approached by investors seeking joint venture, page-11

Indochine Mining raises $3.4 million, door open for cornerstone investor
Tuesday, April 01, 2014 by Proactive Investors

Indochine Mining (ASX/POMSoX: IDC) has completed a smaller equity raising of $3.4 million, keeping the door open to take in a cornerstone investor for the Mt Kare Gold-Silver project in Papua New Guinea.

A total of 38.3 million shares were placed at $0.09 per share for $3.4 million to new and existing investors, which is impressive given the last traded share price was $0.077, a premium of 16.8%.

The raising was supported by major shareholders and new investors and will enable further cornerstone investment with potential partners to advance.

Indochine is advancing the Development Drive at Mt Kare to access +10g/t gold high grade zones for a bulk sampling program heading toward Feasibility Studies and a mining lease application.

Indochine said it has also been approached by potential investors seeking joint-venture investment in the Mt Kare Project as well as undertaking a cornerstone placement in Indochine.

While the discussions are ongoing and at present negotiations are inconclusive, Indochine elected to raise less funds than previously advised to retain sufficient equity capacity to allow this investment to occur.

The funds raised will assist in advancing Indochine towards a Decision to Mine milestone which would facilitate mine development finance discussions.

Indochine's Mt Kare Gold-silver Project in Papua New Guinea is not short of gold with a 2.5 million ounce Au eq. resource.

Significantly, a number of PNG Landowner Groups have also participated in the placement with these shares to be quoted on the Port Moresby Stock Exchange (POMSoX). This investment by Landowner Groups marks a significant local vote of confidence in the Mt Kare Project.



Decision to mine

The next key milestone will be a decision to mine in mid 2014, by completing the underground adit to directly access the high grade zones, completing the feasibility study and applying for a mining lease.

Then the company can complete discussions with debt and equity providers for a $100M financing of the construction of the mine aiming for production in mid-late 2015.

This will also open the company up to investors and debt providers as the company finalises the finance package for the construction of the mine through to production.

An Adit/Tunnel - with direct access to high grade ore; with high ounces per vertical metre will enables rapid low cost drilling; bulk sampling; to prove mine plan/grades for finance.



Analysis

Today's raising opens the door for a cornerstone investor at either project level or in Indochine.

There are likely to be very few new gold mines brought into production globally in the next 12-18 months; let alone a project resource likely to be circa 1,000,000 ounces grading a whopping 10 grams per tonne gold.

Next door Porgera is one.

There is potential to substantially increase mineable ounces and grade <$100 million CAPEX is targeted at half the cost of PFS in 2012. Indochine is on track to rapidly develop high-grade, low cost underground mine.

All-in-sustaining costs are likely to be among the lowest in the world based on the high grade, providing strong after tax cash flows.

Mine life could run 15-20 years or more based on Porgera next door's profile which has the same geological setting as Mt Kare.

Proactive Investors has provided an initial estimate of valuation of Indochine based on our calculations of the high grade zone production and likely operating costs and projected cash flows as well as near term catalysts and milestones ahead.

The current share price has risen 13.2% since Proactive Investors provided an initial valuation guidance and price target of $0.10 - $0.15 and forward target is $0.32 - $0.55 within 12 - 18 months.



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