4c qrtly, page-28

Hi Maddock,

I'm late in getting to answer your query regarding Intec's share price potential could be in the short term and longer term earnings as I thought others would give it a go. As you said;

"1. GB Galvansing Pickle Liquor

Processed 5,000 litres, another 25,000 in process (or in store) and another 20,000 litres to come (for intial trial of 50,000 litres). Producing iron oxide, zinc, gypsum. How much and what is it worth?

The next stage (if phase 2 works) is expected to process (at least) 1,000,000 litres per annum (for a capex cost of $2.85m). Would be interesting to understand cashflow projections based on baseline commodity prices. I'm not sure even how to work out a ballpark figure for this (can anyone else help)."

Well be warned I am biased as far as this company is concerned but here goes.

It will be great to get Zeehan and the EAF dust out of the way but that will bring in only Peanuts. Anglo Gold, Brown's Sulphide etc will be great if they eventuate but are too far off to think about.

The spent pickle liquor project GBG is the one to focus upon. You ask;

How much and what is it worth?

Truth of the matter is no one knows. My guess is that no one will ever know due to confidential agreements but it will be a great money maker in the future if, and when, the process is proven.

Why is this so and how close is it to being proven?

The case for WHY. The 1000000 litres in Victoria is chicken sheet when it comes to the world production of pickle liquor. Forget China even though Green Resources has agreements and China has a lot of pickle liquor. I just don't like their business ethics. Think of the United States, Japan, Europe and even Brazil and Russia where millions and millions of litres are generated by the galvanising industry every year. Currently the liquor has to be dumped and depending on the country the cost will vary considerably. Victoria currently prohibits the dumping of Category A waste. South Australia charges $566 per tonne. Before any dumping the liquor has to be stabilised at a considerable cost and bulk the volume from one tonne to 2.3 tonnes. Then add transportation costs. Replacement Hydrochloric Acid for the galvanising baths is not cheap either. Dump a 1000 litres and you need to buy a 1000 litres to stay in business. It is all money, money, money.

If the Intec process is proven then there will be no waste and the benefit of the process generating by-products.

Is it proven? Not to Intec's satisfaction as far as Patent lodgement specifics. That Intec has lodged a protective provisional patent is an indication that they are working on refining certain procedures to make the more efficient cost wise. The fact is that they have successfully trialled the process and have achieved much of their stated aim. Read the ASX release of 23rd Dec where it is quoted;
(To date, the trials have successfully produced specified iron oxide, zinc metal,gypsum and regenerated hydrochloric acid products.)

Unfortunately Intec has missed some deadlines and so it is the case with this revolutionary process. Evidently they are determined to get the process not only workable and correct but truly economically efficient before they lodge the Final Patent. Intec has given itself to the end of the current quarter to finalise the spent pickle liquor research and publish its findings.

Cheers.