inl's fall from grace...., page-3

The AGM opening address tells it all.................
The 2008-2009 financial year, was an extremely difficult period for Intec. As described in the financial statements of the 2009 Annual Report, Intec incurred a loss after tax of $20.7 million,
incorporating impairments of $11.6 million and an operating loss of $9.1 million.
The key cause of Intec’s negative financial outcomes was the accelerated downturn during 2008 in international metals prices, notably zinc and lead, resulting in Intec’s mineral-producing operation at Hellyer becoming cash-negative and being forced to close in September 2008.
With the perfect storm of the Hellyer closure and its being placed on care and maintenance, frozen debt and equity markets, and the unfortunate maturity date of Intec’s working capital facility falling due on 31-12-2008, we were then forced to sell the Hellyer operations in extremely difficult market conditions. The eventual sale to Bass Metals for $10 million - half of which is a deferred royalty
payment – resulted in both a write-down of that asset value to the sale price, and in operating losses as the shut-down and maintenance expenses were paid in the months during and following the closure. The Company was also forced to sell its 23% interest in Bass Metals in order to maintain prudent cash balances.
The sale of the Hellyer operations impacted the company’s proposed strategy for the treatment of EAF dust stockpiles. The Board therefore took the prudent decision to write down the value of Intec’s environmental bonds for the storage of its feedstock stockpiles from $4.4 million to zero.
The Company continues to investigate all options for either disposal or treatment of these stockpiles.
During 2009 Intec’s cash flows were affected by a bad debt from Sardinia Gold, which was written off in our 2009 accounts and the placement of Compass Resources in administration. Thankfully the $140,000 owed by Compass has been recovered in full but the considerable delay in that payment did place pressure on our cash flow position.
Since balance date and as advised to the market, Intec’s primary waste client ACL has also entered administration and receivership and $240,000 it owes our Company is not expected to be recovered.
However, Intec is proceeding with further work for ACL, but now on the basis that the receiver will be held responsible for all charges so the payment is assured.
Intec’s response to the serious challenges facing the company was twofold. We took the necessary steps of realising as much asset value as was possible under adverse conditions, and we took drastic and considerable measures to cut our expenditures to the maximum extent possible, even at the expense of some of our operational capabilities. It is notable that all of Intec’s staff, directors and key consultants took a voluntary 15% pay cut across the board from the beginning of 2009, and there were no changes made during the 2009 annual performance review.
Overall, Intec’s operating expenditure has now been reduced by more than 50% through improved efficiency, pay cuts, staff downsizing and reduced site expenditures.
However, we are now pleased that the signs now point to Intec having turned a corner, and we thank all of our shareholders, staff and industry stakeholders for their support throughout the very difficult period that has passed. Intec’s share price has stabilised, and we are looking to the future, and anticpate the recovery and growth of our company from here.
One of Intec’s key advantages is its adaptability. We have a very strong technology base which can be carried forward in a multitude of ways, and one of Intec’s strongest responses to the global financial crisis was to bring forward and implement a second, parallel strategy for the commercial utilisation of the Intec Process technology via the recycling of metal-bearing inorganic waste materials.