STREET ADDRESS Unit 17, Level 2 100 Railway Rad Subiac, Western Australia 6008 POSTAL ADDRESS PO Bx 8129 Subiac East 6008 CONTACT DETAILS Tel: +61 (0)8 9380 9920 Fax: +61 (0)8 9381 5064 inf@indusenergy.cm.au BOARD & MANAGEMENT Mr Jhn (Gus) Simpsn Nn-Executive Chairman Mr Anthny Milewski Managing Directr Mr Jnathan Whyte Nn-Executive Directr & Cmpany Secretary Mr Ken Bull Chief Operating Officer ABN 22 009 171 046 ASX CODE IND 24 August 2016 Cmpanies Annuncement Office Via Electrnic Ldgement INDUS EXECUTES OPTION AGREEMENT TO ACQUIRE IMD GOLD MINES HIGHLIGHTS Indus enters ptin agreement t acquire 100% f IMD Gld Mines Limited (IMD Gld). IMD Gld is securing a prtfli f gld prjects in WA with a fcus n early gld prductin: Battler, British Hill and Parker Dme Gld Prjects being acquired by IMD Gld under a binding agreement with Black Oak Minerals Limited; Andrmeda, Bradbents and Jacksn gld prjects nrth f Suthern Crss under ptin frm WA Prspectrs Pty Ltd (WAP); and Agreement with WAP t acquire wnership f the Marda Gld Prject. DMP Applicatin ldged fr Battler t cmmence 22,000z Au p.a. prductin by pen pit. A strategic milling agreement with an existing gld peratin is well advanced. The Marda Gld Prject represents a secnd near term gld prductin pprtunity. All prjects demnstrate significant reginal explratin ptential. These prjects have the ptential t transfrm Indus int a significant gld prducer. Indus Energy NL (Indus r Cmpany) is pleased t advise that it has entered an ptin agreement with Western Australia based public unlisted gld mining cmpany IMD Gld Mines Ltd (IMD Gld). Upn cmpletin, the acquisitin f IMD Gld wuld represent a prpsed change f activities fr Indus frm il and gas t gld with the aim f creating a new ASX listed gld prducer with a plan t develp and expand further prductin ready assets in the near future. Under the ptin agreement bth Indus and IMD Gld will cnduct legal and technical due diligence and Indus has the right fr a perid f 30 days, subject t the terms f the ptin agreement, t initiate the acquisitin f IMD Gld and prceed t a binding sale and purchase agreement as required t implement the transactin. BATTLER, BRITISH HILL and PARKER DOME GOLD PROJECTS (W.A) The Battler, British Hill and Parker Dme gld prjects cmprise a package f 12 tenements, including three granted mining leases and ne mining lease applicatin at Battler and ne granted mining lease at British Hill, cvering a ttal area f 59 km 2, and lcated in the Suthern Crss Gldfield f Western Australia. The Battler prject, lcated 15km suth f Suthern Crss, includes three mining leases which are fully permitted and ready t cmmence pen pit prductin f up t 22,000 unces f gld p.a., subject t W.A Department f Mines and Petrleum (DMP) final apprval. IMD Gld is currently negtiating a strategic alliance with the wners f a gld re treatment plant in reasnably clse prximity t Battler fr an re sales and milling arrangement. The depsit als has significant drill supprted high grade undergrund ptential dwn dip.
The British Hill prject, situated 65km suth f Battler, cnsists f three miscellaneus licenses and a granted mining lease with gld mineralisatin that IMD Gld views as having ptential fr the discvery f a majr re depsit and als prspective, in the shrt term, t be a surce f selectively pen pit mined high grade re fr transprt t the tll treatment plant. The Parker Dme prjects cnsist f tw explratin licenses situated 25-40km sutheast f the Marvel Lch gld mine and aligned alng a dmain-bunding fault structure that appears t be an extensin f the Fraser Shear Zne. The Fraser Shear Zne, which extends suth-easterly ver mre than 100km thrugh Suthern Crss, and takes its name frm the histric Frasers gld mine, plays hst t arund 5,000,000 unces f histrical gld prductin including 1,700,000 unces at Marvel Lch. Previus sampling and drilling has shwn psitive results that warrant immediate fllwed up. IMD Gld has entered int an asset acquisitin agreement with Black Oak Minerals Limited (ASX:BOK) (In Liquidatin)(Receivers and Managers Appinted) t acquire the Battler, British Hill and Parker Dme prjects fr cnsideratin f A$2,000,000, payable by 30 September 2016, and a further 12 payments f A$250,000 payable quarterly frm steady state prductin fllwed by a 2% net smelter ryalty. IMD Gld, with the assistance f Indus, is currently in advanced discussins t finalise the upfrnt cnsideratin f A$2,000,000 t cmplete the acquisitin f these prjects by IMD Gld. In accrdance with ASX requirements, Indus will nt directly prvide any lan funds. ANDROMEDA, BROADBENTS AND JACKSON GOLD PROJECTS The Andrmeda, Bradbents and Jacksn gld prjects are situated in the Marda-Diemals greenstne belt between 100km and 180km nrth f Suthern Crss. The prjects are secured under granted prspecting licences and a mining lease applicatin held by Mr. Vernn Strange and/r his cmpany WA Prspectrs Pty Ltd (WAP). Mr. Strange has had a lifetime f invlvement in prspecting, mining and drilling in the Suthern Crss-Marda-Diemals area, and is currently recvering alluvial and eluvial gld frm his Bradbents prspect using WAP s prprietary mbile, mechanised bulk dryblwer gravity plant. He is als a crnerstne investr in IMD Gld. In cntrast t the mre readily accessible and highly gld prductive greenstne belts in the Archaean Yilgarn Blck f Western Australia, the Marda-Diemals greenstne belt is remte due t the lack f a highway traversing it and cnsequently is relatively under-explred. The Cmpany and IMD Gld believes that it has similar ptential t the ther well explred WA greenstne belts fr the discvery f large Archaean lde gld depsits, and that there are specific areas in the Marda-Diemals greenstne belt which have high ptential fr such discvery. The pririty target is a 50km lng, nrth trending Marda Gld Crridr which passes thrugh the histric Mt Jacksn Mining Centre near the western edge f the belt; and a well-recgnised, majr nrtheast-trending fault zne knwn as the Evanstn Shear Zne. The Andrmeda and Jacksn gld prjects ccur within the Marda Gld Crridr, and the Bradbents gld prject ccurs n the Evanstn Shear Zne. Andrmeda refers t a blind gld discvery drilled n 100m centres ver a strike length f +300m (pen t the nrth) and t a depth f 130m belw surface (pen) under a reginally extensive gld in sil anmaly. Bth Mr. Strange and WAP hld extensive areas under explratin licences at this prject site. The Jacksn prspect typifies sme f the mre recent gld discveries within the s called Marda Gld Crridr in that an explratin target (the Wayabeen Shear Target ) has been prgressively revealed by metal detecting and nugget and specimen stne gld discveries. A recent specimen stne find apprximately 50m dwn slpe frm the Wayabeen shear zne prduced 30 unces f gld when prcessed and ther specimens taken directly ff the quartz filled shear zne prduced 12 unces n prcessing. WAP, the hlder f a 185ha prspecting licence ver the area, describes the Wayabeen Shear Target as having fur majr alluvial gld runs flwing ut frm the shear/ridgeline ver a 1km strike length which have prduced apprximately 700 unces f specimen and nuggets t date. There has been n drilling n the shear zne.
Bradbents is ne f Mr. Strange s mst prductive alluvial/eluvial gld prspects prviding cnsistent returns with his mbile bulk dry-blwer gravity plant. The surce f the gld is nt readily apparent, althugh there are sme ld shafts in an area f highly weathered and gssanus banded irn frmatins which excite interest in testing by drilling. Mr. Strange and WAP have prvided IMD Gld a 3 mnths free ptin n each f the Andrmeda, Jacksn and Bradbents prjects t purchase any r all f them fr a refund f the csts invlved in securing and maintaining the mining tenements and a 2% ryalty n all re mined r prcessed frm any f the Prjects r any replacement mining tenements cvering them. During the 3 mnths ptin perid IMD Gld can negtiate an additinal cash payment in the purchase price t reduce the ryalty t 1.5% shuld it wish t d s. MARDA GOLD PROJECT The Marda Gld Prject, a very large package f mining tenements lcated abut 150 km nrth f Suthern Crss, is currently being administered by the receivers and managers f Black Oak Minerals Limited (In Liquidatin)(Receivers and Managers Appinted) and ffered fr sale. Since 2013 Black Oak has reprted the Marda Prject as having the ptential t be develped as a standalne peratin with a mdest initial capital cst, its predecessr Suthern Crss Gldfields Ltd (SXG) having acquired a used gld treatment plant t be relcated fr the purpse. The cre Marda tenements cver an area f 1,102 km 2. Extensive studies have previusly been cmpleted n the prspects fr a viable gld prject indicating the ptential fr multiple pen pit mining peratins n the tenements, which the Cmpany culd cnsider as part f its explratin activities as well as cnsidering ptins fr any milling peratins required. Thrugh an initiative t prtect its interests in its dealings with Black Oak, WAP ldged applicatins fr frfeiture ver cre Marda tenements n becming aware Black Oak had appinted receivers. This has led t IMD Gld, thrugh WAP, having the pprtunity t succeed with an apprpriate bid fr the Marda Prject as WAP s nminee. Negtiatins are nging; but it is expected that the acquisitin f IMD Gld by Indus will materially assist IMD Gld t succeed. T this end, IMD Gld, with the assistance f Indus, is currently reviewing funding ptins with several institutins t cmplete the acquisitin f the Marda prjects. FIGURE 1: MAP OF KEY PROJECT AREAS
KEY TERMS OF THE ACQUISITION Cnsideratin Subject t Indus exercising its right t acquire IMD Gld, in cnsideratin fr acquisitin f 100% f the issued capital f IMD Gld by Indus, at cmpletin Indus will issue t the IMD Gld sharehlders (r their nminees) such number f Indus Shares as represents 50% f the capital f Indus at cmpletin (currently 157,453,599 shares) Cnditins Precedent The acquisitin is subject t the fllwing cnditins being satisfied: a) Indus and the sharehlders f IMD Gld entering int a binding sale and purchase agreement; b) Indus and IMD Gld satisfactrily cmpleting legal and technical due diligence; c) $2m funding secured by IMD Gld t cmplete the Battler, British Hill and Parker Dme prjects acquisitin; d) Indus being satisfied arund IMD Gld s binding right t acquire the Marda Gld Prjects; e) IMD Gld executing an exclusive ptin agreement ver the Evanstn, Andrmeda and Bradbent Prjects; f) IMD Gld nt issuing any further shares ther than as part f a cnvertible lan t finance the acquisitin f the Battler, British Hill and Parker Dme prjects. g) Indus and IMD Gld btaining all requisite apprvals, including frm sharehlders, and in accrdance with the Crpratins Act, the ASX, its Cnstitutin and therwise cmplying with the ASX Listing Rules h) ASX prviding cnditinal apprval t the reinstatement f Indus n ASX fllwing recmpliance with Chapters 1 and 2 f the ASX Listing Rules. Re-cmpliance with Chapters 1 and 2 f the ASX Listing Rules The prpsed acquisitin will result in a change in the Cmpany s nature and scale f its activities and will require sharehlder apprval under Chapter 11 f the ASX Listing Rules as well as requiring the Cmpany t re-cmply with Chapters 1 and 2 f the ASX Listing Rules and btaining cnditinal apprval frm ASX t have its securities re-admitted t trading. Detailed infrmatin abut the transactin will be set ut in the ntice f meeting sent t sharehlders, shuld the ptin be exercised. The Cmpany s securities will remain suspended frm qutatin pending re-cmpliance with Chapters 1 and 2 f the ASX Listing Rules.
Bard and Management Changes Shuld the acquisitin cmplete, tw Indus directrs wuld step dwn and IMD Gld wuld have the right t nminate fur new directrs t the bard f the Cmpany. Thse directrs have nt currently been cnfirmed. Fr further infrmatin please call ur ffice n (08) 9380 9920. Yurs Sincerely Anthny Milewski Directr