.56 3.05 @ 2.33
SDDH-9 SDDH-13 24.38 - 26.21 1.83 @ 2.18
SDDH-10 (43.9) 30.78 - 32.92 2.14 @ 3.11
(24.4)
40.84 - 42.67 1.83 @ 4.35

KEY
significant (>1m @ >2g/t Au)
anomalous (>1 g/t Au)
0 300m
unmineralised
Telecom Tower (53.6) EOH-m
Indophil Resources NL February 2002

Figure 7.4b - Significant historical drilling results from the Santa Ana (Cabusay) Prospect

122…
49’

SIGNIFICANT INTERSECTIONS (>2gt/Au)

SDDH-6 Hole No. From - To (m) Intersection (m @ g/t Au)
(9.1)
SDDH-1 7.62 - 9.45 1.83 @ 5.00
SDDH-5 SDDH-5 15.24 - 17.07 1.83 @ 6.80
(54.9) SDDH-7 18.29 - 19.20 0.91 @ 3.42
22.86 - 24.69 1.83 @ 2.33
Santa Ana Mine

SDDH-7
y Cre e k
11’30"

(37.2)
g a ca
Ba
14…

SDDH-2
SDDH-8
(28.7)
(48.8)

SDDH-3
(32.0) KEY
SDDH-1 significant (>1m @ >2g/t Au)
(25.3)
anomalous (>1 g/t Au)
SDDH-4 unmineralised
(54.9)
(53.6) EOH-m

0 300m

Indophil Resources NL February 2002

70
Indophil Section 07 14/3/02 5:55 PM Page 71
INDOPHIL EXPLORATION
Indophil has completed initial geological mapping and a
multi-element stream sediment survey comprising 343
stream sediment samples, which covered an area of about
90km2. It has defined a number of coherent gold anomalous
catchments containing spiky, high-grade values (Figure 4.9).
Systematic follow-up sampling has not yet been completed,
although some very high gold values have been obtained in
rock samples.These preliminary results suggest the area has
good potential.
Mahawanhawan
Stream sediment results peaked at 1.522g/t gold.
Pinagbirayan (South Tabas Zone)
Up to 5.865g/t gold in the stream sediment survey, with
many samples > 10 % iron up to 25% iron.This reflects the
magnetite skarn environment. One rock sample in Palenas
creek assayed 6.6% Cu, 0.9g/t Au, and 52g/t Ag in silica-pyrite
alteration with chalcopyrite stringer veinlets.
Santa Ana (Cabusay)
Gold stream sediment results are generally greater than
100ppb, with a maximum value of 1.485g/t. Follow-up rock
sampling by Indophil confirm the anomalous geochemical
results with one sample reaching 2.695g/t gold. Some
samples also contain elevated basemetals.
No other work has been done, pending the granting of
clear title.
EXPLORATION POTENTIAL
The Palado property, like the Paracale District in general, is
well mineralised, and contains many different styles of gold
mineralisation.The variety of mineralisation styles, the
complex fault tectonics, widespread volcanics, and the strong
interaction with, and alteration of, calcareous sediments by
intrusives are very similar to Nevada in the United States,
particularly the Carlin Trend, Battle Mt., Round Mt., and the
Goldfield mining districts. Specifically, the silicified, black,
calcareous mudstones of the lower Universal Formation are
similar to the host rocks and alteration style of the Carlin
orebodies located in Nevada, USA.The association of
mineralised intrusions with flanking gold/copper-bearing
skarns is similar to the ore environment found at the
Fortitude orebody and the Cove McCoy deposit near Battle
Mt., Nevada, and at Bingham Canyon, Utah.The key elements
and alteration minerals associated with worldwide gold
skarns, particularly the Fortitude orebody, are reported in
the Paracale skarns, including bismuth, tellurium, arsenic,
scapolite, amphiboles, and garnets.
The high iron content of the Paracale skarn mineralisation is
also similar to the Tennant Creek and Cloncurry districts of
Australia. Late tectonic diorite and granite intrusions are
7. Independent Geologist’s Report
spatially associated with the skarn-like, hydrothermal
mineralisation at the Ernest Henry deposit, and at the Starra
and Osborne mines.
All the available information suggests that the Indophil
tenements contain the hallmarks of both gold-copper
porphyry-skarn environments and iron-rich hydrothermal
systems capable of producing quality orebodies.We could be
dealing with the exposed, southern margin of a large, zoned
porphyry Cu-Au hydrothermal system, with a possible,
mineralised internal intrusive (Tabas Diorite), nearby iron,
gold, and base metal skarns, and, outer gold-base metal
quartz vein systems. Poor exposure of bedrock could easily
hide orebodies, as lowland swampy areas cover the diorite.
The Matanlang Cu-Mo-Au porphyry prospect 20 km west of
the Tabas zone is indicative of this potential, together with
the many small occurrences known in the area, may
represent potentially unroofed, and as yet undetected
porphyry systems.
The best gold skarn targets may not be the magnetite bodies
themselves. Rather they are indicative of the general
mineralising environment.The sulphide rich portion of the
hydrothermal alteration near the magnetite zones would be
the most likely repository of gold and base metals.
The idea of an integrated, porphyry driven, hydrothermal
system potentially generating many styles of large orebodies
is new in the Paracale District.The fragmentation of the land
holdings has also inhibited systematic exploration.There now
appears to be an exploration opportunity that may
demonstrate the district’s true potential. Indophil has
secured a strategic position for both the current proposed
program, as well as future opportunities.Within the Labo
project area, there are already two identified areas of
mineralisation that have never been drilled: the Tabas gold-
copper skarn anomaly and the Malacbang soil auger gold
anomaly. Given the poor exposure, thick vegetation,
combined with very good geological characteristics, there
are excellent chances of discovering epithermal gold, bulk
tonnage sulphidic gold deposits, and Cu-Au skarns.There is
good potential for Carlin-style silica replacement gold
deposits in the calcareous members of the Universal
Formation sediments and for Cu-Au porphyry bodies in
diorites, where they are present on the project area.
ENVIRONMENTAL ISSUES
Refer to comments in Labo-de Jesus.
EXPLORATION PROGRAM AND PROPOSED
BUDGET
Indophil’s exploration work program for Labo-Palado is
presented in (Table 4.2).The proposed 2-year program is
estimated to cost $310,000.
71
Indophil Section 07 14/3/02 5:55 PM Page 72
7 I n d e p e n d e n t G e o l o g i s t ’s R e p o r t
BUNAWAN
ACCESS AND LOCATION
The Bunawan claim block in Agusan Del Sur Province is
located east of San Andres village, on the Butuan - Davao
concrete highway that services eastern Mindanao.The Away
Prospect area, the main zone of current, small-scale mining, is
accessed via a 7 km walk along a disused logging road.
This mining area is 5 km south of Banahaw Mining’s
Co-O gold mine.
TENEMENT INFORMATION
Indophil has an option agreement with the Camarin Mining
Corp. for outright purchase of an MPSA application covering
an area of 24.30 km2. Payments include a consideration fee of
$55,000, staged option payments of $110,000 over three
years, and a final exercise payment of $3,000,000 with no
royalty. Force Majeure has been declared in respect of
option payments and the option term, as a consequence of
the current title disputes before the MAB (refer to the
Solicitors Report - Philippines Tenements in Section 8).
GEOLOGY AND MINERALISATION
The regional geology consists of basement mafic volcanics,
probably up-thrusted oceanic ophiolites, and Miocene
andesitic tuffs, argillites, and limestones termed the Eastern
Mindanao Volcanic Arc.The tenements occur in a strongly
mineralised belt that stretches 100 km, and contains the
adjacent Co-O Mine (which had a reported pre-mining
reserve of 906,000 tonnes at 7.3g/t Au), numerous high-
grade gold prospects including:Tambis, Santa Irene, Sinugand,
Sinayugan, Masabong, Pasian, and the famous high-grader area
of Diwalwal some 60 km to the south, where there were up
to 100,000 people mining a reported 7 million oz gold
deposit. Small-scale mining at Bunawan has been going on
for a number of years, and at one time had up to 300
active miners.
The property was visited in March 12, 1997. Since the only
major change in the property was a stream sediment survey
and reconnaissance geological mapping by Indophil (Figure
4.12), for which data was reviewed in Manila in September
2000, a further field visit was not considered necessary.
The site inspection confirmed widespread hydrothermal
alteration consisting of clay-pyrite, massive silica-pyrite, and
silica-pyrite veins, containing up to 5-10% pyrite.
Of eight reported prospects within the claim block, three
were visited during the due diligence process:
Away Prospect
High-graders have mined on a small scale from shallow shafts
in material consisting of clay-silica-pyrite±copper sulphides.
Free-dig conditions exist, but the shallow water table
prevented the locals from mining below 15m. A small stream
72
c o n t ’d
flows within 50m of the deposit, and some water
management may be necessary during any drilling.The silica-
rich vein material is the target for the high-graders. A small
rod mill is used to grind this hand selected ore prior to
sluicing. Sampling during the due diligence visit confirms the
presence of ore grade gold. A sample of high-grader mill-feed
assayed 7.33g/t. A 1m channel sample of clay-silica alteration
containing pyrite veinlets assayed 2.28g/t gold. Eight other
channel and individual samples of broad silica-pyrite
alteration ranged from 0.36g/t to 1.74g/t gold.The
mineralisation is definitely epithermal in nature, and high
copper and arsenic contents suggest it may be of high
sulphidation type.
Camarin’s Camp
Exposed ore surfaces were not accessible at the time of the
1997 visit. Mining was temporarily suspended by water
problems and the locals were at that time driving to
intersect a new vein.
Plantation Prospect
A small excavation exposes an oxidised silica-pyrite vein.
There is currently no small scale mining here. Exposure is
poor and the best available material to channel sample gave
only 0.17g/t Au, however two dump specimens assayed 6.65
and 11.40g/t Au respectively.
PREVIOUS EXPLORATION
Exploration by a number of companies has been conducted
throughout the years, but they provided no results to the
landowner.
INDOPHIL EXPLORATION
In 1998 Indophil completed preliminary mapping and
reconnaissance rock sampling on the claim block in
conjunction with a stream sediment survey. Sample analysis
was deferred until recently due to non-resolution of title
conflicts. However, it was recently decided to analyse them
in order to help decide if the effort to secure the property
was really worth it.The results indicate several very gold
anomalous catchments (32 samples out of 204 ≥ 1g/tAu,
(Figure 4.12) in areas of intense hydrothermal alteration,
confirming observations made during the geological mapping.
ENVIRONMENTAL ISSUES
The area has undergone industrial logging, and the current
forests are generally secondary regrowth.There is a
considerable amount of illegal logging by locals.
EXPLORATION POTENTIAL
There is excellent potential for both narrow high-grade and
bulk tonnage, low-grade epithermal gold mineralisation of
both high sulphidation type and diorite porphyry/stockwork
type.The initial results suggest similarity with the Manat
property where excellent results have been achieved.
Indophil Section 07 14/3/02 5:55 PM Page 73
The fact that this area of extensive alteration is near a
recently producing mine, enhances the prospectivity of the
property. IP and gradient array surveys may be a useful drill
targeting technique.
EXPLORATION PROGRAM AND PROPOSED
BUDGET
Indophil has proposed a two year work program and budget
totaling $351,000 for the Bunawan Project (Table 4.2).This
program is subject to the favourable resolution of the title
situation and therefore assumes most of the expenditure will
occur in Year 2.
HINOTONGAN J.V.
ACCESS AND LOCATION
The EP is located within the Philippine National Oil
Company (PNOC) Palimpinon Geothermal Reservation in S
E Negros, some 50 km by road and track (2 hrs) from
Dumaguete, the capital city of Negros Oriental.The terrain is
extremely rugged, being bordered by the 1768m high
Guinsayawan volcano and the deeply incised Hinotongan
River gorge. Maximum relief in the property is 600m, ranging
for 600 in the Hinotongan riverbed to the top of the
silicified volcanic craters (see below).The due diligence field
visit identified an upgradeable old logging road within easy
reach of the prospect.
TENEMENT INFORMATION
Indophil has a Letter of Understanding for a farm-in and joint
venture agreement with the Philippine National Oil Company
(PNOC).The EP was granted in November 1997. With
statutory reductions it now covers an area of 89.69km2.The
agreement allows Indophil to earn 65% equity in the project
after spending a minimum of $US2 million. A two year
extension to the EP was granted on 10 January 2002.
GEOLOGY AND MINERALISATION
The Amlan-Hinotongan area (Figure 4.13) is well known for
the widespread and intense acid sulphate alteration. Silica-
pyrite-alunite bodies are developed along the Amlan Fault
over an area of 5 sq km, with individual bodies reaching 1x
0.3 km in size.The author visited this area on 6 September
2000.Very anomalous metal values are reported in published
literature in Kangbanong stream in pyrite-rich hydrothermal
breccia: 0.8g/t Au, 34g/t Ag, 0.3%As, 20g/t Te, 47 ppm Hg,
0.36% Bi, 8 ppm Mo.The levels of tellurium and bismuth are
exceedingly high suggesting bismuth telluride minerals are
present.They are very common with intrusive related
epithermal gold deposits.
Other areas of acid-sulphate alteration exist, including the
Malabo gold prospect explored by the UNDP and PNOC.
Published literature reports narrow quartz veinlets with
associated patches of acid sulphate alteration.The veinlets
assay up to 3.1g/t Au, 19g/t Ag and elevated copper values.
7. Independent Geologist’s Report
The Hinotongan property covers extensive and intense acid
sulphate alteration developed along the Hinotongan Fault
and its intersection with the Amlan Fault (above).The area of
this structural intersection is one of the most intensely
altered parts of the property, and it was inspected on 7
September 2000.The plagioclase porphyritic andesite is total
leached, leaving only quartz, alunite, and pyrite, the hallmark
of acid sulphate alteration.There are disseminated copper
sulphides in the form of chalcocite and covellite (probably
after chalcopyrite). Indophil reports that minor enargite has
been seen along the river. Enargite is the characteristic
copper mineral of acid sulphate Cu-Au deposits.
Mapping by Indophil and observations made during the site
visit have established a general picture of the hydrothermal
system of the Hinotongan property. It appears to be a
classically zoned acid sulphate system similar to the
Tampakan Cu-Au deposit (WMC reported 900 million tones
at 0.75% Cu & 0.3g/t Au, assumed non JORC) on Mindanao
(Figures 7.5 and 7.6).The very upper part of the system
(probably under original surface geysers) consists of silica,
the remnants of rock totally leached of all other elements by
the acid fluids.This zone is represented by the silica cones
(Figure 4.13), which are interpreted to be leached Pliocene
volcanic eruption sites.This zone maybe be as thick as 500m.
In the lower parts of the silica-pyrite-alunite zone (acid
sulphate alteration) zone, areas of hydrothermal chlorite are
present, very similar to Tampakan. Low grade copper
sulphides (observed by the author) assaying up to 0.3% Cu
occur in porous and brecciated silica-pyrite-alunite alteration
in the Hinotongan riverbed.
PREVIOUS EXPLORATION
Indophil’s joint venture partner completed regional resistivity
surveys during their exploration for geothermal energy
sources. A large, regional resistivity anomaly (low) probably
reflects the vast amount in non-conductive silica in the area,
and therefore is a gauge of the intensity of alteration.
WMCE conducted a limited reconnaissance exploration
program in the project area during 1997. Several stream
sediment copper anomalies were defined.
INDOPHIL EXPLORATION
Indophil has completed initial geological mapping, additional
follow up stream sediment sampling, base of slope and some
ridge soil sampling in the project area.This data defines a
number of coherent copper, arsenic and gold anomalies in
the headwaters of the Hinotongan River.This is the area of
the intersection of the Hinotongan and Amlan structures,
and in the vicinity of the disseminated copper mineralisation.
They are adjacent to the thick silica zone that alters the
volcanic craters. It has yielded low geochemical values,
possibly due to the intense metal leaching in the upper parts
of the hydrothermal system.
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7 I n d e p e n d e n t G e o l o g i s t ’s R e p o r t c o n t ’d

Figure 7.5 - Comparative Geology Tampakan, Hinotongan and El Indio (Chile)

TAMPAKAN (Phil.)
Recent andesite pyroclastics

Dacite lavas, domes

Hornblende diorite

Basement Andesite

Acid-sulphate alteration

Outcropping mineralization

Projection of Tampakan Cu-Au deposit

Faults

(Modified from Balkau J.,

Mt. Matutum
et al., 1998) Volcano

Breccia with anomalous

Au, As, Bi, Hg, Sb
n
la
Am

BCI Sulphur
Prospect
HINOTONGAN (Phil.)
Latest andesite volcanics
Guintabon
B Dome Strong hydrothermal alteration,
Hin
Indophil Resources NL January 2001

oto mainly acid-sulphate

ngan Mt. Guinsayawan
Volcano Chlorite-epidote-calcite alteration

Grey silica breccia Quartz Stringer in argillic

with anomalous alteration with up to 3.00 g/t Au Altered pliocene volcanic cones
Cu values
A Malabo
Outcropping mineralization

Faults
Okoy
Palimpinon
Geothermal
Dobdob Field
Exploration Permit Boundary

EL INDIO (Chile)
Late tertiary sediments and rhyolites

El Tertiary andesites
Indio
Banos del Toro

Pre-tertiary andesite
A

volcanics and sediments

N T I N

Zone of hydrothermal
alteration (silica, alunite, clays)
Tambo
Paleozoic granite
E

Granodiorite
G
R

Faults 0 5
A

Kilometres
(Modified from Jannes R.R., et al., 1990)

Prepared by Indophil Resources NL February 2002 for ESI

The mapping shows the linear distribution of the silica alteration, particularly the volcanic craters. Indophil interprets them to lie
along a subsidiary structure to the Hinotongan Fault that has focused and controlled the flow of the hydrothermal fluids.This
seems very likely.

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Indophil Section 07 14/3/02 5:55 PM Page 75

7. Independent Geologist’s Report

Figure 7.6 - Schematic cross-sections Tampakan
and Hinotongan
1500 m.
Giant Cu-Au deposits usually have the following key
TAMPAKAN Controlling Structure characteristics:

Approximate Elev. ASL (m)

Large area of intense acid sulphate alteration.

OREBODY Alteration associated with major regional faults.

Gypsum/anhydrite zone
High concentrations of arsenic.
0 m.

Pyrite, copper minerals, and copper-arsenic minerals

enargite/luzonite associated with gold.

A mineralised porphyry intrusion may be exposed at

Recent volcanics Porphyry copper mineralization depth if eroded terrain.
Acid-sulphate alteration Diorite 2000 m.

Chloritic zones Andesite/dacite porphyry dikes B These features are certainly present at Tampakan and appear
to be present at Hinotongan.Therefore the project is
considered to have very good potential for the discovery of a
HINOTONGAN Controlling Structure
large Cu-Au deposit. These features can be also be compared
Approximate Elev. ASL (m)

Guinsayawan
volcanics
to the largest acid sulphate Cu-Au ore complex known, the
Pliocene El Indio group of deposits in northern Chile (Figure 7.5).
A Cu mineralization
cone
Hinotongan clearly has a mineralised alteration system
(up to 0.3 % cu)
associated with major structures on a scale of both Tampakan
and El Indio, and therefore bodes well for exploration.
TARGET MINERALIZED ZONE
Andesite
The main target would be under the vast cliffs of silica near
porphyry dike 0 m.
the intersection of the Amlan and Hinotongan “controlling”
Main faults. It must however be recognised that this project comes
Intrusive ??
Prepared by Indophil Resources NL February 2002 for ESI with risks:

It is in very rugged and steep terrain, making access

ENVIRONMENTAL ISSUES difficult, slow, and expensive.
The area has undergone industrial logging, and the current The steep terrain and extreme thickness of the silica cap
forests are generally secondary regrowth, although there are probably preclude the use of ground geophysics.
small patches of original rainforest seen near the Hinotongan
River.There is some illegal logging by locals. Relations There could be as much 500m of silica over the target
between Indophil and the local community are good. area, so picking reachable drill targets will require
Environmental groups based at the Silliman University in thought.
Dumaguete are conducting a reforestation project. However,
it is not supported by the local community, as this activity If economic mineralisation is indeed present, it is likely to
does not take into account local peoples employment needs. be deep.Therefore high-grades, at least 1.5-2% Cu with
0.5-1 g/tAu will be needed.
EXPLORATION POTENTIAL
EXPLORATION PROGRAM AND PROPOSED
The very strong similarities between Hinotongan and BUDGET
Tampakan (Figures 7.5 and 7.6) make this a very good
exploration concept.The current data suggests that this is Indophil has proposed a two year work program and Budget
not a barren system, and at least contains copper estimated to cost $568,000 for the Hinotongan JV (Table 4.2).
mineralisation. Although gold levels detected to date are not
high, the stream sediment data is certainly anomalous. Given
the extreme relief, thick vegetation and the very thick
overlying silica cap, only the edge of the hydrothermal
system may be exposed and sampled.

75
Indophil Section 07 14/3/02 5:55 PM Page 76
7 I n d e p e n d e n t G e o l o g i s t ’s R e p o r t
LEYTE
The Leyte Project consists of two geographically separate
tenement groups the subject of separate agreements:
St. Bernard and Sogod (Figure 4.14).Therefore they will be
discussed separately.
ST. BERNARD
ACCESS AND LOCATION
Leyte Island is accessed by regular flights and high speed ferry
service from Cebu City. In fact the new hydrofoils provide an
exceptional ride. Sealed roads ring the island.The tenement is
located at the southeastern end of the island and is accessed
from Sogod by sealed and gravel roads.The sites that were
visited are east of St Bernard village in the main valley whose
shear west wall is interpreted to be the Philippine Fault.The
property lies east of the fault where the terrain consists of
rolling hills in direct comparison to the rugged area west of
the fault.Within the property, rudimentary gravel road
network and creek beds provide entry.
This area has not undergone modern exploration. Some
small-scale mining has occurred on narrow veins.
TENEMENT INFORMATION
Indophil has exercised an option agreement with Caraga
Golden Triangle Mining Co. over a recently granted 8.91 sq
km MPSA .This included an exercise price of $20,000 plus a
1% gross or 5% net based royalty, whichever is the higher.
GEOLOGY AND MINERALISATION
Preliminary geological mapping and stream sediment
sampling by Indophil has established the basic geology of the
area as a sequence of Miocene andesite lavas that are clay-
pyrite and silica-pyrite altered near the Philippine fault
(Figure 7.7).
Two areas were visited on 14 March 1997. A road cut of
clay-pyrite altered andesite within the regional alteration
zone was sampled, but returned low values (<0.02g/t gold). A
second area was accessed along a creek east of San
Bernardo village. 1.5 km east of the village, where there is a
creek exposure of diorite and grey clay-pyrite alteration.
Oxidised silica-pyrite samples graded between 0.15-0.40g/t
gold. Approximately 3 km east of the village, near old
underground workings, visible gold was seen in an alluvial
quartz vein cobble. Due diligence random grab sampling of
similar vein material reported 10.07g/t gold and 4.3g/t silver.
Two new areas were visited on 3 September 2000: A creek
section exposing acid sulphate alteration that has strong gold
and arsenic stream anomalies and an area of transported
boulders of silica-pyrite mineralisation that was derived from
the area of stream sediment anomalism.
76
c o n t ’d
PREVIOUS EXPLORATION
An international aid program completed a stream sediment
survey and regional mapping program in this area.The data
has been not viewed, but apparently is available.
INDOPHIL EXPLORATION
Indophil has completed an initial reconnaissance geological
and stream sediment survey, which has defined an
approximate 2.5 km2 area in the southern part of the
tenement application that coincides with an area of intense
alteration (Figure 7.7). Of 35 stream sediment samples
collected, 10 returned values >500ppb Au and 4>1000ppb
(1g/t Au), with a peak value of 18.1g/t from a creek draining
the area of alteration.The Au values are supported by strong
arsenic response. Follow up mapping and detailed stream
sediment sampling has confirmed that one of the main
sources of gold anomalism is an area of acid sulphate
alteration containing silica-alunite-pyrite alteration.These
gold anomalous catchments occur in well defined clusters,
suggesting a specific bedrock source.
Follow-up work has included gridding and a 80m x 20m soil
sample survey.The 285 soil samples and additional rocks
have been stored and not analysed, waiting funding of the
next phase of exploration.Three areas of intense silica-clay-
pyrite alteration have been identified. One of these appears
to be associated with a breccia pipe.
ENVIRONMENTAL ISSUES
The area has undergone industrial logging, and the current
forests are generally secondary regrowth.
EXPLORATION POTENTIAL
This area has very good exploration potential.The geology
and alteration are similar to Manat, so there is a reasonable
chance of vein and/or bulk mineable, disseminated gold
deposits. Copper values are relatively low, so there may not
be potential for porphyry Cu deposits.
EXPLORATION PROGRAM AND PROPOSED
BUDGET
Indophil has proposed a two year work program and budget
for the St Bernard property totaling $146,000 (Table 4.2).
SOGOD JV
ACCESS AND LOCATION
Being on southern Leyte Island, general access is similar to
St. Bernard (above).The JV tenement applications are located
at the south-central part of the island and are accessed from
Sogod from the main highway to Tacloban and then by gravel
roads and walking tracks.The southern boundary of the
MPSA application is some 1.5km from Sogod town.
Indophil Section 07 14/3/02 5:55 PM Page 77

7. Independent Geologist’s Report

Figure 7.7 - Simplified geology and stream sediment geochemistry - St Bernard

0 500

Metres

Ck.
non
Mahayag River

Togu

Alluvium .
e Ck
Gorm
Strong clay-silica
alteration + pyrite
Ck.
Giso
Volcaniclastics/andesite
0.85 18.05/0.63
Andesite dome La
ng
iC
k.
Ck.
arag

Anomalous Stream Sediments

Mip

0.70
Mar

ppm Au
ang
iC
k.

Stream sediments
> 200 ppb Au 0.70
MPSA-169-2001-VIII
Stream sediments
> 20 ppm As
Original APSA boundary
Inferred Fault
Current MPSA boundary

Prepared by Indophil Resources NL for ESI, February 2002

77
Indophil Section 07 14/3/02 5:55 PM Page 78

7 I n d e p e n d e n t G e o l o g i s t ’s R e p o r t c o n t ’d

Leyte cont’d

TENEMENT INFORMATION GEOLOGY AND MINERALISATION

Indophil has recently signed a Heads of Agreement for farm-in
and JV arrangements with two affiliated Filipino companies,
over an adjacent MPSA application (UP Mines) and a separate
EP application (Rocky Mountain Aggregates) covering a total
area of approximately 229 sq km.Administrative processing of
the MPSA is at an advanced stage.
Field inspections were conducted both on 15 March 1997
and again 3-4 September 2000. One of the prospect areas
visited (Pandan) comprises a window of highly altered and
mineralised andesites beneath post mineralisation
dacite/andesite cover (Figure 7.8).

Property Location Sample Au Ag Cu Pb Zn As

No. (ppm) (ppm) (ppm) (ppm) (ppm) (ppm)
Sogod Layog area, north of Sogod claims AA15101 0.180 9.4 428 2290 4210 78

Sogod Layog area, north of Sogod claims AA15102 0.115 1.0 66 520 113 148

Figure 7.8 Simplified geology - Pandan area, Sogod Project, Leyte

APSA Boundary

0 500

METRES

LUZON
LUZON

SAMAR
SAMAR
Ba
se

Mapatong
Li n
e

Grid
LEYTE
LEYTE
tion
lora
Exp MAP AREA
MINDANAO

1
2 Layog
Camp
3
S. Cu Pb Zn Au Ag Ba
No. (%) (%) (%) (g/t) (g/t) (%)
1 0.90 9.23 0.47 - 8 -
Pandan 2 0.90 8.70 15.6 1.71 100 39.65
3 8.45 0.20 0.19 - - -
Camp
4 1.44 13.70 11.00 - 437 -
4 5 8
7 5 2.60 3.29 4.00 63.8 1272 45.7
6 6 21.45 8.94 1.20 0.79 98 29.95
7 8.05 50.30 15.40 23.5 9000 -
8 8.20 46.0 7.00 0.96 646 -

Hornblende biotite andesite Fine-grained andesite

Tuffaceous andesite Silicified mineralized outcrop

Andesite porphyry Samples of highly mineralized outcrops

(previous exploration)
Inferred Fault Tunnel

Prepared by Indophil Resources NL for ESI, February 2002

78
Indophil Section 07 14/3/02 5:55 PM Page 79
The alteration is typical of the high sulphide epithermal
systems (acid sulphate related) in the southern Philippines,
being clay-pyrite and silica-pyrite type. Pandan has the
encouraging addition of basemetals including Zn, Pb, and Cu,
making it very similar to Indophil’s Manat Project.
Two areas were visited at Pandan, one being clay (kaolin)-
pyrite (1997) and an extensive area of massive silica-pyrite
deposits that contain disseminated sphalerite and galena
during the September 2000 visit. Due diligence channel-
sampling of the latter occurrence (Layog) gave values of:
It is possible that this represents a silica cap to a base metal-
bearing acid sulphate hydrothermal system.
The northern part of the project area was visited near the
town of Mahaplag (see Figure 4.14). Andesitic volcanic
breccias here have been intensely altered to clay-pyrite and
silica-clay-pyrite assemblages, with minor associated barite-
galena-sphalerite veining.
The small-scale mining area of Inhian is located just off the
northern tenement boundary.
PREVIOUS EXPLORATION
The Pandan Prospect (formally the Balak Prospect), located
near the town of Sogod, was the subject of an intensive
exploration program by the previous owners in the early
1970s with about 38 drill holes completed on a 100m grid.
A massive sulphide resource (not to JORC Code) of
1.334 million tonnes at 0.49% Cu, 1.17% Pb, 2.26% Zn,
0.48g/t Au and 9.63g/t Ag was estimated from this drilling
(see Section 4.5.5 of this Prospectus). As noted above, the
recent field inspection has shown this not to be a VMS
environment. Rather than a VMS deposit, it could be a gold-
base metal system, similar to Indophil’s Magas deposit.
A comprehensive geological map generated during previous
exploration has been obtained. This map shows summary IP,
airborne magnetic data, and interpreted soil geochemical
anomalies.The original data will be needed to determine if it
is useful.To date Indophil has not been able to source this
historical geophysical and geochemical data, although general
exploration descriptions have been obtained.
Significant hydrothermal alteration is present in the
headwaters of the Himbabaguan River, near the town of
Mahaplag.This comprises pervasive clay-pyrite and silica-clay-
pyrite alteration with minor associated barite-galena-
sphalerite veining.
ENVIRONMENTAL ISSUES
The area has undergone industrial logging, and the current
forests are generally secondary regrowth.
7. Independent Geologist’s Report
EXPLORATION POTENTIAL
The presence of extensive areas of clay-silica-pyrite
alteration with base metal sulphides and gold suggest there is
good potential for vein and disseminated deposits. Good
geological mapping will be needed to focus the exploration. If
the old geochemical and IP data can be recovered, and if it is
of good quality, much time and money could be saved.
EXPLORATION PROGRAM AND PROPOSED
BUDGET
Indophil has proposed a 2 year work program and budget
totaling $361,000 for the Sogod J.V (Table 4.2).
NORTHERN SIERRA MADRE
ACCESS & LOCATION
The northern Sierra Madre Project area (Figure 4.15) is
located in northeast Luzon, 30 km east of Tuguegarao, the
capital of Cagayan Province.This small regional city is located
460 km north of Manila along the sealed highway to
Tuguegarao, and is served by regular commercial airline
flights.The area is only accessible by helicopter or boat from
the eastern coastal strip.The location is very isolated with
rugged terrain ranging from sea level to 1800m, and with
large areas of primary rain forest.
TENEMENT INFORMATION
Indophil has 4 EP applications in place totaling 588.87 sq km.
Tenement clearance work is well advanced on the two
northernmost EP applications and it is anticipated that they
will soon be forwarded to the MGB in Manila for formal
approval. Several agreements have been made with
indigenous communities in the project area.
GEOLOGY AND MINERALISATION
The geology of the Northern Sierra Madre is poorly known,
and has only been subject to a broad, 10,000 km2
reconnaissance survey by an international aid program in
1985 (see below). The mapping has shown that the area is
formed by an Oligocene (22-31 m.y.) magmatic arc
dominated by a sequence of andesitic, basaltic, and minor
dacitic volcanics, intruded by a major series of diorite to
granodiorite bodies.The survey reports large areas of diorite
in the south central part of the belt, and smaller, possibly less
eroded high level intrusions in the north.The less eroded
areas are of interest, due to more preservation of any
formed mineral deposits. All information suggests this is a
calc-alkaline volcanic belt similar to the Central Cordillera
that hosts the Baguio district and the Lepanto gold deposits.
Two copper occurrences (Casablangan & Dinacdacan)
identified by the international aid program survey near the
upper reaches of the Tuguegerao River and within Indophil’s
EPA53 (Figure 4.15) are described as porphyry Cu style
alteration occurring at the contact of diorite, dacite, and
andesite. A field visit was made by helicopter on March
79
Indophil Section 07 14/3/02 5:55 PM Page 80
7 I n d e p e n d e n t G e o l o g i s t ’s R e p o r t
Nothern Sierra Madre cont’d
21-22, 1997. The purpose of the trip was to give a general
impression of access, terrain, rock types, and any observable
alteration.There was no intent to conduct comprehensive
sampling or was there a great expectation of finding landing
sites at areas of mineralisation. In the end, general over-
flights of the EPAs were made, together with four successful
riverbanks landings. Landing sites were not only rare, but
with the limited time available, the sites were never very
close to known anomalies. Results of the visit suggest
andesitic fragmentals in the NW, large areas of diorite in the
central area, and basaltic andesites in the NE , supporting the
observations of the international aid program survey. At one
of the few accessible landing sites in the NW part of the
tenement on the upper reaches of the Tuguegarao River,
a large area of silica-pyrite alteration (covered by 2 EP
applications) was found near a porphyry Cu area of interest
and its adjacent Cu and As stream anomalies identified by
the international aid program survey. The alteration area is
approximately 1 x 2 km in size within fragmental andesites.
Outcrops of this alteration contain abundant veinlets of
anhydrite and carbonate, and some veinlets and
hydrothermal breccias of chalcedonic silica. River boulders of
fresh and pyrite-bearing diorite were also seen. Such
alteration could be either associated with an epithermal gold
or a Cu-Au porphyry system. Isolated rock chip samples
taken during the recent visit were not anomalous, however
the alteration is indicative of a substantial hydrothermal
system, which could easily contain gold and copper
mineralisation.
Silica-pyrite alteration in diorite intrusives was observed and
sampled at a site on the Dikatunayan River, in the central
part of the area, about one kilometre from the reported
process porphyry Cu occurrence. Assay results were not
anomalous.
PREVIOUS EXPLORATION
Very broad reconnaissance exploration referred to above
was completed in the 1985 international aid program of
regional exploration.This program completed stream
sediment sampling with a density of approximately one
sample per two sq km, together with regional mapping.The
survey focused mainly on basemetals. Arsenic was routinely
analysed, however gold was not, except in isolated rock
samples. Anomalous copper responses of 150-500 ppm were
detected near the Tuguegarao River alteration zone and in
the Ilang River catchment.Three porphyry copper
occurrences were reportedly observed.There is no evidence
to suggest that systematic, commercial exploration has been
carried out in this part of the Philippines.
ENVIRONMENTAL ISSUES
The isolated nature of the area means that the existing
forests are generally original rain forest.
80
c o n t ’d
EXPLORATION POTENTIAL
There is good potential for epithermal gold, high sulphidation
gold, and porphyry Cu-Au systems.The land position covers
one of the last unexplored calc-alkaline volcanic belts in
Southeast Asia.These belts host some of the world’s major
copper and gold deposits (Grasberg/Ertzberg, Batu Hijau,
Minahasa, Didipio, King King, and Tampakan).The best
potential for epithermal gold seems to be in the northern
half of the property, where there may be high-level
intrusions.The few spot rock samples taken on the due
diligence visit are in no way representative, and should not
be taken as reflecting poor exploration potential. Rather,
they demonstrate that major hydrothermal alteration has
taken place in geological situations conducive to the
development of gold and copper mineralisation.
EXPLORATION PROGRAM AND PROPOSED
BUDGET
Indophil is looking for a new mineralised district here and
therefore for something very obvious.The location is too
isolated to conduct persistent exploration programs for
small orebodies. Indophil’s strategy is to confirm the region’s
potential quickly with an initial reconnaissance stream-
sediment survey to focus on the anomalous areas identified
in the earlier aid survey, and any new targets generated from
Landsat and tectonic studies.These samples will be analysed
for gold, arsenic, and base metals. Because the project is
initially high risk and expensive exploration, after well-
constrained anomalies are identified, Indophil may look for a
major corporate partner to help proceed with the
exploration.
Indophil has prepared a two year work program and budget
for the Northern Sierra Madre Project totaling $167,000
(Table 4.2).
BUDA
ACCESS & LOCATION
The project area is located 75 kilometres northwest of
Davao City in a poorly accessible, and very remote region of
central Mindanao (Figure 4.16).The southern parts are
reached by sealed road from Davao, however the remainder
of the area is best accessed by helicopter. This region was
under the control of the NPA guerrilla group, but the area
has been quiet over the last few years, and is generally
returning to normal.The remoteness and the past security
situation have inhibited exploration in the past.
TENEMENT INFORMATION
Indophil has 3 EP Applications totaling 417.74 sq km. Area
clearance work is well advanced on one of these (Iglogsad
EPA) with the regional office of the MGB and agreements
are in place with the local community. The remaining 2 EPAs
(Lubang & Silanganan) will require agreements with
Indigenous peoples and endorsement by the NCIP before
they can be advanced.
Indophil Section 07 14/3/02 5:55 PM Page 81
GEOLOGY AND MINERALISATION
Regionally, the Buda Project area lies along the Central
Mindanao Cordillera that contains the calc-alkaline Sangihe
volcanic arc that trends north from WMCP’s Tampakan
Cu-Au deposit. It has been suggested that this arc is the
northern extension of the Sulawesi Arc in Indonesia that
contains the Messel Mine (Minahasa), a “Carlin-type”
sediment-hosted, silica replacement gold deposit containing
2 million oz. Gold. However, this part of Mindanao has
not been systematically mapped, with little published on
the region.
As part of the 1997 due-diligence process, the project area
was traversed by helicopter, and three prospects were
visited.This field assessment suggests that capping limestone
ridges are underlain by andesites, diorite intrusives,
ultramafics, and gabbros.The ultramafics appear to form an
obducted ophiolitic basement that was thrust during regional
compression.The published 1:2,500,000 scale geological map
of the Philippines documents the andesitic volcanics and
diorites as Miocene in age, and thus they may be part of the
Philippines-wide copper and gold associated event.
Bangan Prospect
Intensely sheared ultramafic (chlorite and serpentine bearing)
outcrop below limestone ridges.This deformation may reflect
proximity to a regional thrust responsible for emplacing the
ophiolitic basement. High-graders have driven a small adit into
outcropping, massive, pyritic sulphides. Channel samples taken
over a 5.8m composite by Indophil during the 1997 due
diligence field visit assayed 31g/t Au (1 oz/t), 80g/t Ag
(2.6 oz/t), and 1.05% Cu.
Kabalansian Prospect
Past high-grader activity focused on a paleoplacer deposit,
with coarse nugget gold at the base of the soil profile.The
source of the alluvial gold has not been found. Porphyritic
andesites in the area are deeply weathered, but where seen
do not appear to be mineralised. Boulders of jasperoid in the
alluvials are weakly anomalous in gold (0.17g/t Au).
Guidangol Prospect
This is a gold panning area of the local villagers. Creeks
contain cobbles of gabbro, ultramafic, and hornblende
andesite with up to 20% disseminated pyrrhotite. Although
no significant assays were obtained from these cobbles, the
visit was not long enough, nor was it designed to identify
bedrock mineralisation.
Although not visited, the Tagbiga prospect, located in the
north of the tenements, reportedly contains copper
mineralisation in fault-bound vein sets assaying 6-15g/t gold,
and 0.5-18.0% copper.
7. Independent Geologist’s Report
PREVIOUS EXPLORATION
An international aid program stream sediment survey was
completed in the eastern half of the area in 1972.
Geological and geophysical surveys were reportedly
completed, including a small IP survey at Tagbiga, but detailed
results are not readily available.The previous owners report
the discovery of Tagbiga during this program.
In the northern part of the project area near the Guidangol
Prospect, a previous explorer conducted irregular stream
sediment surveys searching for porphyry Cu mineralisation.
They experienced difficult relations with both the local
villagers and the NPA, who were active at that time in the
area. This explorer was eventually banned from working
here.The locals, however, enthusiastically received the due
diligence party during the 1997 visit.There are no results
publicly available from the past work.
Reports of a high-grader gold rush near Kabalansian,
encouraged another explorer to apply for tenements at
Buda in 1995 and their exploration began in 1996. In their
short exploration program, they completed local stream
sediment surveys around Kabalansian, Guidangol, and Bangan
prospects, where there was evidence of high-grader activity.
Work at Kabalansian focused on locating the source of the
alluvial gold, but has so far remained elusive. At Bangan,
results from stream sediment samples reported only
55-150ppm copper, and low gold, clustering around
0.03-0.05ppm, with one anomalous value of 0.10ppm.
Guidangol prospect generated 200-300ppm copper and one
value of 0.14ppm gold. Although these results are not very
anomalous, they should not be judged too harshly. This
survey did not detect the high-grade mineralisation at
Bangan, since the adjacent creek was not sampled and the
nearest sample was some 5 kilometres away. However, their
work was designed to quickly identify new mineralisation in
the vicinity of known prospects, and as such was not
systematic across the tenement, covering only an estimated
15% of the entire property.
ENVIRONMENTAL ISSUES
The area has undergone industrial logging, and the current
forests are commonly secondary regrowth. Areas of original
rain forest have been excised from Indophil’s EP applications.
EXPLORATION POTENTIAL
The lack of systematic exploration over this very large area,
and its position in a complex volcanic arc, northward of
WMCP’s Tampakan property, suggests that there is good
potential for porphyry Cu-Au mineralisation, and perhaps
skarn deposits in the limestones. Little is known about the
geology, but the presence of andesites and diorites is very
encouraging. High-grade gold in massive sulphides in the
ophiolitic basement, suggests there is potential for high-grade
gold and base metal deposits.The recognition of anomalous
jasperoid boulders may mean there is potential for sediment
hosted, Carlin style gold.
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7 I n d e p e n d e n t G e o l o g i s t ’s R e p o r t
Buda cont’d
EXPLORATION PROGRAM AND PROPOSED
BUDGET
Indophil has proposed a two year work program and budget
totaling $131,000 for Buda. Depending upon the results of
an initial phase of reconnaissance exploration, Indophil may
consider farming out equity as an appropriate strategy.
FINANCIAL CONSIDERATIONS AND
ASSESSMENT OF THE PROPOSED
EXPLORATION PROGRAM
As part of this independent geological audit, the financial
terms of Indophil’s option and acquisition transactions were
reviewed. It is the opinion of ESI that the considerations paid
to and the expenditure commitments made to the property
vendors are fair and reasonable.
A detailed review has been completed of Indophil’s proposed
exploration program and A$3.95 million, two-year budget, as
presented in Table 4.2 of Section 4 of this Prospectus.The
Indophil plan is well designed, and their success at Manat
shows they have the experience and expertise to implement
and manage it.The program is designed to better outline
resources at Magas, to begin pre-feasibility studies on them,
to find additional resources there, and to identify growth for
the Company in the other projects. It is ESI’s opinion that
the proposed exploration program is reasonable and
appropriate for these and other stated aims.
Indophil's proposed expenditure programme fulfills the
requirement of ASX Listing Rule 1.3.2. Indophil has stated to
ESI that it will also have sufficient working capital to carry out
its stated business objectives of exploring and developing its
current property portfolio, as required by Listing Rule 1.3.3.
Michael L. Page
6 March 2002
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Appleyard, G.R., 1994, Joint venture terms as a basis for valuation:
Proceedings of VALMIN 94, mineral valuation methodologies
conference 1994, 27-28 October 1994, Sydney; AusIMM, p.167-174.
Australian Institute of Mining and Metallurgy, 1998,The revised
VALMIN code & guidelines (1998): an aide memoire to assist its
inter-operation.
Australian Institute of Mining and Metallurgy, 1999, Appendix 5A,
Australasian Code for reporting of mineral resources and ore
reserves (the JORC Code).
Avantgarde, Undated, 1:5000 scale exploration plan of Avantgarde
Mining Corp., including collar locations of auger and diamond drill
holes, single gold assays for auger holes, location of trenches, and
geological units.
82
c o n t ’d
Balkau, Jens, 1996, Exploring in the Philippines:ANZ McCaughan Asian
Mining Investment Conference, Bali, Indonesia, 9-10 October, 1995.
Balkau, Jens, Buenavista, Alan, Norris, Malcolm,Watt, Rod, Marcos,
Danny, 1998,The Discovery of the Tampakan Cu-Au deposit,
Mindanao, Philippines. Paper presented at the 104th Annual
Northwest Mining Association Meeting, SEG Giant Ore Deposits
Session, Spokane,Washington, December 2-4, 1998.
Bates, R.L. and Jackson, J.A. (Editors), 1987, Glossary of Geology, 3rd
Edition: American Geological Institute, Alexandria,Virginia, 788 p.
Bureau of Mines & Geosciences, 1982, 1:2,500,000 scale geological
map of the Philippines: Bureau of Mines & Geosciences, Department
of the Ministry of Natural Resources,Volume I.
Carlile, J.C., Heesterman, L.J.L, Mitchell, A.H.G., 1995, Gold
distribution, production and potential in Indonesia, in J.L. Mauk and
J.D. St. George (Eds.) PACRIM Congress 1995 - Exploring the Pacific.
AusIMM (Melbourne) September, 1995.
Chase, 1996, Chase Group: Summary of Philippine Projects,
document No. cgsproj_con12/11/96, December 1996.
Claim Resources, 1995, Prospectus and notice of extraordinary
general meeting, January 3, 1996.
Cooke, David R., Heihersay, Paul S.,Wolfe, Rohan, and Calderon, Alex
L., 1996, Concepts and exploration criteria for Australian and SW
pacific porphyry cu-au deposits: in Ore Deposits Studies and
Exploration Models: Porphyry Cu-Au Deposits, Skarn, and
Epithermal Deposits, CODES Short Course Manual 5. Centre for
Ore Deposit and Exploration Studies, Hobart,Tasmania, July, 1996.
Culala, L.R. Jr., et al, 1983, Amacan copper deposit of North Davao
Mining Corporation in Masara, Mabini, Davao del Norte" in: Geology
and Mineral resources of Davao del Norte, by Geological Survey
Section, Mines and Geo-Sciences Regional Office No. X, Surigao City,
Mindanao, May 1983.
Eikon, Undated, Summary tabulation of diamond drill intersections
at the Palado claims, Labo District, Luzon: Eikon Corporation,
the Philippines.
Exploration Services International, 23 May 1997,Valuation of mineral
properties in the Philippines and India, Independent Consulting
Geologist's Report for Indophil Resources N.L.
Garlick, H. J. and Reynolds, M., 1966, Independent Geologist's Report
of Mineral Exploration assets Tanzania [Claim Resources N.L.,
changed to Tanganyika Gold N.L.], Specialist Geologist Report by
Mckay & Schnellmann Pty. Ltd. for Prospectus 3 January 1996.
Gold Gazette Asian Edition, April 1997, Bohol deal has Egerton Gold
excited, p.12.
Goldfields Asia Ltd., Undated, Mabilo; internal document.
Goulevitch, J. and Eupene, G.S., 1994, Geoscience rating for valuation
of exploration properties - Applicability of the Kilburn Method on
Australia and examples of its use: Proceedings of VALMIN 94,
mineral valuation methodologies conference 1994, 27-28 October,
1994, Sydney; AusIMM, p.175-189.
Heald, P., Foley, N.K., and Hayba, D.O., and 1987, Comparative
anatomy of volcanic-hosted epithermal deposits: Acid-sulphate and
adularia-sericite types: Economic Geology, v. 82, p.1-26.
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Lafayette Mining Ltd., 1999a, Ore reserve statement; News release,
5 October, 1999.
Lafayette Mining Ltd., 1999b, Quarterly report, December, 1999.
Lawrence, M.J., 1994, An overview of valuation methods for
exploration properties: Proceedings of VALMIN 94, Mineral Valuation
Methodologies Conference 1994, 27-28 October, 1994, Sydney;
AusIMM, p.205-221.
Leach,T., 1996, Comments of the geology, alteration, and mineralogy
of various prospects in south central Luzon, Bohol, and Mindanao,
June 1996, Internal Report for the Chase Group.
MacDonald, G.D., and Arnold, L.A., 1994, Geological zoning of the
Grasberg Igneous Complex, Irian Jaya, Indonesia. In:T.M. van
Leeuwen, J.W. Hedenquist, L.P. James, and J.A.S. Dow (Editors),
Indonesian Mineral Deposits - Discoveries of the Past 25 Years.
Journal of Geochemical Exploration, vol. 50, p. 143-179.
Maula, S. and Levet, B., 1996, Porphyry copper gold signatures and
the discovery of the Batu Hijau deposit, Sumbawa, Indonesia:
Porphyry related copper and gold deposits of the Asia Pacific region,
Conference Proceedings, Cairns, 12-13 August 1996:The Australian
Mineral Foundation, Adelaide, p8.1-8.13.
McPhar Geoservices (Phils.), Newsletter, 11 September 2000).
Meek,W.B. et al, 1941,The geology of the Paracale-Jose Panganiban
Mining District of Camarines Norte, Luzon: Philippines Bureau of
Mines, p.1, (unpublished).
Mertig, H.L., Rubin, J.N., and Kyle, J.R., 1994, Skarn Cu-Au orebodies
of the Gunung Bijih (Ertzberg) district, Irian Jaya, Indonesia. In:T.M.
van Leeuwen, J.W. Hedenquist, L.P. James, and J.A.S. Dow, (Editors),
Indonesian Mineral Deposits - Discoveries of the Past 25 Years: J. of
Geoch. Explor., v. 50, p.179-202.
Middleton, C.N., and Buenavista A.G.1999, Manat exploration joint
venture, report on stage 1 exploration activities at Manat,
Compostela Valley Province, Mindanao, November 1999.
Mining Journal, 1992,The Philippines, a prospectus for the
international mining industry: Funded by the United Nations
Development Program, January 1992; p. 226
Miranda, F.E. and Caleon, P.C., 1979, Geology and Mineral Resources
of Camarines Norte and part Quezon Province. Report of
Investigation No. 93, Philippines Bureau of Mines, Manila, p. 101.
Mitchell, A.H.G. and Leach,T.M., 1991, Epithermal gold in the
Philippines: Island arc metallogenesis, geothermal systems and
geology. Academic Press, London; p.457.
Moreno, G.P., 1998, Palmer's Prospect Investigation Technical Report;
Memorandum to; A Buenavista & C. Middleton, September 11, 1998.
Moreno, G.P., August 2000, Sogod Technical Data Investigative
Research and Compilation. Internal Indophil Memorandum.
Moreno, G.P., 2000, Labo-deJesus Drilling Program Technical
Summary Report,To: A.G. Beunavista, July 2000.
Nealon, E.F.G., & Associates, Undated report pre-1987, Untitled
report and plans on Avantgarde Mining Corp.’s De Jesus property,
Labo, Camarines Norte, the Philippines.
7. Independent Geologist’s Report
Onley, P.G., 1994, Multiples of exploration expenditure as a basis for
mineral valuation: Proceedings of VALMIN 94, mineral valuation
methodologies conference 1994, 27-28 October, 1994, Sydney;
AusIMM, p.191-197.
Oxiana Resources N.L., 1997, Highlight’s of Oxiana’s March
Quarterly: Letter to the Manager Companies, the Australian Stock
Exchange, 29 April 1997.
Potter, David R., 1996,What makes the Grasberg anomalous,
implications for future exploration: Porphyry related copper and
gold deposits of the Asia Pacific region, Conference Proceedings,
Cairns, 12-13 August 1996:The Australian Mineral Foundation,
Adelaide, p10.1-10.13.
Quebral, R.D., Pubellier, M., and Rangin, C., 1996 The Onset of
movement on the Philippine Fault in eastern Mindanao: a transition
from a collision to strike-slip environment:Tectonics, (American
Geophysical Union), v. 15, no. 9, p713-726, August 1996.
RP-Japan Survey, 1977, Casiguran district: Joint Republic of the
Philippines - Metal Mining Agency of Japan Mineral Evaluation Project.
RP-Japan Survey, 1985, Northern Sierra Madre: Joint Republic of the
Philippines - Metal Mining Agency of Japan Mineral Evaluation Project.
RP-Japan Survey, 1990, Southern Sierra Madre: Joint Republic of the
Philippines - Metal Mining Agency of Japan Mineral Evaluation Project.
Sabina Limited (Eastern Corp.), 2000, Prospectus, March 2000.
Sajona, F.G., Bellon, H., Maury, R.C., Pubelier, M., Cotton, J., Rangin, C.,
1994. Magmatic response to abrupt changes in geo-dynamic settings:
Pliocene-Quaternary calc-alkaline and Nb-enriched lavas from
Mindanao (Philippines),Tectonophysics 237 (1994) p 47-72.
Sendon, Samuel V., 1996, Report on the geological investigation of
Palado mining claims at Labo and Paracale, Camarines Norte: Internal
report for TVI Resource Development (Phils.) Inc.., October 1996.
Sibson, R.H. 1987, Earthquake Rupturing as Mineralizing Agent in
Hydrothermal Systems. Geology, vol. 15, August 1987, p. 701-704.
Sillitoe, R.H. and Gappe, I.M., 1984, Philippine porphyry copper
deposits: geologic setting and characteristics: CCOP Tech.
Publi., v.14, p. 89.
Sillitoe, 1989 Gold deposits in western Pacific island arcs: the
magmatic connection. Econ. Geol. Mon. 6: 266-283.
Sosa, L.A. and Patron, D.L., 1996, Reconnaissance geological and
geochemical exploration report within the central part of the Buda
FTAA, Mindanao: Internal Report, Plantation Mining Corp., June 1996.
Stephan, J.F., Priet, N., and Maleterre, P., 1990, Evidences for a single
transcurrent system between the Philippines and Taiwan. In:
Orogenesis in Action, Abstracts with Program, p. 53. University
College, London.
United Nations, 1986, Geochemical maps of the J. Panganiban-
Paracale area: from Report GCR/86/4, Project PHI/85/001,
September 1986, United Nations Development Program, New York.
United Nations, 1987, Geology and Mineralisation in the Panganiban
- Tabas and Bulala Areas, Camarines Norte:Technical Report No. 1,
DP/UN/PHI-85-001/6, United Nations Development Program, New
York, p.43.
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Indophil Section 08 14/3/02 6:23 PM Page 84

CARAG, CABALLES, JAMORA & SOMERA

LAW OFFICES
2ND FLOOR, THE PLAZA ROYALE, 120 L.P LEVISTE (FORMERLY ALFARO) STREET, SALCEDO VILLAGE
MAKATI CITY, 1227 METRO MANILA, PHILIPPINES

Tel. Nos: 812-5246; 812-5247; 812-5248

893-9718; 893-9719; 893-9720
893-9721; 892-2879
1 March 2002
Mailing Address: P.O. BOX 7172
Domestic Airport
The Directors Post Office 1300
Metro Manila, Philippines
INDOPHIL RESOURCES NL Facsimiles Nos: (632)818-8971,; 892-7948
Suite 3,Technology Enterprise Centre E-mail Address: ccjs@epic.net

2 Park Avenue
Bundoora,Vic 3083 Australia

Gentlemen:

This report (“Report”) has been prepared for inclusion in a prospectus to be issued by Indophil Resources NL (“Company”) in
connection with the issue by the Company of 20,000,000 Shares at $0.25 per Share to raise a total of $5,000,000 together with
one attaching Option at nil consideration for every Share allotted.

Scope of Report
For purposes of this Report, our inquiries:

(a) relate only to Philippine laws and regulations which are in force as at the date of this Report and which we have deemed
necessary to render this Report;

(b) are based upon publicly available records of relevant Philippine Government Agencies, particularly the Mines and Geosciences
Bureau (MGB); and

(c) are strictly limited to the matters dealt with herein and do not extend, by implication or otherwise, to any other matter.

Assumptions
For the purpose of giving this Report, we have assumed:

(a) that the information provided by the MGB and other government agencies and the public officials concerned are correct and
current as at the date in which this Report was rendered;

(b) the authenticity of all signatures, seals and dates, and of any stamp or marking;

(c) the completeness, and conformity to originals of all copies of documents submitted to us; and

(d) the accuracy and authenticity of all matters of fact material to this Report as certified by officers of the Company and its
affiliates who are identified and mentioned in this Report.

8.1 MINERAL AND ASSOCIATED LEGISLATION

The Philippine Mining Act of 1995
The adoption of the 1987 Constitution of the Philippines introduced a change in the system of exploration, development and
utilization of the country’s natural resources. Under the 1987 Constitution, the options open to the State in respect of natural
resources exploration, development and utilization were specifically limited to direct undertaking or by entering into co-
production, joint venture; or production-sharing agreements, or by entering into agreement with foreign-owned corporations for
large-scale exploration, development and utilization.

On July 10, 1987, Executive Order No. 211 was promulgated prescribing the interim procedures in the processing and approval of
applications for the exploration, development and utilization of minerals pursuant to the 1987 Constitution in order to ensure the
continuity of mining operations and activities and to hasten the development of mineral resources.

On July 25, 1987, Executive Order No. 279 was promulgated authorizing the DENR Secretary to negotiate and conclude joint
venture, co-production, or production-sharing agreements for the exploration, development and utilization of mineral resources,
and prescribing the guidelines for such agreements and those agreements involving technical or financial assistance by foreign-
owned corporations for large-scale exploration, development, and utilization of minerals.
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8. Solicitors’ Report - Philippine Tenements

In 1995, the Mining Act was passed by Congress and approved by the President of the Philippines.The Act became effective on
April 9, 1995. Subsequently, DENR Department Administrative Order No. 95-23 was issued by the Secretary of the DENR to
serve as the implementing rules and regulations of the Mining Act.This issuance was replaced with Department Administrative
Order No. 96-40 (DAO 96-40) which currently serves as the primary implementing rules and regulations of the Act.

DAO 96-40 specifically enumerates the areas open and closed to mining operations as follows:

Section 14. Areas Open to Mining Applications

The following areas are open to mining applications:

(a) Public or private lands not covered by valid and existing mining rights and mining applications;

(b) Lands covered by expired/abandoned/canceled mining/quarrying rights;

(c) Minerals Reservations; and

(d) Timber or forest lands as defined in existing laws.

Section 15. Areas Closed to Mining Applications

(a) The following areas are closed to mining applications:

1. Areas covered by valid and existing mining rights and mining applications subject to Subsection b(3) herein;

2. Old growth or virgin forests, proclaimed watershed forest reserves, wilderness areas, mangrove forests, mossy forests,
national parks, provincial/municipal forests, tree parks, greenbelts, game refuge, bird sanctuaries and areas proclaimed as
marine reserves/marine parks and tourist zones as defined by law and identified initial components of the National Integrated
Protected Areas System (NIPAS) pursuant to R.A. No. 7586 and such areas expressly prohibited thereunder, as well as under
Department Administrative Order No. 25, Series of 1992, and other laws;

3. Areas which the Secretary may exclude based, inter alia, on proper assessment of their environmental impacts and
implications on sustainable land uses, such as built-up areas and critical watersheds with appropriate
barangay/municipality/city/provincial Sanggunian1 ordinance specifying herein the location and specific boundary of the
concerned area; and

4. Areas expressly prohibited by law.

Mining applications which have been made over the foregoing areas shall be reviewed and, after the process, such areas may be
excluded from said applications.

(b) The following areas may be opened for mining applications the approval of which are subject to the following conditions:

1. Military and other Government Reservations, upon prior written clearance by the Government agency having jurisdiction
over such Reservations;

2. Areas near or under public or private buildings, cemeteries, archaeological and historic sites, bridges, highways, waterways,
railroads, reservoirs, dams or other infrastructure projects, public or private works, including plantations or valuable crops,
upon written consent of the concerned Government agency or private entity subject to technical evaluation by the Bureau;

3. Areas covered by FTAA applications which shall be opened for quarry resources mining applications pursuant to Section 53
hereof upon the written consent of the FTAA applicants: Provided,That sand and gravel permit applications shall not require
consent from the FTAA, Exploration Permit or Mineral Agreement applicant, except for Mineral Agreement or Exploration
Permit applications covering sand, gravel and/or alluvial gold2;

4. Areas covered by small-scale mining under R.A. No. 7076/P.D. No. 1899 upon prior consent of the small-scale miners, in which
case a royalty payment, upon the utilization of minerals, shall be agreed upon by the concerned parties and shall form a Trust
Fund for the socioeconomic development of the concerned community; and

5. DENR Project Areas upon prior consent from the concerned agency.

1 legislative council
2 As amended by DENR Administrative Order No. 99-57 85
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8 Solicitors’ Repor t - Philippine Tenements cont’d

The DENR has issued clarificatory guidelines regarding areas which are open to mining applications but shall be subject to area
status clearance. MO 98-03 provides in Section 7 thereof:

Sec. 7 Areas Open to Mining Applications but Subject to Area Status Clearance.

Mining Applications may be granted over the following areas subject to Area Status and Clearance from the concerned
Department Sectors or Concerned Government Office(s) having jurisdiction over the same:

(a) Public and private lands not covered by valid and existing mining rights and Mining Applications;

(b) Lands covered by expired, abandoned or cancelled mining rights and Mining Applications;

(c) Mineral reservations;

(d) Timber or forest lands as defined in existing laws, excluding those covered by NIPAS areas;

(e) Military and other Government Reservations outside of the jurisdiction of the DENR, provided that these may only be opened
initially for Exploration Permits, pursuant to Section 11 of DAO 96-40;

(f) Areas near or under public or private buildings, cemeteries, archaeological and historic sites, bridges, highways, waterways,
railroads, reservoirs, dams or other infrastructure projects, public or private works, including plantations or valuable crops,
subject to technical evaluation validation by the Bureau;

(g) Areas falling under the jurisdiction of DENR which shall consist of the following:

1. Forest reservations;

2. Forest reserves other than critical watershed forest reserves; and

3. Existing DENR Projects Areas within timber or forest lands. reservations and reserves

Provided, that DENR proposed project and/or protected areas that fall within forest reservations, forest reserve other than
critical watershed forest reserves, timber or forest lands and other areas listed under Section 7 hereof are considered open
to Mining Application.

It bears emphasizing, however, that even though a proposed permit/contract area may be open to mining operations, the approval
of the grant of a permit or contract may be effectively blocked by legislative councils of local government units affected. Under
DAO 99-34, mining applicants are now required to secure prior approval or indorsement by any two (2) of the concerned
Sanggunian (Panlalawigan, Bayan and Barangay) in support of mining applications intended for development and/or utilization
purposes. In the case of mining applications intended for exploration, proof of consultation with/project presentation to any two
(2) of the concerned Sanggunian shall be required. In either case, the proof of prior approval, indorsement, consultation and/or
project presentation shall be in the form of a formal Resolution or Certification by the concerned Sanggunian.

Modes of Mineral Resources Exploration, Development, and Utilization

Under the Mining Act, the exploration, development, utilization and processing of mineral resources may be undertaken through
an exploration permit (“EP”), mineral agreement (“MA”) mineral production sharing agreement (“MPSA”), Co-production
Agreement (“CPA”), Joint Venture Agreement (“JVA”) or under a financial or technical assistance agreement (FTAA). Mining
activities may also be undertaken on a lesser scale under a quarry permit, sand and gravel permit, gratuitous permit, gemstone
gathering permit or a small-scale mining permit.

EP grants the right to conduct exploration for all minerals in a specified area.The term of an EP shall be for a period of two (2)
years from date of issuance thereof, renewable for like periods but not to exceed a total term of six (6) years for nonmetallic
minerals exploration or eight (8) years for metallic minerals exploration.The failure of a Permittee to apply for a renewal of the
Exploration Permit within the prescribed period shall, however, automatically open the area to mining applications upon the
expiration of the said Permit.

MA refers to a contract between the government and a contractor, involving either a mineral production-sharing agreement
(“MPSA”), CPA or JVA. MAs shall have a term not exceeding twenty-five (25) years from the date of execution and renewable for
another term not exceeding twenty -five (25) years under the same terms and conditions, without prejudice to changes mutually
agreed upon by the Government and the Contractor. MAs grant to the contractor the exclusive right to conduct mining
operations and to extract all mineral resources found in the contract area.

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8. Solicitors’ Report - Philippine Tenements

An FTAA refers to a contract involving financial or technical assistance for large-scale exploration, development, and utilization of
mineral resources. It may be entered into with the government of the Philippines for the large-scale exploration, development and
utilization of gold, copper, nickel, chromite, lead, zinc and other minerals. It cannot be granted with respect to cement raw
materials, marble, granite, sand and gravel and construction aggregates. An FTAA shall have a term not exceeding twenty-five (25)
years from the date of execution thereof, and renewable for another term not exceeding twenty -five (25) years under such terms
and conditions as may be provided by law and mutually agreed upon by the parties.

Every contractor is obliged to undertake an environmental protection and enhancement program covering the period of the
mineral agreement or permit. Such environmental program shall be incorporated in the work program which the contractor or
permittee shall submit as an accompanying document to the application for a mineral agreement or permit. The work program
shall include not only plans relative to mining operations but also to rehabilitation, regeneration, revegetation and reforestation of
mineralized areas, slope stabilization of mined-out and tailings covered areas, aquaculture, watershed development and water
conservation; and socioeconomic development. Except during the exploration period of a mineral agreement or financial or
technical assistance agreement or an exploration permit, an environmental clearance certificate (ECC) shall be required based on
an environmental impact assessment and procedures under the Philippine Environmental Impact Assessment System. Also,
contractors and permittees shall technically and biologically rehabilitate the excavated, mined-out, tailings covered and disturbed
areas to the condition of environmental safety as provided in the implementing rules and regulations.

The Indigenous People’s Rights Act of 1997 (IPRA)

In areas which are the subject of Certificate of Ancestral Domains/Certificate of Ancestral Land Claims (CADC/CALC) of
indigenous cultural communities (ICCs), MAs, FTAAs or EPs may be granted upon prior consent of the communities concerned.

Prior consent refers to prior informed consent obtained, as far as practicable in accordance with the customary laws of the
concerned Indigenous Cultural Community. Prior informed consent should meet the minimum requirements of public notice
through various media such as, but not limited to , newspaper, radio or television advertisements, fully disclosing the activity to be
undertaken and/or sector consultation wherein the Contractor/Permit Holder/Permittee should arrange for a community
assembly, notice of which should be announced or posted in a conspicuous place in the area for at least a month before the
assembly: Provided,That the process of arriving at an informed consent should be free from fraud, external influence and
manipulations.

In the event that prior informed consent is secured the concerned parties shall agree on the royalty payment for the concerned
Indigenous Cultural Community(ies) which may not be less than one percent (1%) of the gross output. Expenses for community
development may be credited to or charged against said royalty. Representatives from the Bureau, concerned Regional Office(s),
concerned Department Offices, concerned LGUs, relevant NGOs/POs and the Office of the Northern/Southern Cultural
Communities may be requested to act as mediators between the concerned Indigenous Cultural Community(ies) and the
Contractor/Permit Holder/Permittee in the negotiation for the royalty payment.

In case of disagreement concerning the royalty due the concerned Indigenous Cultural Community(ies), the Department shall
resolve the same within three(3) months. Said royalty shall form part of a Trust Fund for the socioeconomic well-being of the
Indigenous Cultural Community(ies) in accordance with the management plan formulated by the same in the ancestral land or
domain area: Provided,That the royalty payment shall be managed and utilized by the concerned Indigenous Cultural
Community(ies).

ICCs refers to a group of people or homogeneous societies identified by self-ascription and ascription by others who have
continuously lived as organized communities on communally bounded and defined territory, and who have under claims of
ownership since time immemorial, possessed and utilized such territories, sharing distinctive cultural traits.

The rights of the ICCs to their ancestral domain or to the areas held under a claim of ownership, occupied or possessed by them
since time immemorial and which are necessary to ensure their economic, social and cultural welfare are recognized by the
government. Pursuant to this, the ICCs are given priority rights in the harvesting, extraction, development or exploitation of any
natural resources within the ancestral domains. A non-member of the ICCs concerned may be allowed to take part in the
development and utilization of the natural resources subject to certain preconditions, most important of which is the free and
prior informed consent of the ICCs.

The ICCs, through their Council of Elders, may enter into an agreement for the utilization, extraction and development of natural
resources within their ancestral domain. This agreement is subject to a limited term of 25 years, renewable at the option of the
ICCs for another 25 years, and to visitorial and monitoring powers of the ICCs concerned and of the National Commission on
Indigenous Peoples (NCIP) to ensure that the ICCs’ rights are adequately safeguarded and protected.
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8 Solicitors’ Repor t - Philippine Tenements cont’d

To ensure the effective implementation of the IPRA, Executive Order (EO) No. 1 was issued on February 20, 2001 creating the
Office of the Presidential Adviser for Indigenous People’s Affairs which recommended, among others, the review of all Certificates of
Free and Prior Informed Consent (FPIC) issued from 1998. Consequently, Memorandum No. 03-12-01 (Series of 2001) was issued
by the NCIP declaring a moratorium on the issuance of FPIC on mining applications and other activities which require the same.

“Qualified Person”
On March 10, 1999, DENR issued the guidelines for the determination of a “Qualified Person” with respect to mining
applications and the grant of mining rights. Under Memorandum Order No. 99-10 (MO 99-10), a person qualified for the grant of
an EP, MPSA or FTAA must have the financial and technical capability to undertake the submitted Exploration/ Development/
Utilization Work Program under the EP, MA or FTAA. As a mandatory requirement in the acceptance of a mining application, the
mining applicant for an EP, MA, and FTAA shall be required to have a minimum authorized capital stock of Ten Million Philippines
Pesos (P10,000,000) and a minimum paid-up capital of Two Million Five Hundred Thousand Philippines Pesos (P2,500,000) as proof
of its financial capability.With respect to FTAA applicants, the latter shall be required to have a minimum authorized capital stock
of Four Million US Dollars ($4,000,000) or its Philippine Pesos equivalent, after approval of the FTAA by the President of the
Philippines and prior to registration of the FTAA.

The minimum authorized capital of Ten Million Pesos (P10,000,000) and paid-up capital of Two Million Five Hundred Thousand
Pesos (P2,500,000) required for a corporation/association/cooperative/partnership under MO 99-10 shall apply to the principal
applicant whether or not this applicant is supported by an operator or service contractor through an operating agreement or
other similar forms of agreement. In the case of a mining application with two (2) or more applicants as co-applicants, the
minimum authorized capital of Ten Million Pesos (P10,000,000) and paid-up capital of Two Million Five Hundred Thousand Pesos
(P2,500,000) may be required from just one (1) of the co-applicants.

In the case of a mining application by an individual, the minimum amount of Two Million Five Hundred Thousand Pesos
(P2,500,000) shall be required as proof of financial capability, which shall be in the form of a bank deposit or creditation. MO 99-
10 further provides that in the case of juridical persons duly registered in the Philippines, a mining applicant shall be deemed to be
one and the same in relation to other mining applicant(s)/contractor(s)/permittee(s) if more than seventy percent (70%) of their
authorized capital stock are held by the same stockholders and hence, shall be limited to the maximum area that may be applied
or granted for EP, MA or FTAA.

Exploration Permit (EP)

An EP may be granted to a Qualified Person, defined to mean any of the following:

a. any Filipino citizen of legal age and with capacity to contract;

b. a corporation, partnership, association or cooperative organized or authorized for the purpose of engaging in mining, with
technical and financial capability to undertake mineral resources development and duly registered in accordance with law, at
least sixty percent (60%) of the capital of which is owned by Filipino citizens; or

c. a legally organized foreign-owned corporation

The maximum area that a Qualified Person may apply for or hold at any one time under an EP shall be as follows:

a. Onshore, in any one province –

1. For individuals – twenty (20) blocks or approximately one thousand six hundred twenty (1,620) hectares and

2. For corporations, partnerships, associations or cooperatives – two hundred (200) blocks or approximately sixteen thousand
two hundred (16,200) hectares.

b. Onshore, in the entire Philippines –

1. For individuals – forty (40) blocks or approximately three thousand two hundred forty (3,240) hectares and

2. For corporations, partnerships, associations or cooperatives – four hundred (400) blocks or approximately thirty-two
thousand four hundred (32,400) hectares.

c. Offshore (defined under the Mining Act as the “water, sea bottom, and subsurface from the shore or coastline reckoned from
the mean low tide level up to two hundred nautical miles (200 n.m.) exclusive economic zone including the archipelagic sea
and contiguous zone”), in the entire Philippines, beyond five hundred meters (500) from the mean low-tide level –
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8. Solicitors’ Report - Philippine Tenements

1. For individuals – one hundred (100) blocks or approximately eight thousand one hundred (8,100) hectares and

2. For corporations, partnerships, associations or cooperatives – one thousand (1,000) blocks or approximately eighty-one
thousand (81,000) hectares.

The Permittee shall annually relinquish at least 20% of the permit area during the first two (2) years of exploration and at least
10% of the remaining permit area annually during the extended exploration period. However, if the permit area is less than five
thousand (5,000) hectares, the Permittee need not relinquish any part thereof.

The EP applicant is granted the right to transfer or assign an EP application, subject to eligibility requirements under the Mining
Act and its implementing rules.

Mineral Agreement (MA)

The three types of MAs are defined under the Mining Act as follows:

a. MPSA – is an agreement where the Government grants to the contractor the exclusive right to conduct mining operations
within a contract area and a share in the gross output. The contractor shall provide the financing, technology, management
and personnel necessary for the implementation of this agreement.

b. CPA – is an agreement between the Government and the contractor wherein the Government shall provide inputs to the
mining operations other than the mineral resource.

c. JVA – is an agreement where a joint-venture company is organized by the Government and the contractor with both parties
having equity shares. Aside from earnings in equity, the Government shall be entitled to a share in the gross output.

For the purposes of MAs, a Qualified Person is defined to mean any of the following:

a. any Filipino citizen of legal age and with capacity to contract; or

b. a corporation, partnership, association or cooperative organized or authorized for the purpose of engaging in mining, with
technical and financial capability to undertake mineral resources development and duly registered in accordance with law, at
least sixty percent (60%) of the capital of which is owned by Filipino citizens;

The maximum area that a Qualified Person may apply for or hold at any one time under an MA shall be as follows:

a. Onshore, in any one province –

1. For individuals – ten (10) blocks or approximately eight hundred ten (810) hectares; and

2. For corporations, partnership, association or cooperatives – one hundred (100) blocks or approximately eight thousand
one hundred (8,100) hectares.

b. Onshore, in the entire Philippines –

1. For individuals – twenty (20) blocks or approximately one thousand six hundred and twenty (1,620) hectares; and

2. For corporations, partnership, associations, or cooperatives – two hundred (200) blocks or approximately sixteen thousand
two hundred (16,200) hectares.

c. Offshore, in the entire Philippines, beyond five hundred meters (500m) from the mean low tide level –

1. For individuals – fifty (50) blocks or approximately four thousand fifty (4,050) hectares;

2. For corporations, association, or cooperatives – five hundred (500) blocks or approximately forty thousand five hundred
(40, 500) hectares; and

3. For the Exclusive Economic Zone – a larger area to be determined by the Secretary upon the recommendation of
the Director.

An MPSA applicant is granted the right to transfer or assign an application, subject to eligibility requirements under the Mining Act
and its implementing rules. An applicant may also enter into agreements with third persons in relation to the subject matter of
the application which shall, however, be subject to evaluation and registration by the MGB. Such agreements shall be deemed
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approved upon the approval of the MPSA application. The Applicant may also convert a Mineral Agreement into an EP application
in accordance with DAO 96-40. Likewise, upon request of the application, a Temporary Exploration Permit may be granted for a
one-time non-renewable Temporary Exploration Permit (TEP) and/or a Special Mines Permit.

Financial or Technical Assistance Agreement (FTAA)

For purposes of an FTAA, a Qualified Person is defined to mean any of the following:

a. any Filipino citizen of legal age and with capacity to contract;

b. a corporation, partnership, association or cooperative organized or authorized for the purpose of engaging in mining, with
technical and financial capability to undertake mineral resources development and duly registered in accordance with law, at
least sixty percent (60%) of the capital of which is owned by Filipino citizens;

c. a legally organized foreign-owned corporation.

The maximum area that a Qualified Person may apply for or hold at any one time under an FTAA shall be as follows:

a. One thousand (1,000) meridional blocks or approximately eighty-one thousand (81,000) hectares onshore;

b. Four thousand (4,000) meridional blocks or approximately three hundred twenty-four thousand (324,000) hectares offshore or,

c. A combination of one thousand (1,000) meridional blocks onshore and four thousand (4,000) meridional blocks offshore.

Under DAO 96-40, an FTAA applicant is required to post, prior to the approval of the FTAA a financial guarantee/performance
bond and letter of credit or other forms of negotiable instruments from any Government-accredited bonding company or financial
institution , in favor of the Government upon notification by the Secretary, which shall be in any foreign currency negotiable with
the Bangko Sentral ng Pilipinas or in Philippine Peso in such amount equivalent to the expenditure obligations of the applicant for
any year. Also, after the approval of the FTAA but prior to registration of the same the FTAA grantee must have an authorized
capital of at least Four Million U.S. Dollars (US $4,000,000.00) or its Philippine Peso equivalent.

An FTAA applicant is granted the right to transfer or assign an application, subject to eligibility requirements under the Mining Act
and its implementing rules. An FTAA application may also be converted into an EP application.

Approval Process
Approval of applications for EP, MA and FTAA require submission of the necessary Area Status/Consent/Clearance from the
Department sector(s) and/or Government agency(ies) concerned and the publication, posting and radio announcement of the
Notice of Application in accordance with the procedure prescribed under DAO 96-40 and No. 98-03. DAO 96-40 currently
serves as the primary implementing rules and regulations of the Mining Act. Publication is required once a week for two (2)
consecutive weeks in two (2) newspapers: one of general circulation published in Metro Manila and another published in the
municipality or province where the proposed permit area is located. Posting is required for two (2) consecutive weeks on the
bulletin boards of the MGB, concerned Regional Office(s), the Provincial Environmental and National Resources Office(s)
[PENRO(s)], Community Environmental and Natural Resources Office(s) and municipality(ies), copy furnished the barangay(s)
where the proposed permit area is located.

After the necessary publications have been accomplished without any opposition lodged against the applications, or if one has been
lodged, has been found to be unmeritorious, the applications for EP and MPSA are subject to further evaluation by the MGB for
sufficiency of the terms and conditions of the permit or agreement to be granted. An FTAA application is endorsed further to the
FTAA negotiating panel for final evaluation. Unlike other forms of mining rights, an FTAA is subject to the approval of the President
of the Philippines. Upon approval, the EP, MPSA (or such other form of MA) and FTAA shall be registered with the MGB.

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8.2 COMPANY INTERESTS (STRUCTURE/SUBSIDIARIES)
The Company was registered and licensed to establish regional or area headquarters in the Philippines under Securities and
Exchange Commission (S.E.C.) License No. 1999-004 issued on February 2, 1999.

For the purpose of engaging in and conducting mining and related activities in the Philippines, the Company has primarily invested
in Indophil Resources Phils., Inc. (“IRPI”), whose corporate registration details are as follows:

Corporate Name Indophil Resources Phils., Inc.

Date Registered February 12, 1997
Registration No. A-199702506
Authorized Capital Stock P10,000,000.00
Subscribed Capital P 2,581,750.00
Paid-In Capital P 2,581,750.00

The Company owns forty percent (40%) of the outstanding capital stock of IRPI and has an option over the remaining sixty
percent (60%) thereof pursuant to an Option Deed separately executed by the Company with two (2) shareholders of IRPI,
namely: Alan Buenavista who is the registered owner 1,537,600 shares of IRPI representing about fifty nine and one-half percent
(59.5%) of the capital stock and Pericles R. Casuela who is the registered owner of 15,000 shares which constitute about one-half
percent (0.5%) of IRPI’s capital stock.

Under the respective Option Deed, the Company is granted by Buenavista and Casuela an irrevocable call option (“Call Option”)
exercisable prior to 30 September 2004 (“Call Option Period”) which would enable the Company or its nominee to purchase,
free from any liens and encumbrances whatsoever, either: a) all their shares in IRPI or b) prior to the exercise of the Call Option
but within the Call Option Period to purchase from IRPI all or a portion of any of the Properties owned by IRPI.

In case of a) the purchase price is P100 per share while in case of b) the stipulated purchase price is P500,000 for each property
or such other amount as may be agreed between IRPI and the Company or its nominee. In either case, Buenavista and Casuela
may request the Company to waive its rights in writing to demand repayment of any of their outstanding loans referred to below,
if any, arising from advances made to pay for cash calls of IRPI.

In consideration of the grant of the Call Option, the Company committed to pay to Buenavista and Casuela an Option Fee of
P1,000 each upon execution of the Option Deed and advance to them loans in such amounts and under such terms and
conditions as shall enable them to meet any cash calls made by the Company from time to time for the purpose of financing
exploration activities in relation to its properties during the period of the Option Deed.

The corporate entities which have been identified to be subsidiaries or affiliates of IRPI are San Leonardo Mineral
Exploration Corporation [Reg. No. A1997-6987] (“San Leonardo”), Osprey Mineral Exploration Corporation [Reg. No.
A1997-8043] (“Osprey”), Pulong Ilog Mineral Exploration Corporation [Reg. No. A1997-6981] (“Pulong Ilog”), San
Eduardo Mineral Exploration Corporation [Reg. No. A1997-6986] (“San Eduardo”) and San Christo Mineral Exploration
Corporation [Reg. No. A1997-6988] (“San Christo”), which were all registered with the SEC in 1997. A subsidiary is one which
is controlled by another corporation, by reason of the latter company’s ownership of at least a majority of the shares of the
capital stock. An affiliate refers to any corporation which at least owns or controls a party, a corporation which is at least 60%
owned or controlled by such corporation or a corporation at least 60% owned and controlled by a party. The Company and IRPI
own 99.5 % of the capital stock of the aforementioned companies. Moreover, the Company’s Australian wholly owned subsidiaries,
Visayan Resources Pty Ltd., Luzon Resources Pty Ltd. and Southern Philippines Exploration Pty Ltd., have direct investments in: a)
Omega Mineral Exploration Co., Inc. [Reg. No. A1996-06256] (“Omega”), where Luzon Resources Pty. Ltd. owns 99.23% of
the outstanding capital stock; b) Xenia Mineral Exploration Co., Inc. [Reg. No. A1996-06257] (“Xenia”), where Visayan
Resources Pty Ltd. owns 99.23% of the outstanding capital stock and c) Southern Exploration Corporation [Reg. No. A1996-
05452] (“SECO”) where Southern Philippines Exploration Pty Ltd. owns 99.9% of the outstanding capital stock were all registered
with SEC in 1996.

IRPI, San Christo, Xenia, Omega, San Eduardo and SECO have acquired interests over mining claims covered by mining rights
granted under the Mining Act and pending applications for the grant of such mining rights, the brief details of which are as follows:

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8.3 COMPANY PROJECTS AND ASSOCIATED TENEMENTS

NORTHERN SIERRA MADRE PROJECT
A. Exploration Permit Application No. EPA-00052 Applicant: Xenia Mineral Exploration Co., Inc.

B. Exploration Permit Application No. EPA-00053 Applicant: Omega Mineral Exploration Co., Inc.

C. Exploration Permit Application No. EPA-00054 Applicant: Xenia Mineral Exploration Co., Inc.

D. Exploration Permit Application No. EPA-00055 Applicant:Omega Mineral Exploration Co., Inc.

These applications were filed on September 16, 1998 over areas located in Isabela and Cagayan Provinces in northern Philippines.

On September 11, 1996 Geophilippines, Inc. (“Geophilippines”) and Nicole Mineral Exploration Corporation (“Nicole”), acting as
trustees for Xenia and Omega, respectively, and with the written consent of Dalton Pacific Resources, Inc. (“Dalton”) in the form
of a letter notice addressed to the President of Geophilippines and Nicole from Ronald V. Sale, President of Dalton filed FTAA
applications covering portions of Dalton’s two (2) FTAA applications, Mount dos Cuernos and Mount Cresta covering 64,638 and
76,140 hectares respectively. Dalton owns 0.77% of the capital stock of Omega and Xenia.

A Sale Agreement was executed on July 27, 1997 by the following parties: Indophil Resources NL (“the Company”), Oxiana
Resources NL CAN (“Oxiana”), as vendees, and Dalton, Geophilippines, Nicole Mineral Exploration Corporation (“Nicole”),
Haustella Pty Ltd (“Haustella”), Palliser Ltd (“Palliser”), Omega, and Xenia, as vendors. The Sale Agreement was registered with
the MGB on September 15, 1997.

Under the Sale Agreement, Palliser and Haustella agreed to sell and transfer its shareholdings in Xenia and Omega such that the
equity of each of the latter companies would be owned by a nominee of the Company as to 80% thereof and a nominee of
Oxiana as to the remaining 20%.

An Exploration Agreement (the Northern Sierra Madre Joint Venture Exploration Agreement) was executed on August 22, 1997
between the Company and Oxiana. This Agreement was registered with the MGB on September 15, 1997. Under this agreement,
the parties agreed to form and engage in an unincorporated joint venture to carry out an exploration project and appointed the
Company as project manager. The Company would conduct the project on the terms and conditions set out in the Exploration
Agreement. However, through its Letter dated 28 June 2000, Oxiana, speaking on behalf of its wholly-owned subsidiary Dalton
and itself, advised the Company that the group would not contribute to the joint venture expenditure nor to ongoing
expenditure. In the same Letter Oxiana likewise confirmed that it would not contribute to the recapitalization of both Xenia and
Omega and acknowledged that its equity interest in both entities would be diluted to below 1%. Moreover, Oxiana advised the
Company of its decision to convert to the royalty formula provided under Clause 11.3 of the Exploration Agreement since the
group’s non-contribution would dilute its holdings below the 10% benchmark.

On September 14, 1997 Dalton informed the MGB Director that as of September 15, 1997 the whole area covered by its two
(2) FTAA applications, Mount Cresta and Mount dos Cuernos situated in the province of Cagayan and Isabela covering 99,792 and
98,820 hectares respectively were deemed relinquished.

On September 16, 1998 Xenia and Omega filed applications for exploration permit docketed as EPA-00052, EPA-00053 and
EPA-00054 and EPA-00055 situated within the two (2) relinquished FTAA applications of Dalton, Mount dos Cuernos and
Mount Cresta.

On August 5, 1999, the MGB Director issued a memorandum which resolved once and for all the questions regarding the
succession of ownership of mining rights affecting the EPAs of Xenia and Omega. Based on the facts presented and submitted to
the Director, he ruled that the EPAs of Xenia and Omega do not have any conflict with the remaining FTAA applications of Dalton
in view of the relinquishment done earlier. Moreover, on August 13, 1999, the Regional Director of the MGB Regional Office No. II,
made a pronouncement that there is no intervening right over the applied areas of Xenia and Omega.

On September 27, 1999, the Central Office of the MGB issued the certificates of posting for Xenia and Omega.

Except for EPA-00055, no amendments have been made on the description of the areas proposed to be covered by EPA-00052,
EPA-00053 and EPA-000054. As for EPA-00055, inasmuch as a portion of the area applied for was within a forest reserve and
considering conflicts with the areas covered by other mining applications, particularly FTAA No. 18 of Talibayog Mining Corp. filed
on January 24, 1996 and EPA No. 39 filed by Ronquillo Mining Corporation on July 14,1997, the proposed permit area was
reduced to 10,368 hectares.
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8. Solicitors’ Report - Philippine Tenements

In order to comply with the minimum capitalization requirement under MO 99-10, the applicants for EPA-00052, EPA-00053,
EPA-00054 and EPA-00055, Xenia and Omega, have applied to the Philippine Securities and Exchange (Philippines SEC) for an
increase in their authorized capital stock to Ten Million Pesos (P10,000,000), with the total paid-in capital of each being in the
amount of Two Million and Six Hundred Thousand Pesos (P2,600,000), which applications were approved on August 28, 2001 and
November 29, 2001, respectively. Nevertheless, the current equity structure of the applicants will not give rise to the application of
the qualified person rule under MO 99-10 inasmuch as not more than seventy percent (70%) of their respective authorized capital
stock is held by a stockholder which also owns more than seventy percent (70%) of the capital stock of another mining company.

In accordance with the requirements for area clearance under applicable regulations, clearances have been obtained from various
government agencies to ascertain whether the respective areas applied for are available for the grant of an exploration permit. To
date, with respect to EPA-00053 and EPA-00054, the NCIP Regional Office No. II has already endorsed the clearances to the
NCIP National Office with the confirmation that the areas are neither covered by any valid CADC or CADC application/s.
However, the NCIP National Office has yet to issue the final clearances for both applications in view of Memorandum No. 03-12-
01 (Series of 2001) declaring a moratorium on the issuance of CADCs which has not been lifted to date.With respect to EPA-
00052 and EPA-00055, there is still a need for the applicants to submit the certification and proof of consultation with the
Provincial Council. The applicant will submit the requirements within the current year.

The publication of the required Notices of Application was effected through the requisite posting at the proper government
offices, publication in various print media, as well as public announcements through radio broadcast. With respect to EPA-00053
and EPA-00054 certifications have been issued by the Regional Director of the MGB Regional Office No. II attesting to the fact
that the applicants have fully complied with all the requirements stipulated under DAO 96-40.With respect to EPA-00052 and
EPA-00055, the applicants have yet to submit the affidavit/certificate of posting which the applicants intend to submit within
current the year.

LABO PROJECT
E. Mineral Production Sharing Agreement No. 119-98-V

Grantee : Jericho Mining Corporation

Assignee : Indophil Resources Phils., Inc.
This Agreement was signed on June 4, 1998 and registered with the MGB on June 23, 1999 covering a contract area of 995.3844
hectares located in Camarines Norte, a province located in the southern part of Luzon.

IRPI acquired the rights to the MPSA from Jericho Mining Corporation by virtue of an Option Agreement dated June 18, 1997
under which IRPI has the option to acquire title and mine the area covered by MPSA No. 119-98-V subject to royalty payment in
the amount calculated at the rate of two and a half (2.5%) percent of the net smelter return from any future mineral production.
On June 10, 1999, IRPI entered into an Option Exercise Agreement in consideration of which it paid the option exercise price of
One Million Pesos (P1,000,000.00). IRPI agreed to pay Jericho a royalty on all minerals mined or extracted from the subject
mining tenements following commencement of mining activities therein. During the period from the exercise of the option and
the date on which the first royalty is due, IRPI agreed to pay Jericho the amount of One Hundred Thousand Pesos (P100,000),
payable annually within 28 days after each anniversary of the closing date of the option exercise.

IRPI commenced exploration activities on June 4, 1998. Under the MPSA, it had two (2) years thence or until June 4, 2000 within
which to complete the exploration process. IRPI filed a request for a two-year extension of the original exploration period stated
in the MPSA, which the MGB Central Office subject to the explicit condition that the renewed exploration period will commence
only on September 26, 2001 and terminate on September 25, 2003.

IRPI submitted a Progress Report with MGB which sets out its compliance with as well as the details of the exploration work
done on the coverage area, which are consistent with its proposal. As per its Progress Report, IRPI actually spent a total amount
of about Fifteen Million Eight Hundred Sixteen Thousand Seven Hundred Twenty-Three and 79/100 Pesos (P15,816,723.79) which
is well in excess of its proposal of about Four Million Two Hundred Twenty Thousand Pesos (P4,220,000.00)

IRPI likewise submitted to MGB an Environmental Work Program on June 6, 2000 providing details of the environmental impact
control and rehabilitation activities proposed during the exploration period including the costs to enable sufficient financial
resources to be allocated to meet the environmental and rehabilitation commitments in compliance with the requirement under
Section 168 of the Revised Implementing Rules and Regulations of the Mining Act. As regards environmental management of the
project, the estimated cost therefor is Five Hundred Fifteen Thousand Pesos (P515,000).

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IRPI has not made any relinquishment of its contract area to date.This is justified by the fact that the contract area under MPSA
covers only 995.3844 hectares, whereas under the MPSA it is allowed to retain 5,000 hectares after final relinquishment.

IRPI has complied with its obligations under the MPSA to pay occupation fees to the Municipal Treasurer of Labo, Camarines
Norte. Occupation fees for the current year are due for payment on or before June 4, 2002.

F. Mineral Production Sharing Agreement Application No. AMA-V-0197

Applicant : Dennis Palado

Assignee : San Christo Mineral Exploration Corporation
This application was filed on September 9, 1997 by Mr. Dennis Palado. The original proposed contract area covers 2,430 hectares
situated in the municipalities of Labo and Paracale, Province of Camarines Norte.

On May 21, 1997 an Option Agreement was executed between the Palado group, as optionor and San Christo as optionee
whereby the latter, was granted the option to acquire the area covered by the subject application by purchase, assignment,
transfer, waiver, abandonment, cancellation or amalgamation, subject to the payment of royalty to the optionor in an amount
calculated at the rate of 2.5% of the net smelter return as defined in the Option Agreement. Pursuant to the terms of the Option
Agreement, San Christo shall pay an advance on royalty of P125,000 per quarter, subject to reimbursement to San Christo
through deduction from the royalty due to the Palado group. Until the advances have been reimbursed, the Palado group shall
receive only seventy-five percent (75%) of the royalty due. San Christo can, however, acquire the subject mining tenements
anytime from the Palado group upon the payment to the latter of the amount of P30,000,000, in which case San Christo shall
acquire the mining tenements and all rights including the royalty due to the Palado Group.

San Christo has already exercised its option under the said agreement in a Deed of Assignment executed on January 24, 2000
between the Palado group, as Assignor, and San Christo, as Assignee, whereby the Assignor transferred and conveyed in favor of
the Assignee all its rights and interests in the application for MPSA No. AMA-V-0197, subject to the terms and conditions of the
original Option Agreement of May 21, 1997. This Deed of Assignment was registered with the MGB on April 6, 2000.

The areas covered by this application are the subject of a case initiated by the applicant entitled: “Dennis Palado, et al. vs. Eikon
Minerals, Inc. et al.” [Mines Adjudication Board Case No. 069-98 (Mines Administrative Case No. R-5-M-97-007); Mines
Administrative Case No. R-5-M-97-007]. Palado et al. filed a petition for cancellation of two (2) Mines Operating Agreement
which they had separately entered into with Eikon Minerals, Inc. and Aranzazu Realty Development Corporation over certain
tenements located in the Municipalities of Labo and Paracales alleging failure on the part of the respondents to reasonably
exercise their respective options within the stipulated period. The Panel of Arbitrators dismissed the petition on the grounds that
the same was not verified, the formal requirements were not duly complied with, and that the panel had no jurisdiction over the
petition. Upon denial of their motion for reconsideration, Palado et al. lodged an appeal with the MAB of the MGB. MAB ruled in
favor of Palado et al. and declared the subject MOAs cancelled. A Motion for Execution of the said decision is pending approval.

San Christo is in full compliance with the minimum capitalization requirement under MO 99-10 since it has already increased its
authorized capital stock to P10,000,000, with the total paid-in capital being in the amount of P2,600,000. Nevertheless, the
current equity structure of San Christo will not give rise to the application of the qualified person rule under MO 99-10
inasmuch as not more than seventy percent (70%) of its authorized capital stock is held by a stockholder which also owns more
than seventy (70%) percent of the capital stock of another mining company.

In the course of the evaluation of the application, the MGB Regional Office No.V directed San Christo to amend its application
and segregate the portions which were found to be unavailable for inclusion in the contract area. The total contract area, as
amended, covers 1,878.1671 hectares which, based on the records of the MGB Regional Office No.V, do not appear to overlap
with areas subject of other existing mining rights or applications.

The requirements under the law for the approval of this MPSA application have been complied with as determined by the MGB
Regional Office No.V. The application had been accordingly endorsed to the MGB Central Office for further evaluation, final
review and eventual approval by the MGB Director. San Christo has substantially complied with the letter dated August 3, 2001
from the MGB Central Office advising it of certain deficiencies it needs to submit/comply with in order that its application may
finally be approved.

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LEYTE PROJECT
G. St. Bernard Mineral Production Sharing Agreement No. 169-2001

Applicant : Caraga Golden Triangle Mining Corporation, Inc.

Assignee : San Christo Mineral Exploration Corporation
The application in relation to the MPSA was filed on August 25, 1997 in the name of Caraga Golden Triangle Mining Co., Inc.
(“Caraga”) covering an area of 891.1692 hectares located in the Province of Leyte.

San Christo entered into an Option Agreement with Caraga on December 18, 1997, under which San Christo was granted the
option to acquire title to and mine the area covered by MPSA. Application No. 0000050-VIII subject to royalty payment in an
amount calculated at the rate of either one percent (1%) of the Gross Output or five percent (5%) of the Projects Net Revenue,
whichever is greater. San Christo is bound to pay an advance or royalty of P500,000 annually, from the date of the option
exercise until mining commences, subject to reimbursement to San Christo through deduction from the royalty due to Caraga.

San Christo exercised its option under an Option Exercise Agreement dated January 27, 2000. Caraga and San Christo also
executed a Deed of Assignment on January 27, 2000 whereby Caraga assigned its rights and interests on the application in favor of
San Christo. The said Deed was registered with the MGB on February 1, 2000 and approved on April 5, 2000.

San Christo is in full compliance with the minimum capitalization requirement under MO 99-10 since it has already increased its
authorized capital stock to P10,000,000, with the total paid-in capital being in the amount of P2,600,000. The current equity
structure of San Christo will not give rise to the application of the qualified person rule under MO 99-10 inasmuch as not more
than seventy percent (70%) of its authorized capital stock is held by a stockholder which also owns more than seventy percent
(70%) of the capital stock of another mining company.

Based on the records of the MGB Regional Office No.VIII, the area covered by the application, as amended, does not overlap with
areas which are the subject of other existing mining rights or applications.

The subject MPSA application was approved by the DENR on January 16, 2001 and registered with the MGB Regional Office in
the Province of Tacloban on March 21, 2001. Since the approval of the MPSA on 16 January 2001, San Christo has been actually
conducting exploration activities in the areas covered thereof, and in compliance with the requirement of the law and the
provisions of the MPSA, it regularly submits quarterly Activities Progress Reports with MGB Regional Office No.VIII. As of the
date of this Report, San Christo has submitted the 1st, 2nd and 3rd quarterly Activities Progress Reports for the year 2001. The
4th quarter Progress Activity Report, Annual Exploration Activity Accomplishment Report, Annual Environment Activity Report,
Annual Mineral Resource Inventory Report, 4th quarter Energy Consumption Report were received by said office via courier on
February 12, 2002. So far, however, only the first quarter report has been officially verified and validated by the technical
personnel of MGB Regional Office No.VIII.

The exploration period will expire on January 15, 2003. Occupation fees for the current year were paid on February 20, 2002.

H. Sogod Mineral Production Sharing Agreement Application No. APSA-000037-VIII

Applicant : UP Mines, Inc.

Co-Venturer : Indophil Resources Phils. Inc.
This MPSA application was filed on July 11, 1996 in the name of UP Mines, Inc (“UP Mines”).The technical description of the area
was amended to cover 6,561 hectares situated in the province of Southern Leyte, following a protest lodged by Horizon
Resources Corporation (“Horizon”) subsequent to the publication of the application [Mines Administrative Case No. PA VIII]. In
that case, Horizon filed a protest against the MPSA application of UP Mines on the ground that it allegedly overlapped areas
covered by Horizon’s own MPSA application which was filed earlier than that of UP Mines’. UP Mines voluntarily amended its
application to exclude the contested portions and Horizon in turn withdrew the protest.

Pursuant to a Letter of Understanding (LOU) between UP Mines and IRPI dated June 2, 2000, a joint venture agreement was
constituted over the subject MPSA application whereby IRPI will fund exploration activities in order to earn a fifty percent (50%)
equity over a four (4) year period.Thereafter, expenditure shall be on a pro-rata basis. UP Mines may, however, elect to allow IRPI
to continue sole funding by spending Eight Million Pesos (P8,000,000) to raise its equity to seventy-five percent (75%). The LOU
was registered with the MGB on October 6, 2000.

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The applicant is in compliance with the minimum capitalization requirement under DAO 99-10 as its authorized capital stock is
P65,000,000, with a paid-up capital of P4,062,500. It appears, however, that there is a possibility that the qualified person rule may
apply to UP Mines since more than seventy (70%) of its equity is owned by persons who also own more than seventy (70%)
percent of the equity in another company, Rocky Mountain Aggregates Corporation.The aggregate size of the proposed
permit/contract areas of Rocky Mountain Aggregates Corporation and UP Mines, i.e. 34,015 hectares, exceeds the area ceiling of
32,400 hectares under the Mining Act.The applicant will be required to amend the area covered by the application by requiring it
to relinquish the excess area.

The applicant has obtained NCIP certification as well as favorable endorsement by the Municipal Council (Sangguniang Bayan) of
Sogod which had earlier lodged a protest over the application. However, the applicant still needs to submit Proof of Consultation
with the Provincial Council (Sangguniang Panlalawigan) of Southern Leyte. The applicant intends to submit the said document
within the current year.

In accordance with the requirements for area clearance under applicable regulations, the applicant has secured clearances from
the Forest Management Services (FMS) and Land Management Services (LMS) of the DENR to ascertain whether the area applied
for is available for the grant of an exploration permit. The applicant, however, still has to secure a clearance from the
Environmental Management Services (EMS).

The publication of the requisite Notices of Application for Exploration Permit for the subject application was made by the
requisite posting at the proper government offices, publication in various print media, as well as public announcements through
radio broadcast.

I. Sogod Exploration Permit Application No. EXPA-000019-VIII

Applicant : Rocky Mountain Aggregates Corporation

Co-Venturer : Indophil Resources Phils., Inc.
This application was filed on January 20, 1999 by Rocky Mountain Aggregates Corporation (RMAC) covering an area of
16,362 hectares.

Pursuant to a binding Letter of Understanding dated June 2, 2000 between RMAC and UP Mines, Inc. (“UP Mines”), on the one
hand, and IRPI, on the other hand, a joint venture agreement was constituted over the subject EP application whereby IRPI will
fund exploration activities in the amount of P8,000,000 over a four-year period in order to earn fifty percent (50%) equity.
Thereafter, expenditure shall be on a pro-rata basis. However, IRPI may be allowed to continue sole funding by spending the
accumulated amount of not more than P8,000,000 to raise its equity to seventy-five (75%) percent. Should either party decide
not to make further expenditures, its equity shall be diluted at earn in rate i.e., for the first fifty percent (50%), earn in rate is
P160,000 per one percent (1%) equity and above fifty percent (50%) up to seventy five percent (75%), the earn in rate is P320,000
per one percent (1%) equity. If either party’s equity falls below 25% they automatically retire to a one percent (1%) net smelter
return royalty from any future mineral production. IRPI shall have the right to withdraw at any time after spending P4,000,000 but
will only earn equity after spending P5,000,000. IRPI shall have the right to earn a further 25% equity by spending an additional
P8,000,000 should RMAC allow IRPI to continue sole funding of exploration activities. Should a MOA be signed between RMAC,
UP Mines and IRPI, IRPI is to pay RMAC the amount of P250,000 upon approval of the EP; another P250,000 upon approval of
the MPSA; and P500,000 on the first anniversary of the later approval. IRPI must reimburse RMAC for application costs after
approvals. The Letter of Understanding was registered with the MGB on October 6, 2000. (The Company has not paid any
amount under this LOU to date)

In order to comply with the minimum capitalization requirement under the qualified person rule, RMAC increased its authorized
capital stock to Ten Million Pesos (P10,000,000) Pesos. However, the paid-up capital as appearing in the Amended Articles of
Incoporation thereof is indicated to be P2,312,000 or less than P2,500,000. It also appears that there is a possibility that the
qualified person rule may apply to the applicant since more than seventy percent (70%) of its equity is owned by persons who
also own more than seventy percent (70%) of the equity in another company, UP Mines, Inc.The aggregate size of the proposed
permit/contract areas of RMAC and UP Mines, Inc., i.e. 34,015.00 hectares, exceeds the area ceiling of 32,400 hectares under
the Mining Act. The applicant will be required to amend the area covered by the application by requiring it to relinquish the
excess area.

Based on the records of the MGB Regional Office No.VIII, the area covered by the application, as amended, does not overlap with
any other areas which are the subject of existing mining rights or applications.

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8. Solicitors’ Report - Philippine Tenements

In accordance with the requirements for area clearance under applicable regulations, clearances have been obtained by IRPI from
various government agencies to ascertain whether the area applied for is available for the grant of an exploration permit.The
requisite publication and posting of the Notices for the subject application have yet to be complied with.

HINOTONGAN PROJECT
J. Exploration Permit No. EXP-006 (97) NOR

Permittee : PNOC-Energy Development Corporation

PNOC-Energy Development Corporation (PNOC-EDC) filed its EP application on January 21, 1997 and was granted EXP-006
(97) which was registered on November 21, 1997.The technical description of the permit area covers an area of 14,051.62
hectares situated in the municipalities of Valencia, Amlan, San Jose, Sibulan and Sta. Catalina, Negros Oriental.

The term of the EP expired last November 21, 1999. However, in a Letter dated November 18, 1999, PNOC-EDC applied for the
renewal and two-year extension of its EP and submitted thereafter all documentary requirements. The application for first
renewal and two-year extension was approved on January 10, 2002. The 2-year extension thus commenced last January 10, 2002
and will expire on January 9, 2004. Through a Letter dated February 12, 2002, MGB Central Office Director, Horacio Ramos,
endorsed/forwarded the approved renewal to MGB Regional Office No.VII for registration. Payment of occupation fees is due
within fifteen (15) days after said registration.

IRPI’s right to conduct exploration activities in the PNOC-EDC EP Area was derived from a binding Letter of Understanding
(“LOU”) executed on June 19, 2000 renewable every year for a maximum of 4 years. The LOU was registered with the MGB on
October 9, 2000. IRPI is liable for all exploration costs including renewal costs of EP.

The LOU provides for IRPI’s exclusive right to conduct exploration in the permit area for a 4-year period subject to the payment
of P250,000 to PNOC-EDC upon signing of the LOU covering the first year of exploration; P500,000 at the start of the first
extension covering the second year of exploration; and P1,250,000 at the start of the second extension covering the third and
fourth year of exploration. Failure to pay any of said amounts results in the termination of the LOU. To implement the two-year
work program submitted by PNOC-EDC, IRPI agreed to spend a minimum of US$50,000 on exploration annually, and provide
PNOC-EDC six monthly technical reports. IRPI has so far paid the amount of P250,000 upon signing of the LOU as well as the
commitment fee of P500,000 on February 19, 2002 covering the second year of exploration as provided under the LOU.

The LOU lapses and terminates upon: (a) due execution and approval of a Memorandum of Agreement or Joint Venture
Agreement between IRPI and PNOC-EDC, (b) non-renewal or cancellation of EP, or (c) IRPI’s non-compliance with LOU terms.

IRPI has the right to earn a 65% equity in a possible joint venture partnership to be formed by IRPI and PNOC-EDC after IRPI
shall have spent at least US$2miilion for exploration. PNOC-EDC to have 35% equity, free carried up to completion of Feasibility
Study, and to begin pro rata contribution upon completion of Feasibility Study or IRPI’s expenditure of US$10million, whichever
comes first.

IRPI shall have the right to withdraw from the LOU upon 30 days notice to PNOC-EDC. Withdrawal shall result in IRPI’s
automatic forfeiture of all rights and interests in Project Area and surrender to PNOC-EDC of all data reports, maps, results, etc.
generated, without any right of reimbursement for costs and expenses.There is no express stipulation mandating PNOC-EDC to
apply for the further renewal and last 2-year extension of the EP to cover the 4-year exploration period under the LOU.

While seeking the renewal and/or extension of the LOU, IRPI, through a Letter dated June 11, 2001, also sought a moratorium on
the LOU citing as reason the very slow progress of the MGB in granting the extension of the EP as a consequence of which IRPI
had not been able to fully utilize the first year of the LOU. PNOC-EDC granted IRPI’s aforementioned requests through a Letter
dated January 17, 2002. Accordingly, the first extension of the LOU covering the second year of exploration came into effect last
February 24, 2002, forty-five (45) days from the date of the renewal of the EP by the MGB on January 10, 2002.

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BUDA PROJECT
K. Exploration Permit Application No. XI-095

Applicant : San Christo Mineral Exploration Corporation

L. Exploration Permit Application No. XI-096

Applicant : San Eduardo Mineral Exploration Corporation

Assignee : Indophil Resources Philippines, Inc.
These applications were filed on August 10, 1998 over areas straddling three (3) provinces namely: the Provinces of Davao del
Norte, North Cotabato and Bukidnon, the entirety of which fall within the Surigao-Agusan Davao Forest Reservation. Portions of
the proposed permit area are also located within Mt. Kimongol Forest Reserve and the proposed Mt.Tangkulang Strict Nature
Reserve which also constitutes a mossy forest (Wilderness Area) which is located above 1000 meters elevation (and, hence,
closed to mining applications).

San Christo amended its application to exclude therefrom the areas covered by the proposed Mt.Tangkulang Strict Nature
Reserve. The description of the area applied for, as amended, comprises 13,756.67915 hectares, which does not appear to overlap
with areas which are the subject of existing rights or applications. San Christo, however, declared its interest to explore the
Reserve areas and reserved its “prior rights” over the excluded areas, in case the same is opened later on to mining applications.

Certain questions were also raised on the ground that the areas covered by EPA Nos. XI-095 and XI-096 filed by San Christo
and San Eduardo, respectively, were in conflict with the FTAA areas applied for by Plantation Mining Corporation (“PMC”) and
Silanganan Resources Corporation (“Silanganan”). The said area conflicts were resolved by the MGB Regional Office No. XI
through its Memorandum dated 9 September 1999 pursuant to which the areas covered by San Christo’s EPA No. XI-095 were
originally declared to be open at the time of the said application’s filing in light of PMC’s previous divestment of its FTAA
application in favor of the Philippine Government and Silanganan’s defective filing of an FTAA application over forest reserve
areas. The same argument may be invoked in favor of San Eduardo’s EPA No. XI-096.

On May 19, 1997, IRPI signed an Option and Joint Venture Agreement (“JVA”) with Silanganan and Bondoc Resources Corporation
(collectively the “Plantation Group”) for the creation of an unincorporated joint venture for the development of the Buda and the
Bondoc properties. The main provisions of this Agreement are:

The Company has the exclusive option to earn interest in the Buda and Bondoc properties and the right to participate in a Joint
Venture with the Plantation Group to explore, evaluate, develop, exploit and operate the Buda and Bondoc properties.

The Company has the sole and exclusive two-year option to increase its interest in the Buda and Bondoc properties and the Joint
Venture from the initial 0% to 50% by contributing the following to the Joint Venture expenditures:

a. US$600,000 on the Buda property with a minimum US$200,000 for the first year;

b. US$200,000 on the Bondoc property with a minimum US$100,000 for the first year;

c. All rents, rates, survey fees and other charges due during the Option Term to maintain the Buda and Bondoc properties in
good standing; and

d. All rents, lease expenses, damages, and other compensation attendant to the exploration and development of the Buda and
Bondoc properties which may be necessary to obtain access rights, surface rights, water rights, etc.

Joint Venture Interest of a non-contributing party to be diluted upon election of the other parties.

The Company has the right to act as Manager during the Option Term. Thereafter, the Manager will be determined by the Joint
Venture Operating Committee.

The Company has the right to secure a reasonable extension of the Option Term upon the Company’s showing it had spent at
least US$500,000 on the Buda property within the Option Term, that it has proposed a work program, and that it has financial
capability to seasonably comply with the Option expenditures in order to complete such work program.

The Company has the right to effect the transfer in its favor of its beneficial interest in the Buda and Bondoc properties
respectively held in trust for the Joint Venture by Silanganan and Bondoc. Should this not prove feasible, the Plantation Group shall

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8. Solicitors’ Report - Philippine Tenements

either constitute the Company as shareholder in a substituting Joint Venture entity or transfer the corresponding shares in
Silanganan and/or Bondoc to the Company.

The Company has the right to terminate the Option with respect to any one of the Buda and Bondoc properties upon three
months written notice to the Plantation Group, full payment of all financial obligations until the effective date of termination, and
execution of the proper quitclaims and waivers.

Through a Letter dated 21 July 2000 which was duly conformed to by IRPI, Silanganan advised IRPI that they were abandoning the
same tenement applications which form the subject matter of the instant JVA. In the said Letter, Silanganan likewise advised IRPI
that they were terminating the JVA and that they were releasing IRPI and its affiliates/subsidiaries from all duties and obligations
relating thereto. Silanganan likewise manifested that IRPI was free to acquire, apply for, or otherwise enjoy the unencumbered
benefit of all the properties covered under the JVA. However, further exploration and development of the Bondoc properties have
been dropped altogether by IRPI.

San Christo is in full compliance with the minimum capitalization requirement under MO 99-10 since it has already increased its
authorized capital stock to P10,000,000, with the total paid-in capital being in the amount of P2,600,000. Nevertheless, the current
equity structure of San Christo will not give rise to the application of the qualified person rule under MO 99-10 inasmuch as not
more than seventy percent (70%) of its authorized capital stock is held by a stockholder which also owns more than seventy
percent (70%) of the capital stock of another mining company.

In connection with EPAXI-096, a Deed of Assignment was executed on August 2, 2000 between San Eduardo and IRPI. This
instrument was duly registered with MGB on August 4, 2000, San Eduardo assigned all its rights and interest in EPA No. XI-096 in
favor of IRPI for a total consideration of ONE PESO (P1.00). In compliance with the regulatory provisions of DAO 99-34, San
Eduardo caused the registration of the said Deed of Assignment with the MGB Regional Office No. XI. San Eduardo likewise
caused the registration of the requisite Secretary’s Certificate evidencing the corporate authority of San Eduardo and its
President, Alan G. Buenavista, to execute and enter into the Deed of Assignment with IRPI.

In accordance with the requirements for area clearance under applicable regulations, clearances have been sought from various
government agencies to confirm whether the areas applied for under EPA XI-095 and EPAXI-096 are available for the grant of an
exploration permit.

The processing of EPA No. XI-095 and EPA No. XI-096 are held in abeyance pending submission of certain documentary
requirements by the respective applicants/ assignee. The applicants intend to submit the required documents within the
current year.

M Buda Exploration Permit Application No. APE-X-30 (EXPA-0000-11-X)

Applicant : Silanganan Resources Corporation

Assignee : Indophil Resources NL
This application was filed on September 11, 1996 by Silanganan with MGB Regional Office No. XI in Davao City. On October 11,
1996, however, the records of the said application were forwarded to MGB-Regional Office No. X on the basis that the majority
of the area covered by the said application is within the territorial jurisdiction of MGB Region X.The area covered by the EP
application is enclosed within the proposed contract area of an FTAA application which was also filed by Silanganan on the same
date. Accordingly, the application which was formerly denominated as APE-X-30 had been assigned a new Exploration Permit
Application Number denominated as EXPA-0000-11-X. The new technical description of the proposed permit area which covers
12,964.244 hectares is as follows:

Cor. Latitude Longitude Cor. Latitude Longitude

o o o o
1 7 33’ 00” 125 11’ 00” 7 7 37’ 30” 125 16’ 00”
o o o o
2 7 41’ 00” 125 11’ 00” 8 7 36’ 00” 125 16’ 00”
o o
o o
3 7 41’ 00” 125 17’ 00” 9 7 36’ 00” 125 15’ 30”
o o

4 7
o
39’ 00” 125
o
17’ 00” 10 7 34’ 30” 125 15’ 30”
o o
o o 11 7 34’ 30” 125 13’ 30”
5 7 39’ 00” 125 16’ 30” o o
o o 12 7 35’ 00” 125 13’ 30”
6 7 37’ 30” 125 16’ 30”

Pursuant to an Option and Joint Venture Agreement executed on May 19, 1997 to which the Company and Silanganan are parties,
an unincorporated joint venture was formed for the purpose of developing certain mining areas, including the area covered by the
subject EP application. A summary of this Agreement is contained in Sections K and L of this Report.

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A Deed of Assignment was subsequently executed on August 20, 2000 by Silanganan and others in favor of the Company, whereby
the subject EP application was transferred to the latter.

In a letter addressed to the MGB dated July 29, 2000, Silanganan manifested its inability to comply with the minimum capitalization
requirement under MO 99-10. However, the Company indicated in its letter dated August 4, 2000 to MGB Regional Office No. X
its intention to comply with MO 99-10. On March 7, 2001, the Company submitted and filed with MGB Regional Office No. X
authenticated records of the company showing that it has an authorized capital stock of $100,000,000.00 and issued paid capital of
$7,216,983 which constitutes proof of its sufficient capitalization. The current equity structure of the Company, however, will not
give rise to the application of the qualified person rule under MO 99-10 inasmuch as not more than seventy percent (70%) of its
authorized capital stock is held by a stockholder which also owns more than seventy percent (70%) of the capital stock of
another mining company.

Based on the records of the MGB Regional Office No. X, the area covered by the application does not overlap with areas which
are the subject of existing mining rights or applications. Significantly, however, the whole area covered by the application is
situated within the area subject of Certificate of Ancestral Domain Claim (CADC) No. RX-CADC-005 issued on May 15, 1995 in
favor of the Federation of Manobo-Matigsalog Tribal Councils. Hence, prior informed consent by the CADC claimants must be
obtained as a condition for the grant of the permit applied for. The applicant has not yet obtained such consent from the CADC
claimants concerned.

In accordance with the requirements for area clearance under applicable regulations, clearances have been sought or obtained
from various government agencies to ascertain whether the area applied for is available for the grant of an exploration permit.
Such clearances, however, may be reviewed and are subject to further verification by the MGB due to the fact that these were
issued also in connection with the FTAA application of Silanganan which appears to have already been allowed to lapse and
deemed abandoned by the MGB.

No certifications have yet been secured attesting to the fact of consultation by the applicant with local legislative councils. The
Notice of Application has not yet been published.

In its letter dated November 13, 2001, which was received by MGB Regional Office No. X on November 27, 2001, the Company
requested deferment of the publication and posting of its EP application until the first quarter of 2002, citing the reason that
negotiations with the Federation of Manobo-Matigasalog Tribal Council (FEMMATRICS) have been suspended due to internal
dissent within the NCIP, the moratorium on NCIP Pre-Condition Certification and the supposed forthcoming revisions of the
Implementing Rules and Regulations of the IPRA. In its letter dated December 3, 2001, the OIC Regional Director, Mr. Glenn
Noble, of the MGB Regional Office No. X approved and allowed the deferment of the publication until the first quarter of 2002,
after finding merit in the request made by the Company. Thus, the Notice of Application has not yet been published.
Furthermore, based on the records of MGB Regional Office No. X, no certifications have yet been secured attesting to the fact of
consultation by the applicant with the local legislative councils. No EP shall be approved unless this requirement is complied with
and any adverse claim/protest/opposition thereto is finally resolved.

MANAT PROJECT

N. Mineral Production Sharing Agreement No. 094-97-XI

Grantee : Alsons Development and Investment Corporation

Co-Venturer : Southern Exploration Corporation

This Agreement was signed on November 20, 1997 and registered with the MGB on March 3, 1998 covering an area of 1,858.4114
hectares located in Davao. The requisite area clearances were obtained during the latter part of January 1998.

In its letter to the MGB Director dated September 27, 1999 which was filed last October 12, 1999, Alsons Development and
Investment Corporation (“Aldevinco”) requested a two-year extension of the exploration period of its MPSA ending November
20, 1999 which request is currently under final review and evaluation by the MGB Central Office. The 2-year extension will only
commence after the approval by the MGB of the request for extension filed by Aldevinco.

Inquiries made with MGB Regional Office No. XI which issued its latest certification last January 8, 2002 revealed that Aldevinco
has complied with the reportorial requirements as mandated under Section 270 of Chapter XXIX of the Revised Implementing
Rules and Regulations of the Mining Act and that it has paid its obligation for the annual payment of mining occupation fee for
calendar year 2001 to 2002. Occupation fees for the current year were paid on February 28, 2002.The Environmental Monitoring

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8. Solicitors’ Report - Philippine Tenements

and Community Affairs Divisions of the MGB Regional Office No. XI has likewise determined that Aldevinco has extensively
conducted exploration activities in its approved MPSA area and that the initial exploration activities undertaken by Aldevinco
therein substantially manifest that the company remained firmly committed to the exploration and development of the property.

Southern Exploration Corporation’s (SECO) involvement in the project is derived from a Joint Venture Agreement (JVA) which it
entered into with Aldevinco on April 10, 1999, the main provisions of which are as follows:

SECO has the right to earn a 50% Participating Interest (40% directly; 10% through a Qualified Philippine Investor, who is a “citizen
of the Republic or a corporation, association or partnership organized under the laws of the Republic at least sixty percent (60%)
of the capital of which is owned by citizen of the Republic,” by completing the first three stages of the work program and/or
meeting the required expenditure covenants of at least US$2.25million, as follows:

a. on or before the sixth (6th) month from the date of Agreement SECO is to complete the first stage of the work program
and/or incur expenditures of not less than US$300,000;

b. SECO is to complete the second stage of the work program within 24 months from the date of the Agreement and/or incur
additional expenditures of US$700,000 within the same period;

c. SECO is to complete the third stage of the work program within 24 months from the conclusion of the second stage or
incur additional expenditures of US$1,250,000 within the same period. After earn-in, expenses for exploration, development
and operation to be shared on a pro rata basis. Non-contribution will result in a pro rata dilution of the Participating
Interest.

SECO has completed the first two stages and is now in the process of completing the third stage of the Work Program.

SECO has the right to form a Management Committee consisting of one representative each from SECO and Aldevinco for the
management of the joint venture.

SECO has the right to effect the assignment of the tenements and Joint Venture properties to a Philippine registered partnership
or holding company to be organized by SECO and Aldevinco for this purpose.

The JVA was registered with MGB Regional Office No. XI on March 14, 2000.

BUNAWAN PROJECT
O. Mineral Production Sharing Agreement Application No. APSA-090-X

Applicant : Camarin Mining Corporation

Optionee : Indophil Resources Phils. Inc.
This application was filed on September 24, 1996 by Camarin Mining Corporation (“CMC”). CMC signed an Option Agreement
with IRPI, on 18 September 1997 granting IRPI an option to acquire the property subject of the application within a period of four
(4) years or until 18 September 2001 for P70.0 Million, which document was registered with MGB-Surigao City Region XIII on
November 17, 1997.

On July 28, 1998, IRPI declared Force Majeure due to adverse claims/protests thus effectively suspending the option term.

In the opinion of the Regional Director of MGB Region XIII, CMC has satisfactorily complied with the formal requirements under
the Mining Act and applicable rules and regulations.

The MPSA application is the subject of adverse claims/protests, as follows:

1. “Aegis Mining Corporation vs. CMC” (Mines Special Case No. POA-XIII-031)

Aegis Mining Corporation contended that the MPSA application filed by CMC is not the proper application under existing laws
because the subject area covered by the MPSA application falls within the Agusan-Davao Surigao forest reserve. Aegis contends
that the appropriate application is for an Exploration Permit.

The Panel of Arbitrators ruled in favor of CMC saying that CMC’s MPSA application is valid and subsisting and has prior rights
over the subject area. Aegis elevated the case to the MAB alleging that the Panel committed serious errors on questions of law
and findings of fact which is still pending resolution.

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In the event that MAB reverses the decision of the Panel of Arbitrators, it will result in the denial of CMC’s MPSA application over
the properties involved and the loss of the property.

2. “Valley Mining and Development Corporation (“Valley”) vs. CMC” (POA-XIII-33 Mines Special Case)

Valley filed an adverse claim on CMC’s MPSA application on the ground that the area covered by the said application overlaps
with that of its EPA.Valley raised basically the same arguments raised by Aegis. It stated thus:

“The CAMARIN MPSA application should be denied on the ground that CAMARIN violated the hereunder quoted provision of
DENR DAO 96-40, the existing mining rules and regulations, in securing a mining right within a forest reserve (Agusan Davao
Surigao Forest Reserve in this case) when it filed on September 24, 1996 an MPSA application over its DOLs/mining claims instead
of an EPA.”

In its decision, the Panel concluded that even assuming that the area covered by CMC’s MPSA application is within the forest
reserve established by Proclamation No. 369, CMC can still acquire mining rights thereto subject to some limitations set by law.

Once again, the issues as to whether or not CMC’s MPSA application covers an area within a forest reserve and whether or not
the MPSA application was the proper mining application, has been brought before the MAB on appeal by Valley. The basic and
primordial issues are similar to that of the case filed by Aegis. In the event that the MAB will reverse the decision of the Panel of
Arbitrators, it will result in the denial of CMC’s application.

3. “Picop Resources vs. Camarin Mining Corporation” (Special Case No. POA XIII-032)

Picop Resources, Inc. (“Picop”) filed an adverse claim/opposition to CMC’s application based on the following grounds:

a. CMC’s MPSA application overlaps with Picop’s Timber License Agreement TLA 43;

b. CMC’s MPSA is in violation of Presidential Warranty issued to Picop; and

c. CMC’s MPSA is not the appropriate mining application under the law.

The Panel of Arbitrators rendered a decision in favor of CMC disposing of similar issues raised in the cases filed respectively by
Aegis and Valley by reiterating its ruling therein. The only new issue that Picop raised in its appeal before MAB was whether or
not a portion of CMC’s MPSA application is in conflict with Picop’s 182,682 hectares of forest concession.

In essence, Picop contends that without its consent, the area covered by its Timber License Agreement is closed to mining
application. Picop cites Sections 15 and 19 of the Mining Act of 1995 to support its case. However, if the aforesaid provisions are
read together with other pertinent provisions of the Mining Act particularly Section 76 and Sections 105 and 108 of its
Implementing Rules and Regulations, it appears that the prior consent of the timber concessionaire is not necessary. The mining
applicant is only required to provide a written notice to the concessionaire as provided in the aforesaid provisions. This was in
fact the ruling of the Regional Trial Court of Davao in its decision involving Picop concerning the issue which was upheld by the
Court of Appeals. Thus, although the other grounds (which were the same grounds raised by Aegis and Valley) raised by Picop
have some basis, its contention that CMC must obtain its prior consent is without merit. However, in the unlikely case that the
MAB will reverse the decision of the Panel of Arbitrators, the decision will result in the denial of CMC’s MPSA application.

Very truly yours,

E. C. Jamora, Jr.

R.T. Cabahug-De Leon

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Indophil Section 09 14/3/02 6:05 PM Page 103

9.Tampakan Project

103
103
Indophil Section 09 14/3/02 6:05 PM Page 104

9 Ta m p a k a n P r o j e c t

This section of the Prospectus relates to the potential acquisition of an interest in the Tampakan Project in southern Mindanao,
containing one of the largest undeveloped copper-gold resources in South-East Asia.This acquisition is consistent with the
Company’s strategy to assess, and where appropriate, acquire an interest in advanced exploration properties with drill-indicated
resources.The Tampakan Project has reached an advanced stage of exploration and some preliminary feasibility studies have been
undertaken. Further work, including infill drilling for better resource definition and bulk sampling for metallurgical purposes, is
required to progress these studies.

The Tampakan Project, located in the southern Philippines, contains a major copper-gold deposit. Published geological resource
estimates (non JORC) for the Tampakan copper-gold deposit are 900 million tonnes at 0.75% copper and 0.3g/t gold at a 0.5%
copper cut-off grade.This equates to 6.75 million tonnes of contained copper and 8.68 million ounces of gold.

The Tampakan Project Area is subject to a Financial and Technical Assistance Agreement (the Columbio FTAA) signed between
WMC Philippines Inc. (WMCP) and the Philippines Government in March 1995.The validity of FTAAs are currently the subject
of a Supreme Court challenge (see Section 9.4).

The Tampakan Group of Companies (TGC) representing former claimowners within the Tampakan Project Area has executed a
sale and purchase agreement, and Deed of Absolute Sale, with WMC Resources International Pty Ltd (WMCI) for the purchase
of WMCP and Hillcrest Inc (Hillcrest). Conditional approval for the transfer of WMCP has been granted by the Secretary of the
DENR.This approval has been challenged by Lepanto Consolidated Mining Corporation (Lepanto).

The TGC was able to enter into the sale and purchase agreement and Deed of Absolute Sale because a conditional sale
agreement between WMCI and Lepanto, in respect of the purchase of WMCP and Hillcrest, triggered a right of first refusal (held
by the TGC), under an existing agreement between the TGC and WMCP.

The Company has agreements in place with the TGC to explore and develop any mineral deposits within the Tampakan Project
Area, subject to commercial viability, through an incorporated joint venture company that would wholly-own WMCP and
Hillcrest (see Section 9.5).

The Company has entered into agreements with MIM Holdings Limited (MIM) and Alsons Corporation (Alsons) that allows both
parties to purchase part of the Company’s interest in the incorporated joint venture company (see Section 9.5). If both parties
fully exercise their rights, the final Operating Interest will be held: MIM 60%, Indophil 30% and Alsons 10%.

The sale of WMCP and Hillcrest to the TGC is currently the subject of a legal challenge by Lepanto. Details of this challenge
are outlined in Section 9.3.

There are a number of risks associated with the Proposed Tampakan Acquisition referred to in Section 9.6 and elsewhere in
this Prospectus. Applicants should carefully consider these risks in making their investment decision as to whether to apply for
Shares in the Company.

9.1 Tampakan Project Summary Location and Infrastructure

Due to the existing legal proceedings, the Company and
Directors cannot guarantee that the proposed Tampakan
Acquisition will proceed to completion. Additionally, because
completion has not yet occurred Indophil and its consultants
have not had full access to the Project data. Accordingly, the
Tampakan Project has not been included in the Company’s
exploration project portfolio for the purposes of the
Independent Geologist’s Report in Section 7 or the
Solicitors’ Report - Philippine Tenements in Section 8.
The following project summary is based on public
domain information.
The Tampakan Project is centred approximately 50km north-
northwest of General Santos City in southern Mindanao, a
major growth centre in the Philippines with port facilities, a
recently completed international airport and good
infrastructure (Figure 9.1).The Tampakan copper-gold deposit
on which most of WMCP’s activity has been focused, is
accessed by 17km of gravel road from the main sealed
highway leading north from the city of General Santos.

104
Indophil Section 09 14/3/02 6:05 PM Page 105

Figure 9.1 Tampakan Project Location

9.Tampakan Project
2954m. Mt. Apo

Makilala

TAMPAKAN

Maguindanao
PROJECT
Cotab
ato Fa
ult

N. Cotabato
Sultan Kudarat

DIGOS

Central Mindanao
Davao

Cordillera
Alip Matanao Gulf
Fau
lt
Columbio
Lake
Buluan

Cotabato Sarangani
Basin Basin
Sultan Kudarat
S. Cotabato
Kiblawan
Koronadal

Dal
Tampakan ol F
Mt.
ault
Magolo
Bua
yan
Tampakan Deposit Fau
2293m.
lt
0 10 Mt. Matutum

Kilometres
Davao D
el Sur
South Cota
bato

Tampakan copper-
LUZON
gold deposit

Other prospects
GENERAL. Original FTAA
SANTOS
SAMAR Remaining FTAA

Area covered by
LEYTE Detailed Exploration
10N

Provincial Boundary
Sarangani
PROJECT MINDANAO
AREA
Bay

120E
Indophil Resources NL, February 2002.

Tenure Geology and Mineralisation

The Tampakan Project is held by WMCP under a Financial and The Tampakan Deposit is located near the northern end of a
Technical Assistance Agreement (the Columbio FTAA) with volcanic arc that extends from northern Sulawesi in
the Government of the Republic of the Philippines which Indonesia to Central Mindanao in the Philippines. The more
allows a company with up to 100% foreign control to explore extensively explored Indonesian sector of this arc hosts
for and develop major mineral projects (see Section 8). After several gold deposits including Toka Tindung, Mesel, Sulut,
statutory reductions, the Columbio FTAA currently covers an Lanut, and Pani with pre-mined resources totalling almost
area of 304.90 sq km and is in the exploration stage of the 10 million ounces, as well as several sub-economic porphyry
agreement.WMCP has entered into agreements with most copper-gold deposits.
local government organisations and indigenous groups in
respect of ongoing exploration and future development of the The Tampakan Deposit is interpreted to be a high-
Tampakan Project Area. FTAAs, as a form of mineral sulphidation epithermal blanket containing higher copper and
agreement, are currently the subject of a Supreme Court gold grades superimposed on an underlying lower grade
challenge on Constitutional grounds (see Section 9.4). porphyry copper-gold deposit. It has been drilled out over

105
Indophil Section 09 14/3/02 6:05 PM Page 106

9 Ta m p a k a n P r o j e c t c o n t ’d

an area of 2km by 1.6km at a density ranging from 320m by 320m to 160m by 160m with limited infill drilling at 80m spacing
(Figures 9.2 and 9.3). A total of 85 diamond drillholes for 31,473m were completed within the grid with most holes terminating
in low-grade porphyry copper-gold mineralisation at a depth varying from 350m to 450m.The mineralised zone at Tampakan forms
a coherent tabular body dipping gently to the southwest and outcropping on the western side of a ridge.This tabular mineralised
zone contains disseminated and locally fracture controlled copper sulphides (mainly digenite, bornite and enargite) hosted by
altered volcanic rocks.

Resources
Table 9.1 below is a tabulation of WMC’s published geological resource estimate in 1998 following the last phase of exploration
drilling on the Tampakan Deposit. The estimate provides a breakdown of the total indicated and inferred geological resource at
0.2% and 0.5% copper cut-off grades (COG). For the purposes of this Prospectus it is assumed that this resource estimate does
not comply with JORC definitions.

Table 9.1 Tampakan Geological Indicated and Inferred Mineral Resource Estimate
COG Resource Copper Copper Gold Gold
(Copper %) (million tonnes) (%) (million tonnes) (g/t) (million ounces)
0.20 2,500 0.48 11.96 0.20 16.08
0.50 900 0.75 6.75 0.30 8.68

Potential exists to upgrade this resource estimate but further drilling is required to convert this estimate to a measured and
indicated status (JORC) on which detailed mine-scoping studies can be based.

Exploration Potential
After early discovery, much of WMCP’s effort in the Columbio FTAA was focused on the drillout of the Tampakan Deposit, with
only 14 diamond drillholes for a total of 5450m being completed on other prospects within the Columbio FTAA. Consequently,
the Company believes that the Columbio FTAA outside the immediate environs of the Tampakan Deposit is under-explored and
has potential for the discovery of further gold and copper-gold mineralisation.

Previous Association
The Company’s Managing Director and Exploration Manager have had a long association with the Tampakan Project whilst
employed by WMC, including significant roles in the acquisition of the property and subsequent discovery of the Tampakan
Deposit. During their time of employment with WMC they built and maintained highly respected relationships with the local
communities. These relationships have continued and the TGC have recently obtained written support from local government
organisations in the Tampakan Project Area.

Tampakan Project Challenges

As with most major resource projects, the Tampakan Project would bring special challenges. The Tampakan Project’s size, technical
characteristics and location are some of the more important issues that will need to be addressed in respect of any future project
development.The community represents a major stakeholder in any future project development and their needs will require
careful consideration and understanding.The Company has entered into a technical services term sheet with MIM which, if MIM
exercises its option to acquire an interest in the Tampakan Project, will bring to the Tampakan Project an appropriate level of
international technical expertise in both mining, ore processing technologies and project development (see Section 9.5.5). MIM has
also subscribed for equity in the Company and as a result has become an important shareholder. Alsons Corporation, a member
of the Alcantara Group, a respected Filipino organisation with major business interests in Mindanao, will hold a 5% Operating
Interest in the Tampakan Project with an option to increase that Operating Interest to 10% subject to achieving certain
performance indicators.The Alcantara Group’s Philippines business expertise will be a significant advantage to the Company.

106
Indophil Section 09 14/3/02 6:05 PM Page 107

9.Tampakan Project
Figure 9.2 Plan Projection of Mineralisation and Drillhole Location - Tampakan Deposit
716,590mN

506,320mE
TAMPAKAN

A’
Exploration Base Camp
PROJECT
14 13
16 15 77 8

71 72 60
61 39 51
90
84 85
5 21
92 37 23
27 54
94 62 22 50 0 500
64 40 43
82 81 91 42 46
Metres
89 96
88 7 18 17
4 19 6 55

41 49
75 74
47 24 26
56 31
3 25
78 79 Plan projection of mineralised zone
70 52 67
at 0.5% Cu cut-off
72 69 53 68
29 20 Drillhole with direction
1 2 ASPAC Camp 48
45 28 36
38 30 Ro Fault
ad

87 35 33

86
A
504,400mE

83
714,350mN
Prepared by Indophil Resources NL, February 2002 and modified after Rohrlach B. et. al. June 1999

Figure 9.3 Longitudinal Projection Tampakan Deposit

Quaternary dacite
D8
A’
Clay and chlorite altered andesite
D5
Tampakan Cu-Au resource
D6
A 0.80
22.00
0.70
0.40
(0.5% Cu cut off)
253.00
D3 D4 0.30 Clay and silica altered andesite
1000 m. ASL D1 D2
0.70
0.80 20.00
0.80 119.00 0.70 0.10
117.00 1.00 0.10 133.00
0.60 141.00 0.80 0.20
0.40 128.00 ite
0.20 dr Cu (%) Significant
nhy Metre
it of a Au (g/t) Intersection
r lim
U ppe

Diorite 500 m.

500 m. ASL

Prepared by Indophil Resources NL, February 2002 Modified after WMCP, January 2001

107
Indophil Section 09 14/3/02 6:05 PM Page 108
9 Ta m p a k a n P r o j e c t
9.2 Details of the Proposed
Tampakan Acquisition
Summaries of most contractual agreements referred to below
are provided in Section 9.5.
The Company’s interest in the Tampakan Project results from
an agreement between the Company and the Tampakan Group
of Companies (TGC) summarised in Section 9.5.2.
The TGC has entered into an agreement with WMC
Resources International Pty Ltd (WMCI) to acquire WMC
Philippines, Inc. (WMCP) and Hillcrest Inc. (Hillcrest).WMCP is
party to the Columbio FTAA which gives it the right to a
100% interest in the Tampakan Project. Hillcrest has lodged an
FTAA application with the Philippines Government relating to
areas adjacent to the Columbio FTAA.
The TGC were the original claim-owners within the Tampakan
Project Area.They entered into agreements with WMCP that
allowed WMCP to acquire the rights to the Tampakan Project
Area and ultimately sign the Columbio FTAA. Under those
agreements, if WMCP elected to dispose of its interest in the
Tampakan Project, the TGC had a right of first refusal to
match the terms of any offer accepted by WMCP.
In July 2000, Lepanto Consolidated Mining Corporation
(Lepanto) signed an agreement with WMCP for the purchase
of WMCP and Hillcrest (Lepanto Sale Agreement).The
Lepanto Sale Agreement was conditional on the TGC not
exercising their right of first refusal. Following execution of the
Lepanto Sale Agreement,WMCI gave notice to the TGC.
The TGC subsequently gave notice to WMCI that they were
exercising their right of first refusal by matching the terms of
the Lepanto Sale Agreement.WMCI accepted the TGC’s offer,
signed a sale and purchase agreement with the TGC and
notified Lepanto that the Lepanto Sale Agreement could not
be finalised.
On 13 December 2000, the TGC, on behalf of WMCI, obtained,
from the Philippines Board of Investment, approval for the sale
of WMCP and Hillcrest. On 23 January 2001, the TGC and
WMCI signed a Deed of Absolute Sale. WMCI was in the
process of registering the Deed of Absolute Sale with the
DENR, as required under the sale and purchase agreement,
when Lepanto commenced legal action in the Philippines
against WMCI and the TGC. Details of this legal action are
provided in Section 9.3.
That part of the legal action restricting the sale process has
lapsed. Consequently, the Deed of Absolute Sale and a letter
requesting the Secretary to approve the transfer of shares in
WMCP and Hillcrest was lodged with the MGB and DENR on
25 July 2001. Following further submissions, the Secretary
accepted registration of the sale and approved the transfer of
the FTAA on 18 December 2001. Upon receiving notice of the
approval, Lepanto wrote to the Office of the President of the
Philippines seeking nullification of the Secretary’s approval of
108
c o n t ’d
the transfer of shares in WMCP. On 11 February 2002,
Lepanto lodged a Petition for Review with the Office of the
President.After all parties submitted their respective position
papers, the matter is now awaiting resolution by the Office of
the President.
9.3 Tampakan Legal Proceedings
In January 2001, Lepanto commenced an action in the Makati
Regional Trial Court (MRTC) of the Philippines to prevent
completion of the sale of the shares in WMCP and Hillcrest by
WMCI to the TGC.
As discussed in Section 9.2, the sale of the shares in WMCP
and Hillcrest to the TGC arose from the exercise by the TGC
of a right of first refusal to acquire the shares, granted under
an existing agreement between WMCP and the TGC. Lepanto
is challenging the validity of the TGC’s exercise of its right of
first refusal, on the grounds that the TGC’s offer to purchase
the shares did not exactly match Lepanto’s offer of July 2000.
Lepanto is also challenging the TGC’s qualification, under
Philippines mining legislation, to hold the Columbio FTAA.
Lepanto is seeking the enforcement of its rights to purchase
the shares under the conditional Lepanto Sale Agreement
and is seeking the annulment of the Deed of Absolute Sale.
In addition, Lepanto brought interlocutory proceedings to
forestall completion of the sale of the shares in WMCP and
Hillcrest to the TGC, pending a decision on the merits of
the case.
9.3.1 Interlocutory Proceedings
On 23 January 2001, Lepanto sought and obtained from the
MRTC a writ of preliminary injunction preventing completion
of the sale of the WMCP Shares and the Hillcrest Shares.
In response,WMCI and the TGC filed a motion challenging
the grant of the preliminary injunction. On 22 March 2001,
the MRTC decided to lift the preliminary injunction, subject
to the payment of a bond.The TGC lodged the bond with
the MRTC, and WMCI were in the process of registering
the Deed of Absolute Sale with the DENR, when Lepanto
filed a motion of reconsideration with the MRTC. As a result,
the MRTC left the preliminary injunction in place pending
further hearings.
On 20 April 2001, following further hearings, the MRTC
denied the motion for reconsideration and dissolved the
writ of preliminary injunction. On 23 April 2001,WMCI
attempted to again lodge the Deed of Absolute Sale with
the DENR. However,WMCI were advised by the DENR that
they could not register the Deed of Absolute Sale because
Lepanto had appealed the MRTC order of 20 April 2001
through a petition filed with the Court of Appeals of the
Philippines. On 26 April 2001, the Court of Appeals of the
Philippines imposed a temporary restraining order in respect
of the MRTC order.This temporary restraining order lapsed
on 29 June 2001.
Indophil Section 09 14/3/02 6:05 PM Page 109
On 28 February 2002, the Court of Appeals dismissed
Lepanto’s petition and upheld the MRTC’s order of 20 April
2001 denying Lepanto’s motion for reconsideration and
dissolving the writ of preliminary injunction.
The decision of the Court of Appeals may be appealed by
Lepanto by way of a motion for reconsideration and, if the
motion is unsuccessful, an appeal to the Supreme Court of
the Philippines.
9.3.2 Action on the Merits
Prior to Lepanto’s action on the merits of the case being
heard by the MRTC,WMCI and the TGC filed a joint Motion
to Dismiss, requesting that the MRTC dismiss Lepanto’s
action. On 21 March 2001, the MRTC denied the Motion
to Dismiss. On 2 May 2001, the MRTC likewise denied
WMCI’s motion for reconsideration in respect of the
MRTC’s order of 21 March 2001.
On 6 July 2001,WMCI filed a petition seeking the review of
the MRTC’s order of 21 March 2001 with the Court of
Appeals. On 22 February 2002, the Court of Appeals ruled
in favour of WMCI and directed the dismissal of Lepanto’s
action on the merits. Once final, the Court of Appeal’s
decision would prevent Lepanto from raising the same issues
in a similar action to be initiated before the Philippines
courts in the future.
The decision of the Court of Appeals may be appealed by
Lepanto by way of a motion for reconsideration and, if the
motion is unsuccessful, an appeal to the Supreme Court of
the Philippines.
9.3.3 Costs
To date, the Company has funded and is presently continuing to
fund the legal costs of WMCI and a substantial portion of the
legal costs of the TGC in relation to this dispute with Lepanto.
9.4 FTAA Legal Proceedings
The validity of FTAAs is currently the subject of a legal
challenge by the La Bugal-B’Laan Tribal Association and
others (BTA).The action brought by the plaintiffs against the
Philippines Government and WMCP, challenges the validity of
provisions of the Philippine Mining Act (Republic Act 7942)
relating to FTAAs as implemented through the Act’s
Implementing Rules and Regulations (DAO No. 96-40, Series
of 1996) on the basis that the Constitution of the Republic
of the Philippines prohibits foreign participation in large scale
exploration, development and utilisation of the Philippine’s
mineral resources.The case also specifically challenges the
validity of the Columbio FTAA entered into under authority
of Executive Order 279, series of 1987 on the basis that it
is being implemented without an Environmental Compliance
Certificate and was approved under an unconstitutional
legal regime.
The case is currently before the Supreme Court and a
decision could be handed down at any time.
9.Tampakan Project
As this is the first case of its kind in the Philippines it is
difficult to predict what remedy the Court will provide, or
how the Philippines Government will react, if the case is
decided in favour of the plaintiffs. If the plaintiffs are
successful and the Columbio FTAA is declared invalid,
WMCP will be deprived of its rights under the Columbio
FTAA. However, if the FTAA is declared invalid, there is a
possibility that the Philippines Government could allow
WMCP to convert to a different form of title. Alternatively,
the Philippines Government could allow the reinstatement
of the MPSAs previously held by the TGC, which were
incorporated into the Columbio FTAA. In either case, under
prevailing DENR Administrative Orders the TGC would
still have priority rights over the areas covered by their
original MPSAs.
9.5 Summary of Material Contracts
relating to Proposed Tampakan
Acquisition
This section summarises the material provisions of the
material contracts relating to the Proposed Tampakan
Acquisition.These summaries do not purport to be complete
and are qualified in their entirety by reference to the text of
the contracts themselves.The diagram on Page 108 shows
the main contractual arrangements currently in place in
respect of the Proposed Tampakan Acquisition:
9.5.1 Sale and Purchase Agreement
On 6 October 2000, the TGC entered into an agreement
with WMCI (the First Sale and Purchase Agreement), under
which the TGC agreed to purchase all the issued shares in
WMCP (WMCP Shares) and all the issued shares in Hillcrest
(Hillcrest Shares).WMCP is the holder of the Columbio
FTAA and Hillcrest has lodged an FTAA application with the
Philippines Government relating to areas surrounding the
Columbio FTAA.
On 9 January 2001, the First Sale and Purchase Agreement
expired. On 10 January 2001, the TGC entered into a new
sale and purchase agreement with WMCI (the Second Sale
and Purchase Agreement), under which one of the TGCs,
Sagittarius Mines Inc., agreed to purchase the WMCP Shares
and the Hillcrest Shares. Subject to the continuation of
certain obligations under the First Sale and Purchase
Agreement discussed below, the terms of the Second Sale
and Purchase Agreement replaced the terms of the First Sale
and Purchase Agreement.The Second Sale and Purchase
Agreement was amended by an Amending Agreement dated
7 March 2002 and various letter agreements.
While not a party to either agreement, the Company is
required, under the Acquisition Support Agreement with
the TGC (refer Section 9.5.2), to assist the TGC in fulfilling
certain obligations of the TGC under each sale and
purchase agreement.
109
Indophil Section 09 14/3/02 6:05 PM Page 110

9 Ta m p a k a n P r o j e c t c o n t ’d

Figure 9.4 Contractual arrangements for the Proposed Tampakan Acquisition

WMC Resources
International Pty Ltd
(WMCI)

100% 100%
Second Sale and Original
Purchase Agreement WMC Philippines Inc Hillcrest Inc. (Hillcrest)
Claimholder (WMCP)
10 January 2001 Agreement

Deed of
Colombio
Absolute Sale
FTAA
23 January 2001
FTAA
Application
Philippines
Tampakan Group of Companies (TGC)
Government

Memorandum Acquisition Exploration

of Agreement Support Agreement Management Agreement
8 September 2000 28 September 2000 28 September 2000

Indophil Resources NL Agreement Alsons Corporation

(Company) 16 December 2001 (Alsons)

MOU
Joint Venture 28 September 2000 Technical Services
Terms Sheet (as amended) Terms Sheet
Contracts

Mineral Tenement Applications

MIM Entities

The main provisions of the Second Sale and Purchase
Agreement (as amended) are as follows:
The TGC must pay WMCI US$10,000,000 (payable in two
equal instalments 12 months and 24 months after
production commences from the Tampakan Project) as
consideration for the purchase of the WMCP Shares and
the Hillcrest Shares.
Completion of the sale of each of the WMCP Shares and
the Hillcrest Shares to the TGC (Tampakan Completion)
is subject to the TGC having obtained all necessary
approvals required for the relevant sale.
The TGC are responsible for funding:
(a) all obligations and liabilities incurred by WMCI or
WMCP that relate to the Tampakan Project
(Tampakan Project Expenses) from 31 May 2000
until the earlier of Tampakan Completion or, if the
agreement is terminated, the date WMCP
withdraws from the Tampakan Project or WMCI
enters into an agreement with a third party for the
transfer of its interest in WMCP, the FTAA and/or
the Tampakan Project; and
(b) all liabilities and obligations of WMCP and
Hillcrest which are incurred on or become due
after 31 May 2000.
110
The expenses which the TGC are liable to fund include any
costs incurred by WMCI,WMCP or Hillcrest in relation to
legal proceedings by third parties, in relation to the
agreement or sale of the shares in WMCP or Hillcrest,
including any liability incurred as a result of any adverse
final judgement.
The TGC are solely responsible and must indemnify
WMCI for any liabilities or obligations incurred in respect
of environmental claims relating to the Tampakan Project
and in abandoning, reclaiming and restoring any facilities
acquired pursuant to the agreement.
The TGC have provided a US$500,000 bank undertaking
(First Bank Undertaking) and a US$500,000 letter of credit
to WMCI under the First Sale and Purchase Agreement to
secure payment of Tampakan Project Expenses from 31
May 2000 to 31 May 2001. Under the ASA (see Section
9.5.2), the Company is required to fund and has funded the
letter of credit and the First Bank Undertaking.The TGC
are required to provide a further four bank undertakings
of US$250,000 each (Further Bank Undertakings) to
secure payment of further Tampakan Project Expenses
from 1 June 2001 to 31 January 2003, unless all required
DENR and MGB approvals have been obtained by the date
for payment of each undertaking.The dates for payment of
each of these Further Bank Undertakings are 30 July 2001,
17 March 2002, 1 June 2002 and 1 October 2002
respectively.The first two of these have been paid by the
TGC, funded by loans from the Company.
Indophil Section 09 14/3/02 6:05 PM Page 111
WMCI provides warranties in respect of ownership of the
WMCP Shares and the Hillcrest Shares.
The agreement terminates if the TGC do not meet the
Tampakan Project Expenses, do not provide the Further
Bank Undertakings when required or fail to obtain all
required approvals by 31 October 2002.
9.5.2 Acquisition Support Agreement
On 28 September 2000, the Company and TGC entered into
an Acquisition Support Agreement (ASA), which sets out the
Company’s support for the acquisition by the TGC of the
WMCP Shares and the Hillcrest Shares and the arrangements
for the future exploration of the Tampakan Project.The ASA
reflects the terms of a Memorandum of Agreement entered
into between the parties on 8 September 2000 (MOA)
which, among other things, requires the TGC to deal
exclusively with the Company in relation to the WMCP
Shares, the Tampakan Project and certain related matters.
The main provisions of the ASA (as amended by various
letter agreements) are:
Following their acquisition by the TGC, the WMCP Shares
and the Hillcrest Shares must be placed in escrow until
Holdco Completion.The TGC must procure the election
of nominees of the Company and the TGC to the board
of directors of WMCP and Hillcrest.
The WMCP Shares and the Hillcrest Shares will ultimately
be held by a holding company (Holdco), incorporated in
the Philippines and owned 40% by the Company and 60%
by the TGC. However, the Company will hold an effective
100% Operating Interest in accordance with the
Shareholders Agreement (see Section 9.5.4).
The TGC must enter into an Exploration Management
Agreement with the Company (see Section 9.5.3).
From Tampakan Completion, the Company will be
responsible for determining, funding and carrying out
work programs for the Tampakan Project.
The Company must provide to WMC, on behalf of the
TGC, the First Bank Undertaking and letter of credit
required under the First Sale and Purchase Agreement
(see Section 9.5.1).These amounts must be refunded by
the TGC unless Tampakan Completion does not occur
and the TGC do not reach an agreement with a third
party in relation to the Tampakan Project.
The Company must loan the TGC the amount necessary
for the TGC to subscribe for its shares in Holdco.The
TGC must grant the Company a pledge of their shares in
Holdco to secure the loan.
9.Tampakan Project
In order to reimburse the TGC for costs incurred in
relation to the Proposed Tampakan Acquisition, the
Company must, following the transfer of the WMCP
Shares and the Hillcrest Shares and the finalisation of
associated requirements (Holdco Completion):
(a) issue to the TGC 6,629,630 shares and 4,629,630
attaching options, exercisable at $0.20 per option
at any time within 3 years of their initial issue; and
(b) pay the TGC a further US$500,000.
At Holdco Completion, all loans given by the Company
to the TGC under the sale and purchase agreements
must be assigned to Holdco and Holdco must assume
the TGC’s obligations and liabilities under the sale and
purchase agreements.
The Company may terminate the ASA at any time prior
to Holdco Completion or if an appropriate Holdco
structure cannot be found.
The Company may suspend the operation of the ASA if
any legal action is commenced in respect of the WMCP
Shares, the Hillcrest Shares, the Tampakan Project or
certain related matters.To date the Company has taken
no action in this regard.
To date the Company has funded and is presently
continuing to fund the legal costs of WMCI and a substantial
portion of the legal costs of the TGC in relation to the legal
dispute with Lepanto (see Section 9.3).
9.5.3 Exploration Management Agreement
The Company and the TGC have entered into an Exploration
Management Agreement dated 28 September 2000 under
which the TGC have agreed to appoint the Company as their
technical adviser in relation to the Tampakan Project.This
agreement remains in force until Holdco Completion, at
which time a new Exploration Management Agreement will
be executed between the Company and Holdco.
9.5.4 Shareholders Agreement
The Company and the TGC have entered into a
Shareholders Agreement dated 28 September 2000 which
regulates the parties’ rights and obligations as shareholders
in Holdco and sets out the arrangements for the further
exploration and development of the Columbio FTAA.
The agreement contains standard shareholders agreement
provisions that regulate the parties’ rights and obligations in
respect of WMCP, Hillcrest and Holdco .The agreement also
contains the following provisions:
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9 Ta m p a k a n P r o j e c t
Holdco will be owned 40% by the Company and 60% by
the TGC. However, the Company will have an effective
100% Operating Interest in Holdco, (subject to payment
of a fixed royalty to the TGC).
WMCP Shares or Holdco Shares may not be assigned
or transferred, except as security to secure financing of
the development of a mining operation under the
Columbio FTAA.
Pre-emptive rights apply in respect of:
a disposal of Holdco Shares, other than to a
wholly-owned subsidiary of the transferor or a
disposal by the Company of its Holdco Shares to a
major mining company; or
a change in control of a shareholder (other than a
change in control of the Company due to a capital
raising, a change in control of a company listed on a
recognised stock exchange, or a transfer or issue
of shares in the TGC to an existing shareholder).
The other shareholder’s approval is required if a
shareholder wishes to grant an encumbrance over any
Holdco Shares.
The specified events of default are standard for an
agreement of this nature and include material breaches,
changes in control and a disposal of Holdco Shares in
breach of the agreement. Where the default cannot be
remedied, the non-defaulting party has an option to
purchase the defaulting party’s Holdco Shares at a price to
be determined by an independent expert.
The Company has an option to purchase any royalty
payable by WMCP to the TGC that is offered for sale by
the TGC.
9.5.5 MIM Memorandum of Understanding
The Company has entered into a memorandum of
understanding with MIM Holdings Limited (MIM) dated
28 September 2000 (and amended on 20 August 2001 and
5 March 2002) (MIM MOU), in relation to MIM’s involvement
in the Tampakan Project, pending negotiation and execution of
formal agreements reflecting the terms of the MIM MOU
(Formal Agreements).
To address matters arising from the Alsons Agreement (see
Section 9.5.6), the Company and MIM entered into a Deed of
Confirmation dated 18 December 2001 and an Amendment
to Deed of Confirmation dated 5 March 2002.
112
c o n t ’d
(1) Conditions
Other than the Initial Subscription (discussed below), the
MIM MOU is subject to conditions including the parties
agreeing on a draft three year work program (Agreed Work
Program) and first year budget for the Tampakan Project, and
MIM being satisfied with the terms and conditions of the
Proposed Tampakan Acquisition and the proposed
arrangements for the Tampakan Project (the Conditions).The
Conditions must be met within 90 days after the date of
Tampakan Completion (the Satisfaction Date).
(2) Capital raisings
The Company commits to raising interim capital, of which a
minimum of $1 million (Interim Capital) will be available for
use in the Tampakan Project. This Offer, together with
existing capital, constitutes the Interim Capital raising.
In addition, the Company will use its best endeavours to
raise additional capital such that a total of $9 million (Total
Capital) will be allocated for use in the Tampakan Project.
(3) Subscriptions
As required under the MIM MOU, MIM has subscribed for
2.5 million shares at $0.20 per share plus 2.5 million free
attaching options, exercisable at $0.20 at the option of MIM,
no later than three years after the initial issue. MIM also
commits to the following subscriptions:
(a) subject to the Conditions, upon the Company
raising the Interim Capital and such Interim Capital
being available to use in the Tampakan Project,
paying $500,000 for the issue of 2 million shares
(ie at the Offer Price) no later than the Satisfaction
Date; and
(b) upon the Company raising the Total Capital or
providing evidence that it has sufficient funds to
complete the Agreed Work Program, paying
$1 million for the issue of additional shares (at the
public offer price if applicable or at $0.35 per share
where the capital is raised by alternate means).
If the Company seeks to raise any additional capital after the
Interim Capital raising, MIM may (subject to approval by
Shareholders of the Company which the Company agrees to
seek at the first AGM following completion of the Interim
Capital raising), subscribe for additional shares (at the
applicable subscription price), to the extent necessary to
maintain its percentage level of shareholding in the Company
and may elect to underwrite up to 25% of the additional
capital raising.
Indophil Section 09 14/3/02 6:05 PM Page 113
(4) Use of funds
As required under the MIM MOU, the Company has devoted
to the Tampakan Project 100% of the initial subscription
money (totalling $1.5 million) received from MIM, Lion
Selection Group and the Alcantara Group and at least 60% of
the funds available to the Company prior to the execution of
the MIM MOU.This has been done.The Company must also
devote to the Tampakan Project:
(a) a minimum of $1 million of the funds raised by the
Interim Capital raising; and
(b) additional capital raised such that a total of
$9 million is allocated for use in the Tampakan
Project.
(5) MIM Option and Alternate Option
The Company grants MIM an option (the MIM Option) to
acquire 62.5% of:
(a) the shares and associated rights which the
Company or a subsidiary holds in Holdco;
(b) rights in respect of a royalty payable to the TGC by
WMCP; and
(c) certain plant and equipment acquired by the
Company from WMCP.
If the Alcantara Option is exercised (see Section 9.5.6), the
interest which may be acquired on exercise of the MIM
Option reduces to 60%.
MIM may exercise this option, at its discretion, at any time
prior to the 5th anniversary of the Satisfaction Date and may
terminate this option at any time after the Satisfaction Date.
If it exercises the MIM Option, MIM must pay the Company
an amount escalating in a linear manner each year of
between approximately $11.54 million (if exercised in the
first year) and approximately $23.92 million (if exercised in
the fifth year) plus a proportionate share of Tampakan
Project expenditure to that point in time (Option Fee)
(Figures assume acquisition of the maximum interest of
62.5%). The Option Fee is reduced if the Company fails to
undertake any part of the Agreed Work Program.
MIM has an alternative option to offer to acquire 62.5% (or
60%, if the Alcantara Option is exercised) of the shares held
by the Company or its subsidiary in Holdco and the rights
attaching to them for a price less than the Option Fee,
elected by MIM at its discretion (Alternate Option). If MIM
exercises this Alternate Option, the Company must accept
the offer or elect to buy out MIM’s rights under the MIM
Option for an amount equal to 10% of the price nominated
by MIM.
9.Tampakan Project
(6) Board approval and representation
MIM is entitled to one representative on the Board of the
Company (see Section 5.2) and certain key decisions relating
to the Tampakan Project will require MIM’s consent. Upon
exercise of the MIM Option or the Alternate Option, MIM
must be granted majority Board representation in Holdco.
(7) Work Program
The Company must commence the Agreed Work Program
by the Satisfaction Date.
(8) Disposals
MIM must not dispose of its shares and unexercised options
without the Company’s consent or until the MIM Option has
been exercised, lapses or terminates.
(9) Termination
At any time prior to the Satisfaction Date, MIM may
terminate the MIM MOU or the Formal Agreements where:
(a) the Conditions are not met, the Formal
Agreements have not been entered into or Interim
Capital has not been raised by the Satisfaction
Date; or
(b) MIM is not satisfied with the progress of the
Interim Capital raising, the Conditions or other
matters relating to the Proposed Tampakan
Acquisition and the Tampakan Project.
At any time after the Satisfaction Date, MIM may terminate
the MIM MOU or Formal Agreements.
The Company may terminate the MIM MOU or Formal
Agreements at any time, if the Board believes that the
fulfilment of any obligations under the MIM MOU or any
Formal Agreement would have a material adverse effect on
the financial position of the Company. If the Company elects
to terminate in these circumstances, it must offer to novate
its interest in the agreements discussed in Sections 9.5.1 -
9.5.4 to MIM, at no cost.
9.5.6 Alsons Agreement
On 16 December 2001, the Company and the TGC entered
into an agreement with Alsons Corporation (Alsons), a
member of the Alcantara Group.The main terms of the
agreement are:
the Company will transfer to Alsons 5% of the shares
in Holdco held by the Company following Holdco
Completion, in consideration for Alsons assisting the
Company in relation to the Proposed Tampakan
Acquisition;
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9 Ta m p a k a n P r o j e c t c o n t ’d
Alsons will be entitled to one representative on the board
of Holdco (subject to the rights of MIM under the MIM
MOU); and
subject to Alsons achieving certain performance
indicators prior to 31 March 2002, Alsons has an option
to purchase an additional 5% of the shares in Holdco
(Alsons Option). On exercise of the Alsons Option, Alsons
must pay the Company a fee proportionate to the fee
payable by MIM for the exercise of the MIM Option.The
Alsons Option may be exercised at any time during the
period for exercise of the MIM Option (see Section 9.5.5).
However, if MIM exercises the MIM Option, the Alsons
Option will lapse if not exercised within 5 days.
9.6 Specific risks associated with the
Proposed Tampakan Acquisition
There are a number of risks associated with the Proposed
Tampakan Acquisition. Some of these risks are:
(a) under the ASA described in Section 9.5.2, the
Company is required to bear considerable financial
risks relating to the Proposed Tampakan Acquisition.
The Company is required amongst other things to:
(1) provide to WMC the First Bank
Undertaking and a letter of credit
totalling US$1 million.This has been
provided; and
(2) loan the TGC the amount necessary for
the TGC to subscribe for shares in
Holdco.
(b) the Company has funded and is presently
continuing to fund the legal costs of WMCI and a
substantial portion of the legal costs of the TGC
for the Tampakan Legal Proceedings;
(c) the Company has also loaned the TGC an
additional US$500,000 to fund the Further Bank
Undertakings paid to date.
(d) the Proposed Tampakan Acquisition may not
proceed due to a decision adverse to the Company
in the Tampakan Legal Proceedings (including in any
subsequent appeal) and the Company suffering
adverse consequences (such as Tampakan
Completion being unwound, having to pay the legal
costs of the other parties and being unable to
recover the bonds, loans and undertakings totalling
at least US$1.5 million provided to date in respect
of the Proposed Tampakan Acquisition);
(e) while the TGC have conducted due diligence in
respect of the Tampakan Project, and the
Company’s management is familiar with the
Tampakan Project, the Company has undertaken
114
limited legal, financial or technical due diligence of
WMCP, Hillcrest, the Tampakan Project or the
TGC, due to confidentiality restrictions;
(f) the Company cannot guarantee that the Tampakan
Project will prove to be economically viable;
(g) the outcome of the FTAA Legal Proceedings or the
Tampakan Legal Proceedings may have an adverse
effect on the Company’s ability to successfully
progress the Tampakan Project;
(h) there may be an adverse effect on the market price
of the Shares if the Proposed Tampakan Acquisition
does not complete and, even if it does complete, if
the Tampakan Legal Proceedings are decided against
the TGC;
(i) under the MIM MOU, MIM acquires rights including:
(1) the right to nominate a representative
to be appointed as a Director of the
Company;
(2) in the event of future capital raisings, the
right to subscribe for additional shares in
order to maintain its then percentage
shareholding in the Company and to
underwrite 25% of the capital raising; and
(3) an option to acquire a maximum of
62.5% of the Company’s interest in the
Tampakan Project.
In addition, certain key decisions relating to the
Tampakan Project require the consent of MIM;
(j) as stated in Section 9.5.5, MIM’s investment in the
Tampakan Project may not proceed (or may
proceed to a lesser extent) due to factors including
the following:
(1) MIM’s obligations under the MIM MOU
are subject to the satisfaction of a
number of conditions, many of which
require MIM to satisfy itself, at its
discretion, about certain issues relating to
the Proposed Tampakan Acquisition;
(2) MIM’s obligations to subscribe for shares
under the MIM MOU are, in some
instances, subject to the Company having
satisfied certain capital raising targets; and
(3) MIM has the right to terminate the MIM
MOU and/or the Formal Agreements.
(k) if MIM exercises its option under the MIM MOU to
acquire a maximum of 62.5% of the Company’s
interest in the Tampakan Project:
Indophil Section 09 14/3/02 6:06 PM Page 115

9.Tampakan Project
(1) the Company’s interest in the Tampakan (3) MIM must be granted majority board
Project will be significantly reduced; representation in Holdco.

(2) the fee received by the Company on
exercise of the MIM Option may be
significantly reduced if the Company has
failed to meet certain capital raising and
work program targets; and
(l) if the Company elects to terminate the MIM MOU
and/or the Formal Agreements it must offer to
novate its interest in the Tampakan Project to MIM,
at no cost.

Celebrating agreement with the Tampakan Group of Companies.

From left Roger Flores, Mario Jalandoni, Jerry Palermo,Tony Robbins, Chris Middleton and George Moreno

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10 Financial Information

This section contains the Company’s Consolidated audited and reviewed historical and proforma financial information.

Consolidated Statement of Financial Position and Proforma Consolidated Statement of Financial Position
Proforma
as at As at As at As at
31 Jan 2002 31 Jan 2002 31 Jul 2001 31 Jul 2000
$ $ $ $
Note (refer note 30)
Current Assets
Cash Assets 18 5,204,196 412,321 780,530 1,262,000
Receivables 5 12,109 833,984 12,953 11,737
Other 6 24,480 30,399 30,993 21,867

Total Current Assets 5,240,785 1,276,704 824,476 1,295,604

Non-Current Assets
Property, plant and equipment 7 15,429 15,429 22,976 61,903
Capitalised exploration costs 8 3,055,193 3,055,193 2,986,519 4,102,913
Other financial assets 9 - - - -
Other 10 - - - -

Total Non-Current Assets 3,070,622 3,070,622 3,009,495 4,164,816

Total Assets 8,311,407 4,347,326 3,833,971 5,460,420

Current Liabilities
Payables 11 136,812 136,812 405,856 258,962
Provisions 12 26,460 26,460 33,827 37,790
Other 13 - 993,375 - -

Total Current Liabilities 163,272 1,156,647 439,683 296,752

Non-Current Liabilities
Interest bearing liability 14 - - 600,000 -

Total Non-Current Liabilities - - 600,000 -

Total Liabilities 163,272 1,156,647 1,039,683 296,752

Net Assets 8,148,135 3,190,679 2,794,288 5,163,668

Equity
Contributed equity 15 17,890,314 12,432,858 11,436,983 7,216,983
Accumulated losses 16 (9,742,179) (9,242,179) (8,642,695) (2,053,315)

Total Equity 17 8,148,135 3,190,679 2,794,288 5,163,668

The accompanying notes form an integral part of this Statement of Financial Position

116
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10. Financial Information

Historical Consolidated Abridged Statement of Financial Performance
Half
Year ended Year ended Year ended
31 Jan 2002 31 Jul 2001 31 Jul 2000
Note $ $ $
Other revenues 2 13,252 104,485 92,189
Occupancy expenses (29,439) (62,576) (61,486)
Administration expenses (93,251) (386,070) (150,595)
Borrowing costs 2 (13,286) (29,750) -
Net charge to provision for non-recoverable loans 2 (162,375) (2,206,846) -
Tampakan acquisition costs written off 2 (111,105) (1,285,841) -
Exploration expenditure written off 2 (59,577) (1,626,188) (599,137)
Other expenses 2 (143,703) (1,096,594) -
Loss from ordinary activities before income tax expense (599,484) (6,589,380) (719,029)
Income tax expense relating to ordinary activities 3 - - -
Loss from ordinary activities after income tax expense (599,484) (6,589,380) (719,029)

Net Loss (599,484) (6,589,380) (719,029)

Total changes in equity other than those resulting from

transactions with owners as owners (599,484) (6,589,380) (719,029)

The accompanying notes form an integral part of this Statement of Financial Performance

Consolidated Statement of Cash Flows

Half
Year ended Year ended Year ended
31 Jan 2002 31 Jul 2001 31 Jul 2000
Note $ $ $
Cash Flows from Operating Activities
Payments to suppliers and employees (126,256) (580,377) (149,258)
Interest received 9,524 73,218 56,368
Interest paid (13,286) (29,750) -

Net operating cash flows 18 (130,018) (536,909) (92,890)

Cash Flows from Investing Activities

Payments for property, plant and equipment - (16,403) (639)
Payments for exploration and evaluation (122,557) (509,794) (1,683,107)
Payments for Tampakan acquisition costs (193,847) (1,148,344) -
Payments for shares in related entities - (256,000) -
Loans made (refer to note 10) (162,375) (2,794,346) -
Loan repayments received (refer to note 10) - 587,500 -

Net investing cash flows (478,779) (4,137,387) (1,683,746)

Cash Flows from Financing Activities

Proceeds from issue of shares 395,875 4,220,000 2,250,000
Proceeds from share options not yet allotted 171,500 - -
Proceeds from borrowings - 600,000 -
Payments for Initial Public Offering (330,515) (659,093) -

Net financing cash flows 236,860 4,160,907 2,250,000

Net increase (decrease) in cash held (371,937) (513,389) 473,364

Cash at the beginning of the financial period 780,530 1,262,000 788,636

Exchange rate variations on foreign cash balances 3,728 31,919 -

Cash at the end of the financial period 18 412,321 780,530 1,262,000

The accompanying notes form an integral part of this Statement of Cash Flows
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10 Financial Information
Note 1. Statement of Significant
Accounting Policies
Basis of Accounting
The financial statements have been prepared as a general
purpose financial report in accordance with the
requirements of the Corporations Act, Australian Accounting
Standards, other authoritative pronouncements of the
Australian Accounting Standards Board and Urgent Issues
Group Consensus views. The accounting policies used are
consistent with those adopted in the previous financial year.
The financial statements have also been prepared in
accordance with the historical cost convention and do not
take account of changes in either the general purchasing
power of the dollar or in the prices of specific assets.
The accounts have been prepared on a going concern basis,
which contemplates the continuity of normal business
activity, and the realisation of assets and settlement of
liabilities in the ordinary course of business. The ability of
the Company to continue to operate as a going concern is
dependent upon the following developments:-
(i) the ongoing financial support of Lion Selection Group
Limited (Ultimate controlling entity);
(ii) the raising of additional finance to fund future
operations through an Initial Public Offering, or by other
means.
Having regard to these factors, the Directors are of the
opinion that the basis upon which the accounts are
presented is appropriate in the circumstances. In adopting
this basis, the Directors have regard to the fact that other
companies in the group have given an undertaking of
continued financial support to the Company.
Principles of Consolidation
The consolidated financial statements include the financial
statements of the parent entity, Indophil Resources NL, and
its controlled entities, referred to collectively throughout
these financial statements as the “Consolidated entity”.
All inter-entity balances and transactions have been
eliminated. Where an entity either began or ceased to be
controlled during the year, the results are included only from
the date control commenced or up to the date control
ceased.
Financial statements of foreign controlled entities presented
in accordance with overseas accounting principles are, for
consolidation purposes, adjusted to comply with group policy
and generally accepted accounting principles in Australia.
Foreign Currency Transactions
Foreign currency items are translated to Australian currency
on the following basis:
118
c o n t ’d
transactions are converted at exchange rates
approximating those in effect at the date of each
transaction;
amounts payable and receivable are translated at the
average of the buy and sell rates available on the close of
business at balance date and;
the financial statements of all foreign operations are
translated using the temporal method as they are
considered inter-dependent.
Exchange differences relating to monetary items are included
in the Statement of Financial Performance, as exchange gains
or losses, in the period when the exchange rates change.
Exploration Expenditure
Exploration expenditure incurred is charged against earnings
as incurred, except in the case of areas of interest where
title is granted and:
it is expected that the expenditure will be recouped by
future exploitation or sale; or
at balance date, exploration activities have not reached a
stage which permits a reasonable assessment of the
existence of economically recoverable reserves, and
active and significant operations are continuing.
In these cases the expenditure is capitalised. Ultimate
recoupment of these costs is dependent on the successful
development and commercial exploitation, or sale, of the
respective areas of interest.
Property, Plant and Equipment
Property, plant and equipment is depreciated over the useful
economic lives as follows:
Item Life Method
Leasehold improvements 3 years Straight line
Owned plant and equipment 2-5 years Straight line
Income Tax
Tax effect accounting has been adopted by the Consolidated
entity. Future income tax benefits are available to the
Consolidated entity in respect of tax losses. However, as
there is no certainty that entities in the Consolidated entity
will derive sufficient future assessable income to realise these
benefits, no amount has been benefited in the financial
statements in respect thereof.
Recoverable Amounts of Non-current Assets
All non-current assets other than capitalised exploration
expenditure are reviewed at least semi-annually to determine
whether their carrying amounts require writing down to
recoverable amount. Recoverable amount is determined
using net cash flows not discounted to present values.
Indophil Section 10 14/3/02 6:18 PM Page 119
Joint Ventures
An interest in a joint venture is brought to account by
including in the respective financial statement categories:
the Consolidated entity’s share in each of the individual
assets employed in the joint venture;
liabilities incurred by the Consolidated entity in relation
to the joint venture including the Consolidated entity’s
share of any liabilities for which the Consolidated entity
is jointly and/or severally liable; and
the Consolidated entity’s share of expenses of the joint
venture.
Leased Assets
Assets acquired under finance leases are capitalised and
amortised over the life of the relevant lease or, where
ownership is likely to be obtained on expiration of the lease,
over the expected useful life of the asset. Lease payments
are allocated between borrowing costs and reduction in the
lease liability.
Operating lease assets are not capitalised and rental
payments are recorded in the Statement of Financial
Performance in the period in which they are incurred.
Goodwill on Acquisition
On acquisition of a controlled entity, the difference between
the purchase consideration plus incidental expenses and the
fair value of identifiable net assets acquired is initially brought
to account as goodwill or discount on acquisition. Goodwill
is amortised on a straight line basis over the period during
which the benefits are expected to arise. The unamortised
balance of goodwill is reviewed at each balance date and are
recorded in the Statement of Financial Performance to the
extent that applicable future benefits are no longer probable.
Provision for Employee Entitlements
Provision has been made in the financial statements for
benefits accruing to employees in relation to annual leave.
No provision is made for non-vesting sick leave as the
anticipated pattern of future sick leave taken indicates that
accumulated non-vesting leave is not expected to be paid. All
on-costs, including payroll tax, workers’ compensation
premiums and fringe benefits tax are included in the
determination of provisions. Annual leave provisions are
measured at their nominal amounts.
Financial Instruments included in Assets
Bank deposits, bills of exchange, promissory notes, loans,
marketable securities and marketable equity securities are
carried at cost. Purchases and sales of investments are
recognised on the trade date.
10. Financial Information
Other investments are included in investments at the lower
of cost or recoverable amount.
Trade and other debtors are recorded at the amount of
contracted proceeds.
Financial Instruments included in Liabilities
Convertible notes are recorded at cost.
Financial Instruments included in Equity
Ordinary share capital bears no special terms or conditions
affecting income or capital entitlements of the shareholders.
Superannuation Plans
The parent entity contributes to individual prescribed
superannuation funds of employees. Contributions of up to
8% of employee’s salaries are legally enforceable in Australia.
All the funds are fully vested accumulated contribution type
plans.
Comparative Figures
The Consolidated entity has adopted the presentation and
requirements of Accounting Standard AASB1018 (Statement
of Financial Performance), AASB1034 (Financial Report
Presentation and Disclosure) and AASB1040 (Statement of
Financial Position). In accordance with the requirements of
these standards 31 July 2000 comparative amounts have been
reclassified in order to comply with the new presentation
format. The reclassification of comparative amounts has not
resulted in a change to the aggregate amounts of Current
Assets, Non-Current Assets, Current Liabilities, Non-Current
Liabilities, Equity or the Net Profit / Loss of the Consolidated
entity as reported in the prior year’s financial report.
Treatment of Initial Public Offering (IPO) Costs
IPO costs incurred up to the time of deferral in September
2001, have been written off as an expense. Costs incurred
since reactivating the IPO are being capitalised as an asset
and will be offset against the share capital proceeds of the
IPO.
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10 Financial Information c o n t ’d

Note 2. Profit and Loss Items

Half
Year ended Year ended Year ended
31 Jan 2002 31 Jul 2001 31 Jul 2000
$ $ $
Loss from ordinary activities is after crediting the following revenues:

Other revenues:
Interest from unrelated persons 9,524 72,566 57,020
Sundry Income - - 7,895
Net foreign exchange gains 3,728 31,919 27,274
Total other revenues 13,252 104,485 92,189

Total revenues 13,252 104,485 92,189

Loss from ordinary activities is after charging the following expenses:

Depreciation:
Depreciation of:
Plant and equipment - 7,048 6,096
Leasehold improvements 1,853 1,673 3,168

Total depreciation 1,853 8,721 9,264

Borrowing Costs:
Interest paid or payable to:
Related entity 13,286 29,750 -

Other Expense Items:

Net charge to provision for non-recoverable loans (a) 162,375 2,206,846 -
Tampakan acquisition costs written off 111,105 1,285,841 -
Exploration expenditure written off 59,577 1,626,188 599,137
Deferred Initial Public Offering costs written off 143,703 840,594 -
Diminution in value of investments (b) - 256,000 -

476,760 6,215,469 599,137

Significant Items above:

(a) Includes provisions for:
Loan to Sagittarius Mines Inc (nil tax effect) 162,375 2,206,846 -

Net charge to provision for non-recoverable loans 162,375 2,206,846 -

(b) Includes diminution for:

Investment in Sagittarius Mines Inc (nil tax effect) - 256,000 -

Total diminution in value of investments - 256,000 -

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10. Financial Information

Note 3. Income Tax
Half year
ended Year ended Year ended
31 Jan 2002 31 Jul 2001 31 Jul 2000
$ $ $
(a) Income tax expense
The difference between income tax expense provided in the financial statements and the prima facie income tax expense is
reconciled as follows:

Loss from ordinary activities (599,484) (6,589,380) (719,029)

Prima facie tax (benefit) thereon at 30%

(July 2001 at 34%, July 2000 at 36%) (179,845) (2,240,389) (258,850)

Tax effect of permanent and other differences:

Non deductible project acquisition costs 33,332 437,186 -
Non deductible interest 2,857 10,115 -
Non deductible provision for doubtful debts 48,713 750,328 -
Diminution in value of investments - 87,040 -
Deferred Initial Public Offering costs written off - non deductible 43,111 279,492 -
Exploration costs written off - non deductible 17,873 37,734 45,634
Debt defeasance - - 108,000
Effect of lower rate of overseas tax - - 11,322
Future income tax benefit not brought to account 33,959 638,494 93,894

Total income tax attributable to loss from ordinary activities - - -

(b) Benefit of income tax losses not brought to account

As at 31 July 2001, the Consolidated entity has estimated future income tax benefits arising from tax losses and mining
expenditure of $634,402 (2000: $80,495). This benefit has not been brought to account as realisation is not virtually certain. The
benefit will only be obtained if:

(i) the Consolidated entity derives future assessable income of a nature and of an amount sufficient to enable the benefits from
the deductions to be realised;

(ii) the Consolidated entity continues to comply with the conditions for deductibility imposed by the law; and

(iii) no changes in tax legislation adversely affect the Consolidated entity in realising the benefit from the deductions for the
losses.

This estimated future income tax benefit has been reduced to reflect the effect of legislated changes to income tax rates to 30%.

Note 4. Segment Reporting

The Consolidated entity operates in the exploration and mining industry only in the Philippines, and maintains a Head Office in
Australia.

Note 5. Receivables (current)

As at As at As at
31 Jan 2002 31 Jul 2001 31 Jul 2000
$ $ $
Funds receivable for options exercised (a) 821,875 - -
Other receivables 12,109 12,953 11,737

833,984 12,953 11,737

(a) Refer Note 28

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10 Financial Information c o n t ’d

As at As at As at
31 Jan 2002 31 Jul 2001 31 Jul 2000
$ $ $

Note 6. Other Assets (current)

Prepayments 24,480 30,993 21,867
Deferred Initial Public Offering Costs 5,919 - -

30,399 30,993 21,867

Note 7. Property, Plant and Equipment

(a) Leasehold Improvements:
Cost
Opening balance 45,288 45,288 45,288
Additions - - -
Disposals - - -

Closing balance 45,288 45,288 45,288

Accumulated depreciation
Opening balance 41,569 30,971 18,877
Depreciation for the period 1,861 10,598 12,094
Disposals - - -

Closing balance 43,430 41,569 30,971

Net book value 1,858 3,719 14,317

(b) Plant and Equipment:

Cost
Opening balance 236,909 223,195 222,556
Additions - 16,403 639
Disposals - (2,689) -

Closing balance 236,909 236,909 223,195

Accumulated depreciation
Opening balance 217,652 175,609 107,352
Depreciation for the period 5,686 43,779 68,257
Disposals - (1,736) -

Closing balance 223,338 217,652 175,609

Net book value 13,571 19,257 47,586

Total property, plant and equipment 15,429 22,976 61,903

Note 8. Capitalised Exploration Costs

Opening balance 2,986,519 4,102,913 2,982,675
Expenditure 128,251 509,794 1,719,375
Exploration written off (59,577) (1,626,188) (599,137)

Closing balance 3,055,193 2,986,519 4,102,913

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10. Financial Information

As at As at As at
31 Jan 2002 31 Jul 2001 31 Jul 2000
$ $ $

Note 9. Other Financial Assets (non-current)

Investments
Securities, carried at cost, not quoted on prescribed stock exchanges:
Shares in Sagittarius Mines Inc 256,000 256,000 -
Less diminution in value of investments (256,000) (256,000) -

Total non-current other financial assets - - -

Note 10. Other Assets (non-current)

Loans to other entities
Loans to Sagittarius Mines Inc 2,369,221 2,206,846 -

Less provision for non-recoverability (2,369,221) (2,206,846) -

Total non-current other assets - - -

Note 11. Payables (current)

Trade creditors – unsecured 25,284 153,504 141,036
Sundry creditors and accruals 111,528 252,352 117,926

Total current payables 136,812 405,856 258,962

Note 12. Provisions (current)

Employee entitlements 26,460 33,827 37,790

Note 13. Other Liabilities (current)

Funds from option applications 993,375 - -

Note 14. Interest Bearing Liability (non-current)

Unsecured:
Convertible Notes
- 600,000 of $1each - 600,000 -

A loan from Australian Selection Pty Ltd was taken out on 8 January 2001 for a minimum of three months, repayable on demand
with an interest rate of 8.5% p.a. payable monthly in arrears. On 10th July 2001 the loan was converted into $600,000 unsecured
convertible notes. On 12 November 2001 the Company resolved that the convertible notes be exercisable into equity at $0.10
per share with a free attaching option exercisable at the discretion of the holder at any time prior to 31 January 2002 at $0.10
per option. These terms were similar to the October 2001 offer to shareholders. The convertible notes were exercised on 12
November 2001 and resulted in the allotment of 6,000,000 shares and options to Australian Selection Pty Ltd. 5,000,000 options
were sold to other parties who subsequently exercised these options. Australian Selection Pty Ltd exercised their remaining
1,000,000 options. The shares relating to these options were allotted in February 2002.

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10 Financial Information c o n t ’d

Note 15. Contributed Equity

As at As at As at
31 Jan 2002 31 Jul 2001 31 Jul 2000
$ $ $
Ordinary shares 12,432,858 11,436,983 7,216,983

Movements in contributed equity for the period:

Number of Ordinary Shares
As at As at As at
31 Jan 2002 31 Jul 2001 31 Jul 2000
On issue at start 60,152,005 39,052,005 27,802,005
Issued during the period (a) 9,958,750 21,100,000 11,250,000

On issue at end 70,110,755 60,152,005 39,052,005

(a) Shares issued during the half year ended 31 January 2002 were issued at $0.10 per share. Shares issued during the financial
years ended 31 July 2001 and 31 July 2000 were issued at $0.20 per share.

Options Over Ordinary Shares:

Options
Month of Number Number of Number outstanding at Exercise Exercise Expiration
issue Note issued recipients exercised balance date price period date
Nov 1999 2 1,000,000 1 - 1,000,000 $0.50 Nov 1999 to May 2004 10-May-04
Nov 1999 2 1,000,000 1 - 1,000,000 $0.35 Nov 1999 to May 2002 10-May-02
Sep 2000 7,500,000 3 - 7,500,000 $0.20 Dec 2000 to Oct 2003 1-Oct-03
Oct 2000 7,000,000 9 - 7,000,000 $0.20 Dec 2000 to Oct 2003 1-Oct-03
Nov 2000 1 2,236,500 3 - 2,236,500 $0.35 Nov 2000 to May 2004 10-May-04
Nov 2000 1 2,236,500 3 - 2,236,500 $0.50 Nov 2000 to May 2004 10-May-04
Nov 2000 200,000 1 - 200,000 $0.35 Dec 2000 to May 2004 10-May-04
Nov 2000 200,000 1 - 200,000 $0.50 Dec 2000 to May 2004 10-May-04
Jan 2001 100,000 1 - 100,000 $0.20 Jan 2001 to Oct 2003 1-Oct-03
Jan 2001 3,000,000 1 - 3,000,000 $0.20 Jan 2001 to Oct 2003 1-Oct-03
Oct 2001 3 2,376,250 27 - 2,376,250 $0.10 Oct 2001 to Jan 2002 31-Jan-02
Nov 2001 3 7,582,500 5 - 7,582,500 $0.10 Nov 2001 to Jan 2002 31-Jan-02

34,431,750

(1) Expiration date extended from 11 November 2002

(2) Pursuant to the Manat Joint Venture Agreement on 10 November 1999 the parent issued 2 million options to the joint
venture participant at an exercise price of $0.35 and $0.50 exercisable by 10 May 2002 and 10 May 2004.

(3) Notices of exercise were made for 9,933,750 options. Formal allotment of these shares took place early in February 2002.
$171,500 was received by 31 January 2002. The balance of $821,875 was not received by 31 January 2002 and represents a
current receivable (see note 5).

In the event that the Tampakan acquisition is consummated then 6,629,630 shares and 4,629,630 options (exercisable at $0.20)
will be issued to Sagittarius Mines Inc. at no cost as per the Agreement with Sagittarius Mines Inc.

Following the acquisition of Tampakan, MIM will, subject to the terms and conditions of the Agreement with MIM, subscribe for
shares to the value of $500,000.

Note 16. Accumulated Losses

As at As at As at
31 Jan 2002 31 Jul 2001 31 Jul 2000
$ $ $
Accumulated losses at the beginning of the period (8,642,695) (2,053,315) (1,334,286)
Net loss for the period (599,484) (6,589,380) (719,029)

Accumulated losses at the end of the period (9,242,179) (8,642,695) (2,053,315)

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10. Financial Information

As at As at As at
31 Jan 2002 31 Jul 2001 31 Jul 2000
$ $ $

Note 17. Equity

Total equity at beginning of period 2,794,288 5,163,668 3,632,697
Total changes in equity recognised in the Statement of Financial Performance (599,484) (6,589,380) (719,029)
Transactions with owners as owners:
Contributed equity 995,875 4,220,000 2,250,000

Total equity at the end of the period 3,190,679 2,794,288 5,163,668

Note 18. Notes to the Statement of Cash Flows

(a) Reconciliation of Cash

For the purposes of the Statement of Cash Flows, cash includes cash on hand and in banks and short term deposits at call.

Cash as at the end of the period as shown in the Statement of Cash Flows is reconciled to the related items in the Statement of
Financial Position as follows:

Cash on hand 51,776 192,734 128,361

Call deposits with banks 189,045 587,796 1,133,639
Money held for shares not yet allotted 171,500 - -

412,321 780,530 1,262,000

(b) Reconciliation of Net Loss after Income Tax to Net Cash used in Operating Activities

Net loss after income tax (599,484) (6,589,380) (719,029)

Adjustments for non-cash income and expense items:

Depreciation of property, plant and equipment 1,853 8,721 9,264
Property, plant and equipment written off - 953 -
Exploration costs written off 59,577 1,626,188 599,137
Acquisition costs written off 111,105 1,285,841 -
Deferred Initial Public Offering costs written off 143,703 840,594 -
Net foreign exchange gains (3,728) (31,919) (27,274)
Transfers to provisions:
Employee entitlements (7,367) (3,963) (2,176)
Provision for non-recoverable loans 162,375 2,206,846 -
Diminution in value of investments - 256,000 -

Changes in assets and liabilities:

(Increase)/decrease in assets:
Accounts receivable 844 (1,868) 19,891
Prepayments and other assets 6,513 (8,474) (7,408)
(Decrease)/Increase in liabilities:
Trade Creditors (5,409) (126,448) 34,705

Net cash used in operating activities (130,018) (536,909) (92,890)

Note 19. Employee Entitlements

Number of full-time equivalents employed 15 15 15

Employee Entitlements Recognised

Aggregate employee entitlement liability (refer to note 12) 26,460 33,827 37,790

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10 Financial Information c o n t ’d

Note 20. Foreign Currency Exposure

As at As at As at
31 Jan 2002 31 Jul 2001 31 Jul 2000
$ $ $
Current assets
Amounts receivable in foreign currency which are not effectively hedged:

Philippine pesos 7,639 2,467 5,198

Current liabilities
Amounts payable in foreign currency which are not effectively hedged:

United States dollars - 48,612 -

Philippine pesos 48,798 60,060 182,579

The Australian dollar equivalents of foreign currency monetary items included in the Statement of Financial Position headings to
the extent that they are not effectively hedged, are set out above.

These amounts include the payables and receivables of foreign subsidiaries which are not effectively hedged by other foreign
currency denominated items.

Note 21. Commitments

As at As at As at
31 Jan 2002 31 Jul 2001 31 Jul 2000
$ $ $
(a) Operating lease expenditure contracted for is payable as follows:

Not later than one year 14,350 28,682 26,760

Later than one year but not later than five years - - -
Later than five years - - -

14,350 28,682 26,760

Operating leases are entered into as a means of acquiring access to office facilities. Rental payments are generally fixed, but with
inflation escalation clauses. No renewal or purchase options exist in relation to operating leases and no operating leases contain
restrictions on financing or other leasing activity.

(b) Commitments for exploration expenditure are scheduled as follows:

Not later than one year 900,000 800,000 1,446,000

Later than one year but not later than five years 1,800,000 2,900,000 1,102,000
Later than five years - - -

2,700,000 3,700,000 2,548,000

Due to the uncertain nature of exploration the Consolidated entity believes the provision of any estimated expenditure is unable
to be forecast with any reliability. The Consolidated entity is able to relinquish interest in tenements or exploration permits at any
stage. However, should the Consolidated entity decide to retain its existing interests, the minimum expenditure payable over the
next two years would be $2,700,000 (included in the table above). A major review of tenement commitments was recently
conducted leading to the rescheduling and / or deferral of these commitments.

(c) Equity commitments

The call option referred to in note 23 is exercisable at a price of PHP 100 per share.
This is recorded as a contingent liability at note 22.

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10. Financial Information

Note 22. Contingent Liabilities
As at As at As at
31 Jan 2002 31 Jul 2001 31 Jul 2000
$ $ $
Loans to Sagittarius Mines Inc to cover penalty
payments regarding deferral of maintenance expenses 20,000 - -

Amounts payable to Sagittarius Mines Inc on successful

acquisition of Tampakan tenements (US$500,000) 1,000,000 1,000,000 -

Loan to Sagittarius Mines Inc to cover ongoing

Tampakan maintenance expenses (US$250,000). 500,000 500,000 -

Amount of unpaid capital (75%) in the issued

capital of Sagittarius Mines Inc 768,000 768,000 -

Additional expenditure on Tampakan tenement

subject to finalisation of acquisition. 2,400,000 - -

Staff salaries foregone during cost cutting period,

repayable on successful Initial Public Offering listing 100,000 - -

Note 23. Controlled Entities

The consolidated financial statements at 31 January 2002 include the following controlled entities. The financial years of all
controlled entities are the same as that of the parent entity.
Name of controlled entity Place of % of shares held at
Incorporation 31 Jan 2002 31 Jul 2001 31 Jul 2000
Indophil Resources (Phils) Inc (1) Philippines 40 40 40
Osprey Mineral Exploration Corporation Philippines 64 64 64
Pulong Ilog Mineral Exploration Corporation Philippines 64 64 64
San Leonardo Mineral Exploration Corporation Philippines 64 64 64
San Eduardo Mineral Exploration Corporation Philippines 100 100 100
San Christo Mineral Exploration Corporation Philippines 100 100 100
Omega Mineral Exploration Co Inc Philippines 100 100 100
Xenia Mineral Exploration Co Inc Philippines 100 100 100
Indophil Resources Exploration Services (India) Pte Ltd (2) India 0 0 100
Southern Philippines Exploration Pty Ltd (2) Australia 100 100 100
Luzon Resources Pty Limited (2) Australia 100 100 100
Visayan Resources Pty Limited (2) Australia 100 100 100
Southern Exploration Corporation (2) Philippines 100 100 100

(1) Though 40% owned, Indophil Resources NL has a call option to purchase the 60% equity held by other shareholders. In
consideration for the grant of the call option, the option deed requires Indophil Resources NL to advance loans to the 60%
shareholders to enable those shareholders to meet cash calls for exploration expenditure. Therefore the assets and net loss
have been attributed 100% to the members of Indophil Resources NL.

(2) These companies made no contribution to the consolidated results for the period.

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10 Financial Information c o n t ’d

Note 24. Interests in Joint Venture Operations

Interest held in output
As at As at
31 Jan 2002 31 Jul 2001
Joint venture name Principal Activity % %
Manat (1) Mineral exploration 25 25
Leyte-Sogod (1) Mineral exploration 0 0

(1) Earning up to 50% interest.

As at As at
31 Jan 2002 31 Jul 2001
$ $
Assets employed in joint venture operations:
Capitalised exploration costs 1,665,590 1,547,873

Note 25. Remuneration of officers

(a) Income of Directors

The number of Directors of the parent entity who were paid, or were due to be paid, income (including brokerage, commission,
bonuses, retirement payments, salaries, and payments to a prescribed superannuation fund) directly or indirectly from the
Company or any related party, were:
Year ended Year ended
31 Jul 2001 31 Jul 2000
$10,000 – 19,999 1 1
$40,000 – 49,999 1 -
$130,000 – 139,999 1 1
$140,000 – 149,999 1 1

The aggregate income of the Directors referred to above $331,891 $293,310

The total income paid or payable, directly or indirectly, from the respective entities of which they are Director, or from any
related party, to all the Directors of each entity in the Consolidated entity for the year ended 31 July 2001 was $344,101
(2000: $296,237). This amount includes the value of insurance premiums made for the benefit of Directors.

(b) Income of Executives

The number of executive officers whose total income for the year falls within the following bands, were:

$130,000 – 139,999 1 1
$140,000 – 149,999 1 1

The aggregate income of the executives referred to above $281,289 $283,310

Income of executives comprises amounts paid or payable to executive officers domiciled in Australia, directly or indirectly, by
the Consolidated entity or any related party in connection with the management of the affairs of the entity or Consolidated
entity, whether as executive officers or otherwise. These amounts are paid to Executive Directors included above in Income
of Directors.

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10. Financial Information

Note 26. Remuneration of Auditors
Half year
ended Year ended Year ended
31 Jan 2002 31 Jul 2001 31 Jul 2000
$ $ $
Remuneration received, or due and receivable, by the auditor of the parent entity:

Audit or review of the financial statements - 19,000 13,500

Other services 27,727 184,250 2,500

Remuneration received, or due and receivable, by a related practice of the auditor for:

Audit or review of the financial statements - 20,992 14,052

Other services - 110,659 3,661

Other services include the following:

Taxation services
Due diligence and Investigating Accountant services

Note 27. Related Party Disclosures

(a) Directors
The following persons held the position of Director of Indophil Resources NL during all of the past two and a half financial years,
unless otherwise stated:

R B Davis (chairman) (appointed 23 November 2000)

T W Robbins
C N Middleton
K P Robinson

(b) Directors’ Shareholdings

Year ended Year ended
31 Jul 2001 31 Jul 2000
Shares and share options issued by Indophil Resources NL during the period:

Ordinary shares 100,000 -

Ordinary share options 500,000 -

Shares and share options held at the end of the period:

Ordinary shares 2,466,001 2,366,001

Ordinary share options 4,723,000 4,223,000

(c) Transactions with Related Parties

Loans have been made to Indophil Resources (Phils.) Inc. and other controlled entities, for funding of exploration and working
capital needs.

Lion Selection Group Limited has provided equity funding for the Company’s exploration and working capital needs.

Lion Selection Group Limited has also provided the Consolidated entity with third party, officers liability and contents insurances.
Until 6 March 2001, Lion Selection Group Limited indemnified Directors, secretary and full-time executives of group companies,
against any claim or for any expenses or costs which may arise as a result of work performed in their respective capacities.As from 6
March 2001, Indophil has taken out its own Directors and officers insurance which indemnifies Directors, secretary and full time
executives.

Australian Selection Pty Ltd (a wholly owned subsidiary of Lion Selection Group Limited) has provided a short term loan on
commercial terms which was repaid on 10 July 2001. On the same day the Company issued to Australian Selection Pty Ltd
600,000 unsecured convertible notes with a face value of $1 each. On 12 November 2001 the Company resolved that the
convertible notes be exercisable into equity at $0.10 per share with a free attaching option exercisable at the discretion of the
holder at any time prior to 31 January 2002 at $0.10 per option. These terms were similar to the October 2001 offer to

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10 Financial Information c o n t ’d

shareholders. The convertible notes were exercised on 12 November 2001 and resulted in the allotment of 6,000,000 shares and
options to Australian Selection Pty Ltd. 5,000,000 options were sold to other parties who subsequently exercised these options.
Australian Selection Pty Ltd exercised their entitlement to the remaining 1,000,000 options. The shares relating to these options
were allotted in February 2002.

(d) Ultimate Controlling Entity

The ultimate controlling entity of the Consolidated entity is the Lion Selection Group by virtue of its majority shareholding in the
Company. As at 31 January 2002, the Lion Selection Group held 58.48% (31 July 2001: 58.18%) of the equity of the parent Company.

Note 28. Subsequent Events

1. Options Expiring 31 January 2002

Subsequent to 31 January 2002 the Company received $821,875 from the exercise of options expiring on 31 January 2002. The
Company had received $171,500 prior to 31 January 2002. Formal allotment took place in February 2002.

2. Initial Public Offering (IPO)

On 6 February 2002 the Directors resolved to reactivate the Company’s IPO.

Note 29. Financial Instruments

Foreign Exchange

The Consolidated entity has not entered into any forward foreign exchange agreements and foreign currency options.
Remittances to the Philippines have been in Australian dollars on a needs basis.

Most of the Consolidated entity’s expenditure in the foreseeable future will be in Philippine pesos, so the Consolidated entity is
exposed to the Australian dollar – Philippine peso exchange rate.

Net Fair Value of Financial Assets and Liabilities

The Consolidated entity does not have any financial derivative liabilities. The financial liabilities of the Consolidated entity are
carried at the amount at which the liability could be settled. Accordingly the net fair value is the same as the carrying value.

Receivables, other current assets, cash and call deposits are immediately realisable. Accordingly the net fair value is the same as
the carrying amount.

Interest Rate Risk

The only interest rate risk exposure is on cash and call deposits.

Note 30.Transactions Relating to the Proforma Consolidated Statement of Financial Position

The unaudited proforma consolidated statement of financial position should be read in conjunction with the items set out below
and the Statement of Significant Accounting Policies (note 1). The unaudited proforma consolidated statement of financial position
incorporates in Indophil’s statement of financial position, adjustments pursuant to the following transactions and events detailed at
items 1 to 7, had they occurred at 31 January 2002.

Investors should be aware that the unaudited proforma statement of financial position does not take into account either of the
following items:

the potential issue of new shares and options in accordance with existing options, or through agreements entered into by
Indophil, as described in Section 2.3 of the Prospectus;

operating cashflows generated / utilised by Indophil since 31 January 2002.

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10. Financial Information

Proforma Adjustments Balance Sheet Net Increase /
Caption (Decrease)
$
1. Indophil receives remaining funds ($821,875) for options Cash 821,875
exercised at 31 January 2002. Funds receivable for
options exercised (821,875)

2. Indophil allots 9,933,750 shares from options exercised by Funds for options (993,375)
31 January 2002, early in February applications
Paid Up Capital 993,375

3. Indophil issues 20,000,000 Shares for the sales to the public Cash 5,000,000
(outlined in the Prospectus) at $0.25 per Share, raising $5,000,000. Paid Up Capital 5,000,000

4. Indophil incurs and pays the remaining costs of the Offer Capitalised IPO Costs 530,000
Cash (530,000)

5. Indophil offsets the capitalised costs of the Offer against the Paid Up Capital (535,919)
funds raised under the Offer Capitalised IPO Costs (535,919)

6. Indophil makes a loan payment to Sagittarius Mines Inc for bond Cash (500,000)
payment to Western Mining Corporation on 17 March 2002 for Loan to Sagittarius Mines Inc 500,000
ongoing Tampakan project costs under the amended Sale and
Purchase Agreement and charges the payment to accumulated losses.

7. Indophil provides for non-recoverability of loan to Sagittarius Mines Inc Loan to Sagittarius Mines Inc (500,000)
Accumulated losses 500,000

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11 Investigating Accountants’ Repor t

The Directors
Indophil Resources NL
Suite 3,Technology Enterprise Centre
2 Park Drive
BUNDOORA VIC 3083

14 March 2002

Dear Sirs

Indophil Resources NL

Investigating Accountants’ Report

1. Introduction
This report on Indophil Resources NL (“Indophil” or “the Company”), has been prepared at the request of the Directors of
Indophil for inclusion in a Prospectus dated on or about 14 March 2002 relating to the proposed offer of 20,000,000 fully paid
ordinary Shares at $0.25 per Share, with one Option attaching to each Share at nil consideration, and quotation of the Shares and
the attaching Options on the Australian Stock Exchange Limited. The Offer (other than the Options) has been fully underwritten
by ABN AMRO Morgans Corporate Limited. References to words in this report and the Prospectus have the same meaning.

You have requested that Arthur Andersen prepare an Investigating Accountants’ Report, and specifically report:

Whether the historical financial information disclosed in Section 10 of the Prospectus is properly drawn up so as to give a
true and fair view of the results of Indophil, for the years ended 31 July 2001 and 31 July 2000, and the statement of financial
position as at 31 July 2001 and 31 July 2000 are properly drawn up so as to give a true and fair view of Indophil’s state of
affairs, in accordance with applicable Accounting Standards and other mandatory professional reporting requirements.

Whether anything has come to our attention which would cause us to believe that the consolidated statement of financial
performance, statement of cash flows for the six months ended 31 January 2002 and the statement of financial position of
Indophil as at 31 January 2002 as disclosed in Section 10 of the Prospectus are not properly drawn up so as to give a true and
fair view of Indophil’s state of affairs, prepared in accordance with applicable Accounting Standards and other mandatory
professional reporting requirements.

Whether anything has come to our attention which would cause us to believe that the proforma financial information
disclosed in Section 10 of the Prospectus is not properly drawn up in accordance with the basis of preparation and
assumptions set out therein, and with generally accepted practice as applied in Australia for presenting proforma financial
information in a Prospectus.

This report does not form the basis of an independent expert’s opinion with respect to the valuation of the Company or a
valuation of the share issue price of $0.25 per share.

Indophil has prepared, and is responsible for, the historical and proforma financial information included in the Prospectus and
referred to in this report.

2. Background
Indophil was incorporated in Victoria on 10 December 1996, and since incorporation, has operated as a gold and copper
exploration company. Exploration activities have been undertaken predominantly in the Philippines area, with other minor
exploration activity in India which ceased in 2000. The Company has been controlled by Lion Selection Group Limited since
12 November 1997.

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11. Investigating Accountants’ Report

3. Scope of Work Performed

3.1 Scope
Arthur Andersen has been requested to prepare an Investigating Accountants’ Report dealing with the following financial
information:

the historical consolidated financial performance, comprising the historical statement of financial performance and statements
of cashflows of Indophil for the half year ended 31 January 2002 and the years ended 31 July 2001 and 31 July 2000, and the
historical consolidated statements of financial position of Indophil as at 31 January 2002, 31 July 2001 and 31 July 2000 as set
out in Section 10 of the Prospectus;

the proforma unaudited consolidated statement of financial position of Indophil as at 31 January 2002 as set out in Section 10
of the Prospectus.

The historical financial performance for the half year ended 31 January 2002 and the years ended 31 July 2001 and 31 July 2000
and the historical statements of financial position as at 31 January 2002, 31 July 2001 and 31 July 2000 (together referred to as the
historical financial information) and the unaudited proforma statement of financial position as at 31 January 2002 have been based
on the accounting policies detailed in Note 1 to the historical financial information in Section 10 of the Prospectus.

3.2 Historical Financial Information

The historical financial information has been extracted from the audited financial statements for the years ended 31 July 2001,
31 July 2000 and the reviewed financial statements for the half year ended 31 January 2002.

The financial statements for the years ended 31 July 2001 and 31 July 2000 were audited by Arthur Andersen in accordance with
Australian auditing standards to provide reasonable assurance as to whether the financial statements are free of material
misstatement. Audit procedures included examination, on a test basis, of evidence supporting the amounts and disclosures in the
financial reports and the evaluation of accounting policies used and significant estimates made by management. These procedures
were undertaken to form an opinion whether, in all material respects, the financial reports were presented fairly in accordance
with Australian accounting standards and other mandatory professional reporting requirements (Urgent Issues Group Consensus
Views) and statutory requirements so as to present a view which was consistent with our understanding of Indophil’s
consolidated financial position and performance as represented by the results of its operations and its cash flows.

The financial statements for the half year ended 31 January 2002 were reviewed by Arthur Andersen in accordance with Australian
auditing standards applicable to review engagements, in order to report whether anything had come to our attention that would
indicate that the financial statements were not presented fairly in accordance with Accounting Standards AASB1029, “Interim
Financial Reporting”, and other mandatory professional reporting requirements and statutory requirements in Australia. Review
procedures are limited primarily to inquiries of the Company’s personnel and analytical procedures applied to the financial data.

In preparing the financial information, the Directors have considered the need for the previously audited and reviewed financial
reports to be adjusted to disclose changes in accounting policies and the impact of other items, the inclusion of which would
detract from the comparability of the financial information over the periods, and its comparability with the ongoing operations
of Indophil.

3.3 Proforma Consolidated Statement of Financial Position

The consolidated unaudited proforma statement of financial position of Indophil as at 31 January 2002 included at Section 10 of the
Prospectus, adjusted for the financing and investing transactions, as detailed in Note 30 to the unaudited proforma statement of
financial position in Section 10 of the Prospectus, has been presented in accordance with the policies which form part of the
financial information and are detailed in Note 1 to the financial information.

The purpose of the consolidated proforma statement of financial position as at 31 January 2002 is to reflect the assumed
proforma adjustments had they occurred at 31 January 2002. The assumed transactions are outlined in Note 30 to the
proforma statement of financial position.

We have performed a review of the proforma consolidated statement of financial position in order to state whether, on the basis
of the procedures described, anything has come to our attention that would indicate that the financial information is not
presented fairly in accordance with applicable Accounting Standards and other mandatory professional reporting requirements,
(Urgent Issues Group Consensus Views). Our review was limited primarily to inquiries of Company personnel, review of relevant

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11 Investigating Accountants’ Repor t c o n t ’d

working papers, accounting records and other documents, review of contractual arrangements entered into by the Company and
the performance of limited verification procedures. A review of this nature provides less assurance than an audit and accordingly,
this report does not express an audit opinion on the proforma statement of financial position.

3.4 Exclusion of Proposed Tampakan Acquisition

The consolidated proforma statement of financial position of Indophil as at 31 January 2002 does not take account of the
potential significant investing and financing transactions associated with the Proposed Tampakan Acquisition (as outlined in
Section 9 of the Prospectus) to the extent that such transactions have not occurred at the date of preparing this report. Had
account been made for the potential significant investing and financing transactions associated with the Proposed Tampakan
Acquisition, other proforma adjustments may have been made in addition to those detailed in Note 30 to the proforma statement
of financial position. These potential transactions would likely include an additional equity issue, the funds for which would be
used to complete the acquisition of the Tampakan properties and to fund the exploration of those properties.

4. Opinion and Statement on the Historical and Proforma Financial Information

The following opinion and statement are made as a result of the procedures undertaken in preparing this report:

4.1 Historical Financial Information

In our opinion, the 31 July 2001 and 31 July 2000 consolidated statement of financial performance and 31 July 2001 and 31 July
2000 consolidated statement of cash flows of Indophil included in Section 10 of this Prospectus, are properly drawn up so as to
give a true and fair view of the results of Indophil for the years ended 31 July 2001 and 31 July 2000, and the statement of financial
position as at 31 July 2001 and 31 July 2000, are properly drawn up so as to give a true and fair view of Indophil’s state of affairs,
prepared in accordance with applicable Accounting Standards and other mandatory professional reporting requirements (Urgent
Issues Group Consensus Views).

Without qualification to the opinion expressed in the independent audit report for the year ended 31 July 2001, attention is
drawn to the following matters:

In accordance with the economic entity’s accounting policy as described in Note 1, capitalised exploration expenditure of
$2,986,519 has been included in the consolidated entity’s financial statements as a non-current asset. The ultimate recovery of the
economic entity’s capitalised exploration expenditure is primarily dependent upon the successful development and commercial
exploitation of its mining activities (which would require the extension to existing exploration licences and ultimately, the granting
of a mining licence) or, alternatively, sale of the area of interest at an amount at least equal to book value.

As a result of the matters described in Note 1, there is significant uncertainty whether the Company will be able to continue as a
going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at
the amounts stated in the financial report.

Based on our review of the 31 January 2002 consolidated statement of financial performance and 31 January 2002 consolidated
statement of cash flows and the statement of financial position as at 31 January 2002 included in Section 10 of the Prospectus, we
have not become aware of any matter that makes us believe that the results of Indophil for the six months ended 31 January 2002
or the financial position of Indophil as at 31 January 2002, are not properly drawn up so as to give a true and fair view of
Indophil’s state of affairs, prepared in accordance with applicable Accounting Standards and other mandatory professional
reporting requirements (Urgent Issues Group Consensus Views).

Without qualification to the opinion expressed above, attention is drawn to the following matters.

As a result of the matters described in Note 1, there is a significant uncertainty whether the Company will be able to continue as
a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at
the amounts stated in the financial report.

In accordance with the consolidated entity’s accounting policy as described in Note 1, Exploration Expenditure of $3,055,193 has
been included in the consolidated entity’s financial statements as a non-current asset.The ultimate recovery of the consolidated
entity’s capitalised exploration expenditure is primarily dependent upon the successful development and commercial exploitation
of its mining activities (which would require the extension to existing exploration licenses and ultimately, the granting of a mining
license) or alternatively, sale of the areas of interest at an amount at least equal to book value.

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11. Investigating Accountants’ Report

4.2 Proforma Financial Information
Based on our review, which is not an audit, nothing has come to our attention which would indicate that the proforma consolidated
statement of financial position included in Section 10 of this Prospectus is not drawn up in accordance with the transactions set out
in Note 30 to the proforma consolidated statement of financial position and with generally accepted accounting practices as applied
in Australia for presenting proforma financial information in a Prospectus.

5. Subsequent Events
To the best of Arthur Andersen’s knowledge and belief, there are no material items, transactions or events subsequent to
31 January 2002 not already disclosed in Note 28 of the Financial Information in Section 10 that have come to our attention
during the course of our preparation of this report that would cause the information outlined within this report to be misleading.

6. Declarations
Arthur Andersen has provided audit, taxation and other general due diligence services to Indophil and will receive a professional
fee for the preparation of this report. Neither Arthur Andersen nor any of its staff have an interest in Indophil.

Arthur Andersen does not take any responsibility for, nor have they authorised or caused the issue of any part of the Prospectus
other than this Investigating Accountants’ Report.

Yours faithfully

Arthur Andersen
Chartered Accountants

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12 Additional Information

12.1 Incorporation
Indophil was incorporated in Victoria on 10 December 1996 as
a no liability company.

12.2 Company Tax Status

Indophil will be taxed in Australia as a public company.

12.3 Share Capital

At the date of this Prospectus, the number of fully paid shares on issue is 80,044,505. The Company has issued 24,473,000
options. The details of these options are set out in Section 12.9.

Shareholders with holdings of 500,000 ordinary shares or more in the Company as at the date of this Prospectus are listed below:

Shareholder Shares Held % of Issued Shares

Lion Selection Group Limited 36,000,000 44.97

Australian Selection Pty Ltd 6,000,000 7.50

Becalm Pty Ltd & Elmlore Pty Ltd 4,000,000 5.00

Alsons Development & Investment Corporation 3,125,000 3.90

MIM Holdings Limited 2,500,000 3.12

Haustella Pty Ltd 2,289,814 2.86

Chardere Pty Ltd ATF Existant Executive Superannuation Fund 2,000,000 2.50

Harry Fishman ATF Fishman Superannuation Fund 1,514,814 1.89

Weresyd Pty Ltd 1,500,000 1.87

Chris Neil Middleton 1,366,001 1.71

Palliser Limited 1,275,560 1.59

Leslie Alan Wilson 1,200,000 1.50

Thomas Stirling Tootell 1,125,000 1.41

Helgeo Nominees Pty Ltd 1,014,813 1.27

Tony William Robbins 1,000,000 1.25

Yandal Investments Pty Ltd 1,000,000 1.25

John Sinclair/ Anne Sinclair/ Alex Sinclair 1,000,000 1.25

Gregory James Doyle 750,000 0.94

Graeme Robert Linton 695,000 0.87

Berne No 132 Nominees Pty Ltd 525,000 0.66

Becalm Pty Ltd & Elmlore Pty Ltd ATF CE Exec Superannuation Fund 500,000 0.62

Comdain Management Pty Ltd 500,000 0.62

Eversley Pty Ltd 500,000 0.62

Graham George Boone 500,000 0.62

Others 8,163,503 10.20

TOTAL 80,044,505 100.00

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12.4 Rights Attaching to Shares
There is only one class of shares in the Company, fully paid
ordinary shares.
The rights attaching to shares are:
(a) set out in the Constitution of the Company; and
(b) in certain circumstances, regulated by the Corporations
Act, the ASX Listing Rules, the SCH Business Rules and
the general law.
The principal rights, liabilities and obligations of the
Shareholders are summarised below:
Voting
At a general meeting, every member present in person or by
proxy, attorney or representative has one vote on a show of
hands and one vote on a poll for each fully paid share held
(with adjusted voting rights for partly paid shares). Voting at
any meeting of Shareholders is by a show of hands unless a
poll is demanded. A poll may be demanded by at least five
Shareholders entitled to vote on the resolution, Shareholders
with at least five per cent of the votes that may be cast on
the resolution of the poll, or the chairperson. The
chairperson has a casting vote on a show of hands or on a
poll.
Dividends
The profits of Indophil which the Directors may from time
to time determine to distribute by way of dividend are
divisible amongst the members in proportion to the number
of shares held by them, subject to the rights attaching to the
shares with special dividend rights. No shares with special
dividend rights are currently on issue.
Issue of further Shares
The Directors may (subject to the restrictions on the issue
of shares imposed by the Constitution, the Listing Rules and
the Corporations Act) issue, grant options in respect of, or
otherwise dispose of further shares on terms and conditions
(including preferential, deferred or special rights, privileges or
conditions, or restrictions) as they see fit.
Variation of class rights
The procedure set out in sub-section 246B(2) of the
Corporations Act must be followed for any variation of
rights attached to the shares. Under that sub-section, with
the consent in writing of the holders of three quarters of the
issued shares in the particular class, or the sanction of a
special resolution passed at a meeting of the holders of
shares in that class, the rights attached to a class of shares
may be varied or abrogated. In either case, the holders of
not less than ten per cent of the votes in the class of shares
whose rights have been varied or abrogated may apply to a
12. Additional Information
court of competent jurisdiction to exercise its discretion to
set aside such variation or abrogation.
Transfer of Shares
Shareholders may transfer shares by a written transfer
instrument in the usual form or by a proper transfer effected
in accordance with the Business Rules of the Securities
Clearing House and ASX requirements. All transfers must
comply with the Constitution, the Listing Rules, the Business
Rules of the Securities Clearing House and the Corporations
Act. The Directors may refuse to register a transfer of
shares in circumstances permitted by the Listing Rules or
ASX. The Directors must refuse to register a transfer of
shares where required to do so by the Listing Rules.
General meeting and notices
Each Shareholder is entitled to receive notice of, attend and
vote at general meetings of the Company and to receive all
notices, accounts and other documents required to be sent
to Shareholders under the Constitution of the Company or
the Corporations Act.
Winding up
Subject to any special resolution or preferential rights
attaching to any class or classes of shares, members will be
entitled on a winding up to a share in any surplus assets of
Indophil in proportion to the shares held by them.
Proportional takeover provisions
The Constitution contains provisions for Shareholder
approval in relation to any proportional takeover scheme.
The provision will lapse unless renewed by a special
resolution of Shareholders in general meeting three years
from the date of its adoption.
Directors
The minimum number of Directors is three and the
maximum is fixed by the Directors but may not be more
than 12 unless the Shareholders of Indophil pass a resolution
varying that number. Directors are elected at annual general
meetings of Indophil. Retirement will occur on a rotational
basis so that one third of the Directors plus any Director
who has held office for 3 or more years or 3 or more annual
general meetings (excluding the Managing Director) retire at
each annual general meeting of Indophil. The Directors may
also appoint a Director to fill a casual vacancy on the Board
or in addition to the existing Directors, who will then hold
office until the next annual general meeting of Indophil.
Questions arising at a meeting of Directors will be decided
by a majority of votes of the Directors present at the
meeting and entitled to vote on the matter. In the case of a
tied vote, the chairman of the Board has a second or casting
vote, unless there are only two Directors present or
qualified to vote, in which case the proposed resolution is
taken as having been lost.
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12 Additional Information
Officers indemnity
Indophil, to the extent permitted by law, indemnifies each
officer of the Company on a full indemnity basis against any
liability (including costs and expenses) incurred by the
person as an officer of Indophil or a related body corporate
of Indophil.
Amendment
The Constitution may be amended only by a special
resolution passed by at least three quarters of the votes cast
by Shareholders entitled to vote on the resolution. At least
28 days written notice specifying the intention to propose
the resolution must be given.
12.5 Taxation Implications for
Applicants
The acquisition and disposal of Shares and Options in the
Company will have tax consequences, which will differ
depending on the individual financial affairs of each Applicant.
All potential Applicants in the Company are urged to take
independent financial advice about the consequences of
acquiring Shares and Options from a taxation viewpoint and
generally.
To the maximum extent permitted by law, the Company, its
officers and each of their respective advisers accept no
liability or responsibility with respect to the taxation
consequences of subscribing for Shares and Options under
this prospectus.
The following is a brief summary of some of the Australian
income tax consequences for Shareholders as a result of
acquiring Shares issued under the Offer in the prospectus.
The advice in this report considers only Australian resident
individual Shareholders who are taxed as investors on capital
account.
Non-individuals, including companies and trusts, and non-
resident investors are not considered in this summary. The
consequences for individuals who receive amounts through a
trust are also not considered. If this affects you, we
recommend that you obtain your own independent advice
from your own professional adviser as to the consequences
in respect of a proposed investment in Indophil before
proceeding with any investment.
The summary of taxation matters in this report is based on
the Australian income tax legislation, and established
interpretations of that legislation (the Tax Laws), as at the
date of the Prospectus. The summary is, of necessity, general
in nature because the tax outcomes for each investor may
differ depending on their particular facts and circumstances.
138
c o n t ’d
(1) Dividends
A dividend will be franked to the extent that it is declared to
be franked by a company paying the dividend. An Australian
resident company is able to frank dividends where it has paid
Australian company tax at the prevailing tax rate on the
profits out of which that dividend is paid, or itself receives
franked dividends which it distributes to its own investors.
This section does not deal with any transaction that could
result in the triggering of Tax Law provisions dealing with
trading in or streaming of franking credits.
Franked Dividends
The position of an investor will depend on whether the
investor is a ‘qualified person’. Indophil investors who hold
Shares in their own name will only be qualified persons in
relation to dividends paid on those Shares if, in broad terms,
they hold Shares at risk for at least 45 days (excluding the
day of acquisition and the day of disposal), or, in the case of
individuals, their total franking rebate entitlement in a year
from all sources is less than $5,000.
The application of the rules depends upon the particular
circumstances of the investor. We recommend that investors
seek their own professional advice if they hold Shares for
less than 45 days before a dividend is paid, or where they
have entered into any form of hedge or option in relation to
the Shares.
Individuals who are ‘qualified’ resident investors, who receive
a franked dividend will include the dividend received plus the
imputation credit attached to the dividend in their assessable
income. The imputation credit attached to the dividend will
be allowed as a rebate against tax payable on the investor’s
total assessable income. If the investor is not in a position to
utilise all available imputation credits because they exceed
tax payable, the investor may receive a refund of any excess
imputation credits.
Unfranked Dividends
Individuals who receive an unfranked dividend will include
the dividend received in their assessable income.
(2) Disposal of Shares
Investors who dispose of their Shares for consideration in
excess of their cost base will generally be subject to tax under
the capital gains tax provisions of the Australian tax laws.
Under the capital gains tax provisions, a distinction is drawn
between Shares held for less than 12 months before disposal
and Shares held for 12 months or more before disposal.
In general, if the Shares are held for less than 12 months, the
capital gain will be equal to the excess (if any) of the
consideration received on disposal of the Shares over their
cost base.
Indophil Section 12 14/3/02 6:07 PM Page 139
If the Shares are held for 12 months or more, the capital gain
is also calculated on the difference between the
consideration received on the disposal and the cost base of
the Shares. However individuals may be entitled to claim a
CGT discount which, in general, is worked out as follows:
The individual must calculate the capital gain on the
difference between the price received and the cost base of
the Shares; and
If the individual has any available capital losses, they must be
deducted against the capital gain; and
Only one half of the capital gain remaining after deduction of
capital losses (if any) is then included in taxable income.
Investors who dispose of their Shares for consideration less
than their cost base will incur a capital loss. A capital loss
may be offset against capital gains that arise in the same year
of income or a subsequent year of income. A capital loss
may not be offset against other assessable income.
Different consequences will arise for investors who hold
their Shares on revenue account (eg. as trading stock).
Investors in this position should seek their own specific
taxation advice.
(3) Tax File Number and Australian Business
Number
Australian investors may quote their Tax File Number (‘TFN’)
or Australian Business Number (‘ABN’) to Indophil in
connection with the acquisition of Shares. If a TFN or ABN
(or exemption) is not quoted, tax may be deducted from
payments of unfranked dividends at the top marginal rate
of 47% plus Medicare Levy, which is currently levied at a
rate of 1.5%.
(4) Exercise or Sale of Options
No capital gain or loss will arise to Shareholders upon the
exercise of the Option attaching to the Share.You will be
taken to have acquired the share issued at the date of the
exercise of the Option. The shares issued on exercise will
generally have a cost base for CGT purposes of the amount
paid on exercise. However, investors who already own
shares or convertible interests in the Company, prior to the
acquisition of the Shares and Options pursuant to the Offer,
will be subject to specific provisions that affect the cost base
of the shares acquired on exercise of the Option and should
seek advice on this matter.
Any amount received on the disposal of Options separately
to the sale of the attached Shares, if allowed, will be taxable
as either a capital gain or on revenue account as outlined
above for the disposal of Shares. The CGT discount may be
available if the Option was held for greater than 12 months.
12. Additional Information
12.6 Material Contracts
The Directors consider that there are a number of contracts
which are significant or material to the Company or of such
a nature that an investor may wish to have particulars of
them when making an assessment of whether to apply for
Shares. The main provisions of each material contract is
summarised below or, in respect of material contracts
relating to the Solicitors’ Report - Philippine Tenements or
the Tampakan Project, in Sections 8 and 9 of this Prospectus
respectively. These summaries do not purport to be
complete and are qualified in their entirety by reference to
the text of the contracts themselves.
(a) Underwriting Agreement
The Offer (but not the exercise of the Options) is
underwritten by the Underwriter pursuant to an
underwriting agreement dated 14 March 2002 between
the Company and the Underwriter (Agreement).
Underwriting
The underwriter underwrites the initial public offer of the
Shares (Offer) but does not underwrite the exercise of the
attaching Options.
The obligation of the Underwriter to underwrite the Offer
is conditional upon the Company lodging the prospectus
with ASIC.
Commissions Fees and Expenses
Under the Agreement, subject to completion of the Offer,
the Company has agreed to pay to the Underwriter:
an underwriting fee equal to 4% of the total Application
Money payable for all the Shares (but not the shares
resulting from exercise of the Options) in the Offer
(being a total of $200,000); and
a management fee equal to 1% of the total Application
Money payable for all of the Shares (but not the shares
resulting from exercise of the Options) in the Offer
(being a total of $50,000).
Where the Underwriter terminates the agreement in certain
circumstances (including, for example, where there is a
material adverse change in the financial position, results of
operations or prospects of the Company), the Company
must pay the Underwriter an amount of up to $100,000.
In addition to the fees described above, the Company has
agreed to pay the Underwriter for certain agreed costs
and expenses incurred by the Underwriter in relation to
the Offer.
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12 Additional Information
Termination Events
The Underwriter may terminate its obligations immediately
by written notice to the Company in a number of
circumstances which are normal in agreements of this nature
including if:
within the specified timeframe, ASX refuses or fails to
grant unconditional approval, or conditional approval
subject only to standard conditions, for official quotation
of the Shares in the Offer or withdraws such approval;
any circumstance arises after the lodgement date of the
Prospectus that results in the Company either repaying
the money received from Applicants or offering Applicants
an opportunity to withdraw their applications and be
repaid their Application Money;
the Standard & Poors/ASX 200 Index or the Gold Index
of ASX is at the close of Normal Trading on any three
consecutive Trading Days prior to the Allotment Day
more than 10% below the level of that Index at the close
of Normal Trading on the date before the date of signing
the Agreement;
the Gold Price is on any three consecutive Trading Days
prior to the Allotment Day less than US$260;
Provided that in the reasonable opinion of the Underwriter,
one of the following events has or is likely to have a material
adverse effect on a decision of an investor to invest in the
Shares or could lead to liability for the Underwriter under
the Corporations Act or any other applicable law, the
Underwriter may terminate the Agreement by notice in
writing to the Company in circumstances including:
the Company or any of its subsidiaries alters its capital
structure or its constitution in any material respect
without the prior written consent of the Underwriter;
there is a change in the financial position, results of
operations or prospects of the Company;
the Company fails to perform or observe any of its
material obligations under the agreement and that failure
is not remedied before the Allotment Day;
certain changes of law occur, or a policy is adopted by a
Governmental Agency, which would or would be likely to
have a material adverse effect on the success of the Offer;
any contract material to the business of the Company is
terminated, rescinded, altered or amended in a material
respect or is found to be void or voidable without the
prior written consent of the Underwriter;
there is an outbreak of hostilities not presently existing or
a terrorist act or a significant escalation of existing
hostilities (whether war has been declared or not) or civil
140
c o n t ’d
or political unrest involving countries including Australia,
New Zealand, the United States of America, the United
Kingdom, Israel, Japan, Russia, China or the Philippines;
a representation or warranty given by the Company
under the agreement proves to be, or becomes, untrue or
incorrect in any material respect and the matters
rendering the representation or warranty untrue are not
remedied to the reasonable satisfaction of the
Underwriter before the Allotment Day;
there is a contravention by the Company or any Officer
of any provision of its constitution, the Corporations Act,
any requirement of ASX or any other law;
a Director of the Company resigns or upon the
retirement, termination, death or permanent disability of
an Executive Director of the Company;
a material statement in the Prospectus is found to be
untrue, misleading or deceptive or it is found that the
Prospectus contains a material omission;
ASIC issues a stop order under section 739(1) or (3) of
the Corporations Act or gives notice of intention to hold
a hearing in relation to the Prospectus under section
739(2) of the Corporations Act;
any person gives a notice under section 730 or section
733(3) of the Corporations Act in relation to the Prospectus;
the Company fails to lodge a supplementary or
replacement prospectus in a form acceptable to the
Underwriter where the Underwriter reasonably believes
the Company is prohibited by section 728(1) of the
Corporations Act from offering Shares under the
Prospectus;
the Company or any of its subsidiaries is placed under
official management or voluntary administration or an
official manager or administrator is appointed;
an inspector is appointed pursuant to the Corporations
Act to investigate all or any part of the affairs of the
Company or any of its subsidiaries; or
any Officer of the Company or any of its subsidiaries is
charged with or convicted of any criminal offence
involving fraudulent or dishonest conduct.
Warranties
The agreement contains certain warranties by the Company
relating to matters such as conduct by the Company and
information provided by the Company in relation to the
Prospectus and the Offer.
Indophil Section 12 14/3/02 6:07 PM Page 141
Company Indemnity
Subject to certain exceptions, the Company indemnifies the
Underwriter and each Director, officer, employee, agent and
adviser of the Underwriter (Indemnified Parties) against all
damages, losses, expenses or liabilities directly or indirectly
suffered or incurred and all claims, actions, proceedings or
demands arising out of or in connection with matters including:
non-compliance with any statutory requirement for the
Prospectus or the Offer;
any material misstatement, materially inaccurate or
misleading statement or any material non-disclosure in
the Prospectus;
the issue, distribution, circulation or publication of the
Prospectus;
any representation or warranty made or given under
the agreement which is untrue or incorrect in any
material respect;
any announcement, advertisement or publicity made or
distributed by or on behalf of an Indemnified Party in
relation to the Company or the Offer with the Company’s
prior approval; and
any statement made or issued by an Indemnified Party to
the extent that it is made or issued in good faith and in
reliance on the Prospectus or on any material or
information provided by or on behalf of the Company.
(b) Employment Agreements
The Company has entered into an employment agreement
with each of the executive directors,Tony Robbins and Chris
Middleton. Generally speaking, the employment agreements
contain similar terms.
Tony Robbins has been appointed Managing Director of the
Company and Chris Middleton, Director of Exploration.
The term of engagement of each executive is for a period of
5 years commencing on 1 November 1997 and ending on
31 October 2002.
Each executive's remuneration package (including allowance)
is in accordance with normal mining industry standards. Each
executive’s salary is to be reviewed yearly in line with the
executive's performance.
It is proposed that the executive directors will enter into
new long-term agreements with the Company soon after it is
admitted to the Official List of the ASX.
12. Additional Information
(c) Philippine Tenement Agreements
For details of material contracts relating to Philippine
Tenements refer to the Solicitors’ Report - Philippine
Tenements in Section 8.
(d) Tampakan Project
For details of material contracts relating to the Proposed
Tampakan Acquisition refer to Section 9.5.
12.7 Interests of Directors, Advisers
and Promoters
Other than as stated in Sections 12.7.1 and 12.7.2 and
elsewhere in this Prospectus:
1. no amount has been paid or agreed to be paid and no
benefit has been given or agreed to be given to a
director, or proposed director to induce them to
become, or to qualify as, a director of Indophil;
2. none of the following persons:
a director or proposed director of Indophil;
each person named in the Prospectus as performing
a function in a professional, advisory or other
capacity in connection with the preparation or
distribution of the Prospectus;
a promoter of Indophil; or
a stockbroker or underwriter (but not a sub-
underwriter) to the issue of the Shares,
holds or held at any time during the last two years an
interest in:
the formation or promotion of Indophil;
property acquired or proposed to be acquired by
Indophil in connection with its formation or
promotion or the Offer of the Shares; or
the Offer of the Shares; or
was paid or given or agreed to be paid or given any
amount or benefit for services provided by such persons
in connection with the formation or promotion of
Indophil or the Offer of the Shares.
12.7.1 Directors’ Interests
Directors’ shareholdings
The Directors are not required to hold any shares under the
provisions of the Company’s Constitution. The Directors
may acquire Shares offered for subscription pursuant to this
Prospectus.
Set out on page 142 are details of the interests of the
Directors in shares and options in the Company immediately
before the lodgement of the Prospectus with the ASIC.
Interests include those held directly or otherwise.
141
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12 Additional Information contd

Directors Shares Options

R Bryan Davis 100,000 100,000 with an exercise price of 20 cents exercisable on or before 1 October 2003.
200,000 with an exercise price of 35 cents exercisable on or before 10 May 2004,
200,000 with an exercise price of 50 cents exercisable on or before 10 May 2004.

Tony Robbins 1,000,000 1,055,750 with an exercise price of 35 cents exercisable on or before 10 May 2004,
1,055,750 with an exercise price of 50 cents exercisable on or before 10 May 2004.

Chris Middleton 1,366,001 1,055,750 with an exercise price of 35 cents exercisable on or before 10 May 2004,
1,055,750 with an exercise price of 50 cents exercisable on or before 10 May 2004.

Kevin Robinson Nil Nil

Directors’ remuneration
The remuneration of the executive directors will be in
accordance with the terms of their individual employment
agreements in Section 12.6(b).
The constitution of the Company provides that the
non-executive directors of the Company are entitled to
such remuneration, as determined by the Directors which
remuneration must not exceed in aggregate the maximum
amount determined by the Company in general meeting.
Currently it has been determined that such remuneration
will not exceed $300,000 per annum, to be apportioned
among the Directors as they determine in their absolute
discretion.
For the current financial year, it is expected that non-
executive directors’ fees will not exceed $120,000 in total.
12.7.2 Interests of Advisers
Activities in relation to the Indophil IPO were suspended in
September 2001as a consequence of events in the USA.The
IPO was reactivated in January 2002.
1. ABN AMRO Morgans Corporate Limited has acted as
Underwriter to the Offer. Details of the fees in respect of
the underwriting of the Offer are set out in Section 12.6.
Jamora and Somera has also provided the Solicitors’
Report – Philippine Tenements contained in Section 8 of
this Prospectus. Indophil has paid $147,571 for services
to September 2001and agreed to pay approximately
$30,000 for additional services to the date of this
Prospectus. Further amounts may be paid to Carag,
Caballes, Jamora and Somera in accordance with its time
based charge out rates.
5. Arthur Andersen has acted as Investigating Accountant to
the Offer and has prepared the Investigating Accountants’
Report included in this Prospectus. Arthur Andersen has
also performed due diligence enquiries in relation to
financial accounting and taxation matters. Indophil has
paid $103,350 for services to September 2001 and
agreed to pay approximately $30,000 for additional
services to the date of this Prospectus. Further amounts
may be paid to Arthur Andersen in accordance with their
time-based charge-out rates. Arthur Andersen are
Indophil’s auditors and taxation advisers.
6. Exploration Services International has provided the
Independent Geologist’s Report contained in Section 7
of this Prospectus. Indophil has paid $81,724 for
services to September 2001 and agreed to pay
approximately $5,000 for additional services to the date
of this Prospectus.

2. ABN AMRO Morgans Limited has acted as Broker to the
issue and will share in the fees refered to in 1
immediately above.
3. Freehills has acted as Australian legal adviser to Indophil
in connection with the Offer and has performed work in
relation to Australian due diligence enquiries on legal
matters. Indophil has paid $283,416 for services to
September 2001 and agreed to pay approximately
$50,000 for additional services to the date of this
Prospectus. Further amounts may be paid to Freehills in
accordance with its time-based charge-out rates.
7. Computershare Investor Services Pty Limited has been
appointed to act as Share Registrar of Indophil in
relation to the Offer. Indophil has paid or agreed to pay
approximately $5,000 for those services to the date of
this Prospectus.
Unless stated otherwise, all such payments have been paid or
are payable in cash. Indophil is also generally obligated to pay
the out-of-pocket expenses of the advisers listed above
which are included in the amounts stated.

4. Carag, Caballes, Jamora and Somera has acted as Filipino

legal adviser to the Offer and has performed work in
relation to Filipino due diligence enquiries on legal
matters and other related legal matters. Carag, Caballes,
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12. Additional Information

12.8 Advisers’ Consents and
Disclaimers of Responsibility
Written consents to the issue of this Prospectus have been
given and, at the time of lodgement of this Prospectus with
the ASIC, had not been withdrawn by the following parties:
1. ABN AMRO Morgans Corporate Limited has given,
and not withdrawn prior to the lodgement of this
Prospectus with the ASIC, its written consent to be
named in this Prospectus as the Underwriter to this
Offer in the form and context it is so named. ABN
AMRO Morgans Corporate Limited has not caused
or authorised the issue of this Prospectus.
2. ABN AMRO Morgans Limited has given, and not
withdrawn prior to the lodgement of this Prospectus
with the ASIC, its written consent to be named in this
Prospectus as the Broker to this Offer in the form
and context it is so named. ABN AMRO Morgans
Limited has not caused or authorised the issue of
this Prospectus. ABN AMRO Morgans Limited makes
no representations and takes no responsibility for
any statements in or omissions from any part of
this Prospectus.
3. Freehills has given, and not withdrawn prior to the
lodgement of this Prospectus with the ASIC, its written
consent to be named in this Prospectus as Indophil’s
Australian legal advisers in the form and context it is so
named. They take no responsibility for any part of this
Prospectus other than any reference to its name.
6. Exploration Services International has given, and not
withdrawn prior to the lodgement of this Prospectus
with the ASIC, its written consent to be named in this
Prospectus as the Independent Geologist in the form
and context they are so named and has not withdrawn
its consent to the inclusion in this Prospectus of the
Independent Geologist’s Report and the statements
attributed to it in the form and context in which they
are included. Exploration Services International takes no
responsibility for any part of this Prospectus other than
any reference to its name, its Independent Geologist’s
Report and statements attributed to it.
7. Alan Buenavista and Christopher Middleton have given
and not withdrawn prior to lodgement of this
Prospectus with the ASIC, their written consent to the
inclusion of statements concerning Indophil’s properties
attributed to each of them in this Prospectus.
8. Computershare Investor Services Pty Limited has given,
and not withdrawn prior to the lodgement of this
Prospectus with the ASIC, its written consent to be
named in this Prospectus as the share registrar to
Indophil in the form and context in which it is so
named. Computershare Investor Services Pty Limited
has had no involvement in the preparation of any part of
this Prospectus other than recording of its name as
share registrar to Indophil.

4 Carag, Caballes, Jamora and Somera has given, and not

withdrawn prior to the lodgement of this Prospectus
with the ASIC, its written consent to be named in this
Prospectus as Indophil’s Filipino legal advisers in the
form and context it is so named. Carag, Caballes, Jamora
and Somera has given, and not withdrawn prior to the
lodgement of this Prospectus with the ASIC, its written
consent to the inclusion in this Prospectus of its
Solicitors’ Report - Philippine Tenements in the form and
context in which it is included. Carag, Caballes, Jamora
and Somera takes no responsibility for any part of this
Prospectus other than any reference to its name and its
Solicitors’ Report - Philippine Tenements.

5. Arthur Andersen has given, and not withdrawn prior to

the lodgement of this Prospectus with the ASIC, its
written consent to be named in this Prospectus as
Auditor and Investigating Accountant to Indophil in the
form and context it is so named and has not withdrawn
its consent to the inclusion in this Prospectus of its
Investigating Accountants’ Report in the form and
context in which it is included. Arthur Andersen takes
no responsibility for any part of this Prospectus other
than any reference to its name and its Investigating
Accountants’ Report.

143
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12 Additional Information contd

12.9 Options
12.9.1Options on issue
A total of 24,473,000 options have been issued by the Company as at the date of this Prospectus.
The holders of these options and their key terms are set out below:

Option Holder Number of Options Note Totals

Alsons Development and Investment 1,000,000 3
Corporation 1,000,000 2
2,500,000 4 4,500,000
Lion Selection Group Limited 2,500,000 4
1,250,000 4 3,750,000
Australian Selection Pty Ltd 3,000,000 4 3,000,000
MIM Holdings Limited 2,500,000 4 2,500,000
Christopher Neil Middleton 1,055,750 1
1,055,750 2 2,111,500
Tony William Robbins 1,055,750 1
1,055,750 2 2,111,500
Becalm Pty Ltd & Elmlore Pty Ltd 2,000,000 4 2,000,000
John Sinclair/Anne Sinclair/Alex Sinclair 1,000,000 4 1,000,000
Yandal Investments Pty Ltd 1,000,000 4 1,000,000
Comdain Management Pty Ltd 500,000 4 500,000
Harry Fishman atf Fishman Superannuation Fund 500,000 4 500,000
Bryan Davis 200,000 1
200,000 2 400,000
Alan Buenavista 125,000 1
125,000 2 250,000
Darrell Franklin Tuck 250,000 4 250,000
Haustella Pty Ltd 250,000 4 250,000
Palliser Ltd 250,000 4 250,000
RB Davis atf RB & AM Davis Superannuation Fund 100,000 4 100,000
Total 24,473,000

• 1. Exercise price: 35 cents. Expiry date: 10 May 2004 • 3. Exercise price: 35 cents. Expiry date: 10 May 2002
• 2. Exercise price: 50 cents. Expiry date: 10 May 2004 • 4. Exercise price: 20 cents. Expiry date: 01 October 2003

12.9.2 Terms and conditions of the options

on issue
1. The options are exercisable by the holder at any time 5. In the event of any reorganisation (including
prior to the relevant expiry date; consolidation, subdivision, reduction or cancellation) of
the issued capital of the Company, the options are to be
2. The shares issued as a result of the exercise of any of reorganised in a manner required by the ASX Listing
these options will rank equally in all respects with Rules on a reorganisation of capital.
previously issued shares;

3. Subject to the ASX Listing Rules, the options are

not transferable in whole or part at any time prior
to expiry;

4. Option holders are permitted to participate in new

issues of securities offered to Shareholders on the prior
exercise of the option in which case the option holder
shall be afforded the period of at least 10 business days
prior to and inclusive of the books’ closing date (to
determine the entitlement to the issue) to exercise the
option; and

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12. Additional Information

12.9.3 Terms and conditions of Options under
the Offer
For each Share subscribed to and issued pursuant to this
Prospectus, Shareholders will receive one Option for nil
consideration.These Options will be issued on the following
terms and conditions:
Issue Ratio
One Option for every Share subscribed to and issued
pursuant to this Prospectus
Issue Date
New Issues
Holders of the Options will not be entitled to participate in
new issues of capital which may be offered to existing
Shareholders during the currency of the Options.
However, Option holders have the right to exercise their
Options in respect of such new issues of capital.
Reconstruction of Capital
The rights of an Option holder may be changed in order to
comply with the ASX Listing Rules applying to a
reconstruction of capital at the time of the reconstruction.

The Options will be issued on the same day as the issue of Listing
Shares.
Application will be made for the Options to be separately
Issue Price listed on the ASX.

The Options will be issued at nil consideration. 12.10 Costs of the Offer
Exercise Price The expenses connected with the Offer which are payable by
the Company, including underwriting and management fees
Subject to the ASX Listing Rules, each Option will be
payable to the Underwriter, accounting fees, legal fees,
exercisable at $0.25.
independent expert fees, share registry fees Prospectus
No Change design and publishing costs, ASX fees and other
miscellaneous expenses are estimated to be approximately
The Options do not confer any right upon the Option $1,243,000 as tabulated below.
holders to a change in the exercise price of each Option or
a change to the number of Shares over which each Option Underwriting and Management fees $250,000
can be exercised. - Legal (Philippines) $178,000
- Legal (Australia) $330,000
Options Exercise Period - Investigating Accountant $133,000
The Option holders may exercise their Options at any time - Independent Geologist $87,000
prior to 31 December 2004. Further, at any time after 90 days - Resource Adviser $46,000
from the Listing Date, the Company may call for the exercise Design and Printing $137,000
of the Options. If the call for the exercise for the Options is Listing & lodgement fees $32,000
made, the Company will announce an exercise period of 40 Mailing & distribution costs $25,000
business days for the exercise of the Options. Any Options Share Registrar $5,000
not exercised during the exercise period will be forfeited. The Miscellaneous Expenses $20,000
Directors may set the timing of the call for the exercise of the Total $1,243,000
Options at their discretion, subject to a final date for exercise
As at the date of this prospectus approximately $724,000
of the Options of 31 December 2004.
had been paid.
Dividends
12.11 Litigation and Claims
The Options will not rank for dividends. From their date of
So far as the Directors are aware, there is no current or
allotment, shares issued upon exercise of the Options will
threatened civil litigation, arbitration proceedings or
rank equally with shares, and will be entitled to participate,
administrative appeals, or criminal or governmental
without restriction, in any dividend declared on shares for
prosecutions of a material nature in which Indophil is directly
which the record date is on or after the date of issue of the
or indirectly concerned which is likely to have a material
shares arising on exercise of the Options.
adverse effect on the business or financial position of
Voting Indophil, other than the proceedings referred to in Section 9
in relation to the Proposed Tampakan Acquisition.
The Options do not entitle the holder to vote at meetings
of Shareholders.

145
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12 Additional Information contd

12.12 ASIC and ASX relief

Pursuant to Class Order 00/44 the ASIC has exempted
compliance with certain provisions of the Corporations Act
to allow distribution of an electronic Prospectus on the basis
of a paper prospectus lodged with the ASIC and the
publication of notices referring to an electronic Prospectus,
subject to compliance with certain provisions.

The ASX has granted the Company an in principle waiver of

Listing Rule 6.18 in respect of rights granted by the company
to MIM under the MIM MOU which, in the event of future
capital raisings by the Company gives MIM the right to
subscribe for additional shares to the extent necessary to
maintain its percentage level of shareholding in the Company
and to underwrite up to 25% of the additional capital raising
(see Section 9.5.5(3)).

12.13 Consents
WCM and its subsidiaries have given, and not withdrawn
prior to lodgement of this Prospectus with the ASIC, their
written consent to the references to them in this
Prospectus.WCM and its subsidiaries take no responsibility
for any part of this Prospectus.

MIM has given, and not withdrawn prior to lodgement of this

Prospectus with the ASIC, their written consent to the
references to them in this Prospectus. MIM takes no
responsibility for any part of this Prospectus.

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13. Statement by Directors

13 Statement by Directors

The Directors report that after due inquiries by them, in

their opinion, since the date of the financial statements in the
financial information in Section 10, there have not been any
circumstances that have arisen or that have materially
affected or will materially affect the assets and liabilities,
financial position, profits or losses or will materially affect
the prospects of the Company, other than as disclosed in
this Prospectus.

The Prospectus is authorised by each Director of the

Company who consents to its lodgement with the ASIC
and its issue.

Signed by each Director of the Company.

Dated: 14 March 2002

_________________________________________________
R Bryan Davis

_________________________________________________
Tony W Robbins

_________________________________________________
Christopher N Middleton

_________________________________________________
Kevin P Robinson

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1 4 G l o s s a r y o f Te r m s

14.1 Defined Terms

Acquisition Support Agreement or ASA means the acquisition support agreement between the Company and the TGC dated
28 September 2000 discussed in Section 9.5.2.
Agreed Work Program means the draft three year work program to be agreed by the Company and MIM in accordance
with the MIM MOU (see Section 9.5.5).
Alcantara Group means a Philippino business conglomerate with major business interests in Mindanao.
Alsons means Alsons Corporation, a member of the Alcantara Group.
Alsons Option means the option granted to Alsons under the agreement described in Section 9.5.6.
Alternate Option means the alternate option granted to MIM under the MIM MOU to acquire an interest in the
incorporated joint venture company described in Section 9.5.5.
Aldevinco means Alsons Development and Investment Corporation, a member of the Alcantara Group.
Applicant means a person who submits an application under this Prospectus.
Application Form means the application form attached to this Prospectus in respect of the Offer.
Application Monies means the Offer Price multiplied by the number of Shares applied for.
ASIC means the Australian Securities and Investment Commission.
ASX means the Australian Stock Exchange Limited ACN 008 624 691.
ASX Listing Rules or Listing Rules means the Listing Rules of the ASX as amended from time to time by the ASX.
Avantgarde means Avantgarde Mining Corporation.
BOI means the Philippines Board of Investment.
Board means the Board of Directors of Indophil Resources NL.
BTA means the La Bugal-B’aan Tribal Association and others.
Chase Resources (Chase) means the Chase Group of Companies, Canada.
Closing Date means the date on which the Offer closes.
CHESS means the ASX Clearing House Electronic Sub-registry System.
Columbio FTAA means the Financial and Technical Assistance Agreement between WMCI and the Government of
the Republic of Philippines dated 22 March 1995 in relation to the exploration, development,
production and exportation of mineral deposits within an area located near the towns of
Tampakan and Columbio on the Southern Island of Mindanao, Philippines.
Company means Indophil Resources NL A.B.N. 45 076 318 173.
Corporations Act means the Corporation Act 2001
Court of Appeals means the Court of Appeals of the Republic of the Philippines.
Dalton Pacific means Dalton Pacific Resources Inc., a subsidiary of Oxiana.
Deed of Absolute Sale means the Deed of Absolute Sale between the TGC and WMCI dated 23 January 2001.
DENR means the Philippines Department of Environment and Natural Resources.
Directors means the Directors of the Company.
Eastern Gold means Eastern Corporation Limited of Australia, formally Eastern Copper.
Environmental Compliance Certificate means a document issued by the DENR, that gives guidelines and conditions to companies/project
proponents in order to ensure compliance with Philippines environmental laws and standards.
EP means Exploration Permit as defined in the Philippine Mining Act, 1995 (see Section 8.1).
Exploration Management Agreements means:
(a) the Exploration Management Agreement between the Company and the TGC dated 28
September 2000 discussed in Section 9.5.3; and
(b) the Exploration Management Agreement that will be executed between the Company and the
Tampakan Holdco at Holdco Completion discussed in Section 9.5.3.
Financial and Technical Assistance
Agreement or FTAA means a Financial and Technical Assistance Agreement entered into in accordance with the
provisions of the Philippine Mining Act (Republic Act 7942) as implemented through the Act’s
Implementing Rules and Regulations (see Section 8.1).
First Bank Undertaking means a US$500,000 bank undertaking provided by the TGC to WMCI to secure the TGC’s
payment of the Tampakan Project Expenses from and including 31 May 2000 up to and including
1 June 2001 as described in 9.5.1.
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14. Glossary of Terms

First Sale and Purchase Agreement means the sale and purchase agreement between the TGC and WMCI dated 6 October 2000
discussed in Section 9.5.1.
Formal Agreements means the formal agreements to be entered into by the Company and MIM reflecting the terms of
MIM MOU.
FTAA Legal Proceedings means the legal challenge by the BTA to the validity of the FTAAs as discussed in Section 9.4.
Further Bank Undertakings means the four bank undertakings of US$250,000 each payable by the TGC to WMCI under the
second Sale and Purchase Agreement to secure the TGC’s payment of the Tampakan Project
expenses from 1 June 2001 to 31 January 2003.
Hillcrest means Hillcrest Incorporated a company organised under the law of the Republic of the
Philippines, being a wholly owned subsidiary of WMCI.
Holdco Completion means the completion of the transfer of the WMCP Shares and Hillcrest Shares to Holdco, the
appointment of the Company’s nominees to the board of directors of WMCP and Hillcrest, and
the finalisation of the associated documentation.
Holdco means a company to be organised under the law of the Republic of the Philippines that will hold all
the issued shares in WMCP and all the issued shares in Hillcrest.
Holdco Shares means all the issued shares in Holdco.
Initial Subscription means the payment of $500,000 by MIM to the Company for the issue of shares as described in
Section 9.5.5.
IRPI means Indophil Resources Phils Inc.
IPRA means the Philippines Indigenous Peoples Rights Act.
JORC means the Australian Joint Ore Reserve Committee Code for the reporting of resources and or
reserves.
Lepanto means Lepanto Consolidated Mining Company a company organised under the law of the Republic
of the Philippines.
Listing Date means the date of listing of the Company on the ASX.
Lepanto Sale Agreement means a sale and purchase agreement dated 12 July 2000 between WMC and Lepanto.
MAB means the Mines Adjudication Board of the MGB
Managing Director means the Managing Director of the Company.
Marcopper means Marcopper Corporation of the Philippines.
MGB means the Mines and Geosciences Bureau of the Philippines.
MIM or MIM Holdings Limited means MIM Holdings Limited or such associated MIM Group company as may be nominated by
MIM Holdings Limited.
MIM Option means the option granted by the Company to MIM to acquire an interest in the incorporated joint
venture company described in Section 9.5.5.
MIM MOU means the memorandum of understanding between MIM and the Company dated
28 September 2000 and amended by amending agreements dated 20 August 2001 and
5 March 2002 as discussed in Section 9.5.5.
MOU means the memorandum of agreement between the Company and the TGC dated
8 September 2000.
MPSA means Mineral Production Sharing Agreement as defined in the Philippines Mining Act, 1995
(see Section 8.1).
MRTC means Makati Regional Trial Court.
NPA means the New Peoples Army, a guerilla group in the Philippines.
NSM means the Northern Sierra Madre Project as described in this Prospectus
NSR means net smelter return royalty.
Offer means the Offer of Shares and Options pursuant to this Prospectus.
Offer Price means $0.25 per Share as offered under this Prospectus.
Offer Period means the period from the date on which the Offer opens, to and including the date on which the
Offer closes
Opening Date means the date on which the Offer opens.
Operating Interest means the interest in the revenues of the Tampakan Project, after satisfaction of a fixed royalty
payable to the TGC, derived through a shareholding in Holdco, the incorporated joint venture
company that will wholly own the WMCP Shares and the Hillcrest Shares. 149
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1 4 G l o s s a r y o f Te r m s c o n t ’d

Options means options offered under this Prospectus to acquire shares in the Company as set out in
Section 12.9.3 of this Prospectus.
Option Fee means the amount payable by MIM following the exercise of the MIM Option as discussed in
Section 9.5.5.
Oxiana means Oxiana Resources NL, a Melbourne based exploration and mining company.
PD463 means mineral claims as defined by the old Philippines Mining Law PD463.
P/PHP means Philippine Peso.
Philippines Government means the Government of the Republic of the Philippines.
PMEA means the Philippine Mineral Exploration Association.
PNOC means the Philippines National Oil Company.
Proposed Tampakan Acquisition means the proposed acquisition by the Company of an interest in the Tampakan Project as
discussed in Section 9.
Prospectus means this Prospectus offering Shares and Options in the Company.
Quotation means the quotation of Shares and Options of the Company on the ASX.
Sagittarius Mines Inc means Sagittarius Mines Inc, one of the Tampakan Group of companies.
Second Sale and Purchase Agreement means the sale and purchase agreement between the TGC and WMCI dated 10 January 2001
discussed in Section 9.5.1.
Shareholder means a shareholder in Indophil Resources NL, ABN 45 076 318 173.
Shareholders Agreement means the shareholders agreement between the Company and the TGC dated 28 September 2000
discussed in Section 9.5.4.
Shares means ordinary fully paid shares in the capital of the Company offered under this Prospectus.
Supreme Court means the Supreme Court of the Republic of the Philippines.
Tampakan Completion means completion of the sale of the WMCP Shares and Hillcrest Shares to the TGC under the
Second Sale and Purchase Agreement.
Tampakan Deposit means the Tampakan copper-gold deposit located near the northern end of the volcanic arc that
extends from northern Sulawesi in Indonesia to Central Mindanao in the Philippines as identified in
Figure 9.1.
Tampakan Group of Companies or TGC means Southcot Mining Corporation,Tampakan Mining Corporation and Sagittarius Mines Inc.
companies organised under the law of the Republic of the Philippines.
Tampakan Legal Proceedings means the action commenced by Lepanto in the MRTC discussed in Section 9.3.
Tampakan Project Area means an area in the hinterland east of the town of Tampakan, on the southern island of Mindanao,
Philippines, identified in Figure 9.1 as the remaining FTAA.
Tampakan Project Expenses means all obligations, liabilities, debt, expenses and costs incurred by WMCI or WMCP that relate
to the Tampakan Project from (and including) 31 May 2000 until Tampakan Completion or, if the
Second Sale and Purchase Agreement is terminated, the date WMCP withdraws from the Tampakan
Project or enters into an agreement with a third party for the transfer of its interest in WMCP, the
Columbio FTAA and/or the Tampakan Project.
Tampakan Project means the exploration, development, production and exploitation of mineral deposits within the
Tampakan Project Area by WMCP under the Columbio FTAA, the FTAA application held by
Hillcrest and any other current or future rights or applications held by or granted to WMCP or
Hillcrest to prospect, explore, develop or mine the whole or any part of the area of land situated
with the boundaries of the Columbio FTAA.
UN means the United Nations.
Underwriter means ABN AMRO Morgans Corporate Limited, ABN 32 010 539 607.
Underwriting Agreement means the Underwriting Agreement entered into between the Company and the Underwriter in
relation to this Offer as described in Section 12.6.
UNDP means United Nations Development Program.
Valmin Code means codes and guidelines for the assessment and valuation of mineral assets and Securities for
Independent Experts’ Report.
WMCE means WMC Exploration Corporation.
WMCI or WMC Resources
International Pty Ltd means WMC Resources International Pty Ltd ACN 006 679 081.
WMCP or WMC Philippines, Inc. means WMC Philippines, Inc. a company organised under the law of the Republic of the Philippines,
being a wholly-owned subsidiary of WMCI.
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14.2 Technical Terms
AAS Atomic Absorption Spectroscopy; assay
technique.
Acid Sulphate Epithermal mineralisation characterised by
sulphides and sulphate minerals.
Adit Horizontal underground, entrance tunnel.
Ag Chemical symbol for silver.
Alluvial Transported material commonly in a
stream. Gold in such material is
sometimes called a placer.
Alteration Mineralogical reconstitution of a rock by
hydrothermal fluids, as distinct from
atmospheric weathering.
Alunite A potassium-aluminum sulphate mineral,
characteristic of acid sulphate
hydrothermal alteration.
Amphibole A dark prismatic mineral of iron,
magnesium, calcium, aluminum, hydroxyl,
and silica.
Andesite A dark volcanic rock containing more
silica and sodium than basalt, and
characterized by iron-magnesium minerals
and plagioclase. It forms from the eruption
of molten lava or air-borne fragmental
material that solidifies on cooling. It is the
common rock formed in island arc
volcanoes like Mt. St. Helens. It is the near
surface volcanic equivalent of diorite.
Anhydrite Calcium sulphate mineral. May form from
low temperature alteration of massive
sulphide.
Anomaly An area above background levels,
particularly geochemistry.
Antiform A concave downwards fold, whose age
relations between the constituent rock
units are not known.The crest of the fold
lies above or at the horizontal.
Archean Geologic age > 2.5 billion years
Argillite Fined grained, muddy sediment.
Arsenopyrite Silver coloured, iron, arsenic sulphide
mineral. Commonly associated with and
containing invisible or very fine grained gold.
Artisanal workings Small scale gold mining by local people.
Au Chemical symbol for gold.
Auger Drilling technique and type of bit. A spiral
blade bit that penetrates and returns a
sample by a “cork-screw” action,
producing a poor quality sample for
resource estimation use. Designed for
inexpensive, shallow (0-20m) drilling in
soft material.
BAC Basic Acquisition Cost factor used in the
Geoscience Method of calculating early
stage exploration property values.
14. Glossary of Terms
Banded iron An iron-rich sedimentary rock, usually
containing bands of iron-rich formation
minerals and quartz. Can be very magnetic.
Basalt A dark volcanic rock high in iron and
magnesium. Generally forms from oceanic
volcanoes like in Hawaii.
Base metal Nonferrous metals such as copper, lead,
zinc, and nickel.
Basement The undifferentiated complex of rocks
that underlies the rocks of interest.
Bedrock Solid rock beneath the soil horizon.
BI A chemical symbol for Bismuth.
BIF Banded iron formation. Also known as
iron formation.
Black Shale Graphite or carbon-bearing marine
sediment deposited in oxygen-starved
water conditions.
BLEG Bulk Leach Extractable Gold. Gold assay
and sampling technique of large samples.
Breccia pipe Zone of rock fragmentation commonly
cemented by hydrothermal minerals
Calc-alkaline Group of magmatic rocks with weight
percent silica between 56 and 61 when
the weight % of CaO and of K2O +
Na2O) are equal. Includes some andesites
and basalts.
Caldera A circular volcanic depression.
Carbonaceous Graphite and carbon-bearing rock.
Chalcedonic silica Fine-grained version of quartz composed
of colloidal silica.
Chalcocite Copper sulphide of high copper content,
and leachable by solvent extraction
methods.
Chalcopyrite Copper iron sulphide, not leachable.
Channel sample A continuous sample over a set distance.
Chert A fine-grained version of quartz, similar to
chalcedony.
Chlorite A platy, hydrated iron, magnesium, silicate.
COG or cut-off grades means the minimum grade that can be
mined profitably from a deposit. Also used
as a minimum limit for resource estimates.
Colluvial A loose mass of soil and/or rock
fragments transported short distances by
mechanical surface processes.
Costean An excavation (trench) for the purpose of
sampling.
Craton Stable parts of the Earth’s crust not
deformed for long time. Usually made up
of Precambrian rocks.
Cretaceous Period of geological time: 66-131 million
years.
Cu Chemical symbol for copper.
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Cu-Au porphyry A copper and gold bearing hydrothermal Gabbro A dark coarse-grained magmatic rock
deposit either in or associated with composed of calcium plagioclase, and iron-
shallow, porphyritic intrusive rocks. Forms magnesian minerals.
stockwork veins or disseminated bodies,
Galena Lead sulphide.
usually of large size.
Garnet Calcium, iron, aluminum silicate. May form
Dacite Similar volcanic rock to andesite, but with
from altered limestone.
less calcium and more quartz.
Geochemistry The study of the distribution and amounts
Delineation drilling Drilling to establish the limits of
of elements in rocks and soils.
mineralisation.
Geophysics The study of the physics of the earth. In
Detachment fault A shallow thrust fault at the base of a
exploration magnetic, electrical,
regional slide block.
radiometric, and gravity properties are of
Diamond drilling Rock drilling with hollow, cylindrical interest.
diamond studded bits. A solid cylinder of
Gossan Massive sulphides converted to iron
rock is produced through the grinding
oxides by weathering.
action of the rotating bit.
Granite A coarse grained (visible) igneous rock
Diatreme A general term for a volcanic vent or pipe
composed dominantly of quartz and
drilled through enclosing rocks.
potassium feldspar.
Dilational jog Openings created at the bend in a fault by
Granodiorite A coarse grained intrusive granitic rock
the lateral movement of the two opposing
containing quartz, potassium and calcium
blocks.
feldspar.
Dilational openings Movement along fractures or faults that
Grassroots The earliest phase of mineral exploration.
creates space.
Grid-based Exploration carried out under the control
Diorite A dark coarse-grained intrusive rock
of a surveyed grid.
characterized by dark minerals, plagioclase
and some quartz.The deep-seated Greenstone belt Elongate zones in Precambrian cratons
equivalent of andesite. dominated by metabasaltic rocks.
Dip The angle or inclination that a surface Greywacke A dark grey sandstone with high levels of
makes to the horizontal. It is measured rock fragments and silt.
perpendicular to strike.
Hg Chemical symbol for mercury.
Disseminated A mineral of interest scattered throughout
a rock. High-grader Small scale local miner.

Eluvial A residual deposit of rock debris formed High sulphidation (See Acid Sulphate)
by decomposition during weathering. Hydrothermal breccia Rock fragmentation caused by the invasion
Enargite Copper-arsenic sulphide common in acid- of hydrothermal Breccia
sulphate mineralisation. Hydrothermal fluid A hot water of the Earth’s crust that
Epithermal A hydrothermal deposit formed within precipitates minerals.
one kilometre of the surface. Intrusive A body of magma injected subsurface into
FA Abbreviation for fire assay. Procedure for a pre-existing rock mass.
extraction of precious metals for analysis IP Abbreviation for the electrical geophysical
by heating in a furnace. method Induced Polarisation.
Facies Rocks formed under the same Island arc A curved chain of oceanic islands formed
temperature and pressure conditions. above a descending and melting oceanic
Fault A fracture or zone of fractures along plate. Commonly formed by andesite lava.
which there has been movement. ISO International Standards Organisation.
Earthquakes and seismic events are one
manifestation of faulting. Jasperoid Red to brown iron rich silica. Commonly
deposited by low temperature epithermal
Fire Assay Procedure for extraction of precious hydrothermal fluids.
metals for analysis by heating in a furnace.
Karst A dissolution cavity in limestone.
Fm. Abbreviation for Formation.
Km Kilometre.
Fold A curve or bend of a planar structure.
2
Km Square kilometre.
Formation A geological unit defined by rock type and
age position relative to other units. Landsat A satellite that collects and transmits to
receiving stations multispectral images of
Free-dig Open pit mining requiring no blasting the Earth’s surface.
g/t Abbreviation for grams per tonne. Lode A vein-like structure where fluids have
replaced the original rock, rather than
filling a dilatational opening.
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Longitudinal A projection at right angles to the strike
Projection of a mineralised zone.
Low sulphidation Epithermal mineralisation characterized by
quartz and associated epithermal
carbonate, potassium feldspar, and only
small amounts of sulphides.
Luzonite Copper-arsenic sulphide common in acid-
sulphate mineralisation. Named after the
Philippine Island of Luzon, because of the
common occurrence in the Philippines.
Maar A broad volcanic crater formed by shallow
eruptions.
Magma Naturally occurring mobile rock material
generated in the Earth that after injection
or eruption crystallizes into solid rock.
Magnetics Magnetic properties of the earth and its
rocks measured either from the air or on
the ground. Maps of magnetic intensity are
produced and used to interpret rock types
and geological structures.
Magnetite A magnetic oxide of iron.
Master structure A primary, and sometimes generative,
geologic structure.
Mesozoic Period of geological time: 66-245 million
years.
Metabasalt Metamorphosed basalt.
Metamorphic core A domed basement of recrystallized rock
above which the complex
cover rocks have slid on a thrust faults.
Metamorphosed Rocks that have undergone mineralogical,
chemical, and physical modification by
physical and chemical processes below the
zone of weathering.
Mineralisation The process by which minerals are
introduced into a rock. Also used to
describe a body of ore minerals, that is not
of economic value.
Mineral Endowment A measure past metal production and
current resources per unit area.
Miocene Period of geological time: 5-23.5 million
years.
Mo Chemical symbol for molybdenum.
Mt Million tonnes.
Mudstone Fine grained sedimentary rock composed
of hardened mud.
MVZ Magas Vein Zone.
Normal fault A fault of greater than 300 dip, whose
upper block moves down.
NSM Northern Sierra Madre Project.
Obduction The overriding of oceanic crust onto the
leading edge of an opposing plate.
Oligocene Period of geological time: 23.5-37 million
years.
14. Glossary of Terms
Openpit An excavation where bulk surface mining
has taken place.
Opencut see openpit.
Ophiolite Oceanic mafic to ultramafic rocks altered
by seawater.
Ore shoot A three dimensional body of ore minerals.
Outcrop An area of rock exposed at the surface.
Ozs Troy ounces, a measure of precious metals.
Paleocene Period of geological time: 58-66 million
years.
Paleoplacer An older than recent alluvial deposit of
potentially economic minerals.
Pb Chemical symbol for lead.
Pegmatite Very coarse magmatic rock, commonly
granite, that crystallize from late magmatic
fluids.
PEM Prospectivity Enhancement Multiplier. A
factor that values past exploration
expenditure in the Multiple of Exploration
Expenditure Method of estimating mineral
property values.
Photogeology The optical study of aerial photos to
derive geological information.
Pillow basalt Basalt, in rounded, droplet-like shapes, that
formed through rapid cooling under water.
Plate Either oceanic or continental blocks that
form the surface of the Earth and move by
plate tectonic forces.
Plate tectonics The movement of the Earth’s surface
plates with the creation of new oceanic
material at spreading centres and the
destruction of plate material in subduction
zones beneath island arcs.
Platinum group Precious metal elements including
platinum, palladium, iridium, and osmium.
Pliocene Period of geological time: 1.8-5 million
years.
Plunge The inclination of a linear geologic
structures measures in a vertical plane.
Porphyritic A magmatic rock texture where larger
crystals sit in a matrix of finer grains.
Porphyry A porphyritic textured magmatic rock,
commonly intrusive in origin.
Porphyry deposit A hydrothermal deposit consisting of
stockwork veins or disseminated
sulphides. Commonly associated with
porphyritic rocks.
PPB Parts per billion. A chemical quantity.
PPM Parts per million. A chemical quantity.
Precambrian General geologic age > 600 million years.
Pressure shadow Areas at the end of an elliptical structure
which are protected form deformation.
Pyrite An iron sulphide; FeS2.
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Pyroclastic A fragmental volcanic rock formed by Sericite Fine grained potassium mica.
eruptive processes.
Serpentine A dark fibrous silicate mineral common in
Pyroclastic flow Mass movement of pyroclastic material ultramafic rocks and skarns.
down the flank of a volcano.
Shear A tabular zone of rock that has been
Pyrrhotite An iron sulphide, sometimes magnetic. crushed and broken by numerous fructose
formed in response to shear strain.
Quaternary cover Young (recent-1.8 million years), usually
unconsolidated material, covering geology Sheath fold Steep plunging, secondary, small scale folds
of interest. on larger folds, that display strong
penetrative deformation with a
Radarsat Satellite generated radar images of the
pronounced single, stretching lineation
Earth’s surface used to produce geological
parallel to the fold axis.
maps in areas covered by thick vegetation
of clouds. Sheeted veins A group of sub-parallel, steep veins.
Radiometrics The radioactive properties of rocks Silica Silicon dioxide.
measured commonly from an aircraft. High
Silicified Hydrothermal alteration producing fine-
levels may reflect zones of hydrothermal
grained silica.
alteration, particularly radioactive
potassium. Siltstone A fine-grained sediment with particle sizes
between sandstone and mudstone.
RC drilling A type of percussion drilling. Samples pass
through the inside of the drill rods to Skarn A body of calcium-rich silicate and
reduce contamination as the rock material carbonate minerals formed by the
passes up the drill hole and exit through a alteration of carbonate-bearing rocks of
cyclonic orifice. any type.
Reconnaissance A general exploratory survey of an area. Small scale miners Local artisanal miners.
Regolith The zone of weathered rock, including Soil sample A sample of soil material used for
surficial deposits. geochemical analysis.
Remote sensing The collection of data without physical Sphalerite Zinc sulphide.
contact with the subject. Commonly the
recording of photographic and spectral Splay Branch of a fault.
data of the Earth’s surface from an aircraft Sq Square as in square kilometres.
or satellite.
Stockwork An interlocking network of planar or
Resource Definition Drilling at an appropriate density in which irregular veinlets.
Drilling mineral resource estimates can be
established. Stream catchment Stream source area.

RL Relative level. Stream sediment A geochemical sample of stream bed sand

and silt sample
RP-Japan A series of joint reconnaissance geological
projects during the 1980s and early 1990s Strike length The length of a geologic structure along
between the Republic of the Philippines its strike.
and the Government of Japan.The
Strike The direction or trend of a geologic
programs were designed to identify large
surface measured in a horizontal plane. It
areas prospective for further exploration.
is perpendicular to dip.
Sandstone A sandy sedimentary rock made up of
Strike-slip fault A fault whose blocks move horizontally or
quartz and feldspar grains.
parallel to strike.
Saprolite A clay rock with original rock textures
Sulphides Metallic sulphur minerals.
preserved. Formed in the lower parts of a
lateritic weathering profile during tropical Superporphyries A colloquial term for very large and
weathering. medium grade porphyry Cu-Au deposits.
Scapolite A chlorine-bearing rock in skarns or SXEW Solvent extraction Electrowin, a methord
metamorphosed carbonate rocks. for processing ores.
Scree Deposits of loose rock fragments, that Tectonics The study of the large-scale deformation
form sheets draping the sides of hills.They of the Earth’s surface.
form from the mechanical breakdown
Thrust A fault of less than 300 inclination whose
during weathering of surface outcrops and
upper block moves up.
slow mass creep down slope.
Tonnes (t) A unit of measure equal to 1000kg
Sediment Rock and mineral particles that are either
mechanically transported and deposited by Transform fault A strike slip faults whose displacement
the action of air, water, and ice, or that is suddenly stops or changes form.
chemically precipitated.
Tremolite A prismatic iron, magnesian amphibole.

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14. Glossary of Terms

Trench An excavation for the purpose of sampling
and exposing bedrock.
Tuff Consolidated fragmental volcanics rocks
formed in an explosive, usually airborne
manner.
Ultramafic A rock composed mainly of dark minerals.
Unconformably When the boundary between two
adjacent rock units or strata represents a
time gap caused either by non-deposition
or erosion.
Vein The tabular or sheet-like filling by
hydrothermal minerals of a fracture or
fault.
Veinlets Narrow veins.
VMS See Volcanogenic Massive Sulphide
Volcanic arc An elongate zone or belt of volcanic
rocks.
Volcanism The process of producing magma and its
gases, and its transport and expulsion on
the Earth’s surface.
Volcanogenic Zn, Pb, and Cu rich sulphide bodies in
massive sulphide volcanic rocks and sediments. Hellyer,
Rosebury and Woodlawn are examples.
Wacke A dirty, clay-rich sandstone. Synonymous
with greywacke.
Wallrock The zone of rock around a vein or
mineral deposit.
Wallrock alteration The zone of hydrothermal alteration
around a vein or mineral deposit.
Zn Chemical symbol for zinc.

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