Ann: Inca Signs Exclusive Earn-in Option with South32, page-22

Fellow long suffering ICG shareholders .... at last some potentially great news. the following are reasons why I think that this could be a turning point for the company and one that has the potential to take us forward at a rapid rate of knots.

First we are getting at no cost a much needed exploration outcome, which is project wide geophysics. For giving S32 the option to move to Phase 1 (60%) - obviously subject to a positive outcome from the planned geophys - we are going to get some immediate exploration. In addition, this geophys exploration was needed at any rate, especially for getting a handle on the southern part of the project area (Alteration Ridge and Uchpanga) where there are potential ore bodies that lend themselves to geophys!

Second, in the event (and obviously hope) that this initial geophys work is positive, then we could potential move to the Phase 1 stage where S32 takes a 60% share of the project and is responsible for sole funding all exploration. Clearly, whilst this principle agreement is good for ICG, the devil will be in the detail as the quantum of Phase 1 exploration is still an unknown and will no doubt be guided by the results of the initial geophys work. Still - a good outcome as it means that ICG's exploration costs as the project goes forward are significantly reduced.

Third, if exploration is successful and it looks like there are economic deposit(s) on the Riqueza project ground, then ICG would be carried free up to a PFS stage, for only reducing its share by a further 10%. So we could be in a position where, on the completion of a PFS, ICG still had a 30% carried interest in what we would all hope could be a significant resource. For a junior - which is cash strapped and with a large exploration program requirement, this is a really good outcome.

Fourth, the exploration will be managed by ICG. Juniors are generally leaner and better at doing exploration than the majors and by having responsibility for the exploration, it also means that ICG has some say in the pace and nature of the exploration and it will not be put on the "back-burner" because it does not fit within the overall priorities of a major.

Fifth, it would seem that Cerro Rayas is not part of this deal and that ICG will maintain 100% of this project and will be able to use its own cash to drive this project forward as well.

So, for me, a very positive and pleasing outcome - not the least because (subject to positive geophys results) we have a major as a potential JV partner and potentially a large exploration budget, but because it seriously eases the pressure on the company's financial resources, reduces the need for future CR's - at least in the short term if they move to Phase 1 with S32, and gives shareholders some confidence that the level and extent of exploration needed (to demonstrate whether the potential of the project is as good as we hope and think) will happen and at a much quicker pace than if ICG was to progress this alone.

This could be the start of the turn around that we have all been waiting for. The other good news is that there will be some early decision points as the geophys work will happen quickly and if S32 is to proceed to the Phase 1 exploration stage then a decision on that will also be made within a couple of months.