bank of japan to continue more money printing, page-3

Hey Ophir

In all my NPV calcs for small gold explorers I'm using a conservative $1,750-$2,250/Oz Gold Price. Even at these price levels the future profits of these small cap gold explorers are going to be very strong. Anything higher, is a BONUS! But the way all these Central Banks are pump priming the world economy with printed cash, it could spike higher than the prices below.

One advantage new gold producers have, think PNA, they are mining in virgin territory, therefore the gold is shallow, in most cases, but importantly it is very high grade. They are not digging/mining 800m-1000m from the surface for low grade gold ore as is happening with these 20-40 year old gold mines. This ensures we have very low cash costs and excellent profit margin.

This is why I'm so excited by IndoChine's Mt Kare. For me two cross section maps tell the story and potential of this company.

The high grade drilling below. These gold/silver intercepts are incredible! Very shallow and very rich.

The second cross section was in their update last week.

It shows that the drilling that was conducted by Buffalo and Madison, above, only drilled down 350metres. The drill holes finished in gold at the bottom of the hole. And only a 1km strike or length of the deposit has been drilled. We know from previous announcements by Buffalo that they had conducted a IP survey with a light plane to look for any other shallow gold on Mt Kare. They found that the gold anomaly stretched for 6kms.....

Yet, if we look at all the other gold mines in PNG they travel down 1000m!

In the chart below, IDC is comparing the 30million ounce Porgera sister mine to our own Mt Kare, and it clearly shows the potential of Mt Kare and why the big multi billion investment companies are our cornerstone investors.

In terms of IndoChine Management Performance.

Have a look at their achievements since listing on the ASX only 15 months ago and make your own decision.

1.Took over extensively explored tenement from administrators where 365 drill holes, $60m and 10 years had been spent drilling up a Canadian NI43-101 resource for next to nothing ($27million) in March 2011.

2.Converted and released an Australian JORC Resource of 2.1million ounces gold, where 30% of this resource is Indicated JORC.

3. They have $10million in cash, have prepaid for choppers drilling lab work to cover the period after the PFS is completed in August 2012

4. Ensuring the landowner have been taken care of by giving them $4m in cash during the initial transaction, as well as shares in IDC. The landowners own 19% of IndoChine Mining. They ARE THE MAJOR SHAREHOLDER and are keen to get to mine into production.

5. IndoChine has built up a team of experienced engineers, project managers and geologists that have all worked on other large (Barrick's Porgera, Hidden Valley) mines!
They know what they need to do to get this mine into production! Because they have done it all before in PNG. The Management has extensive mining and finance experience
which is crucial to bringing mines to life!

6. They are close to announcing a report about the PFS, should be out mid March 2012 as well as the first drilling results that they are duplicating or twinning from previous high grade drill holes that Buffalo drilled. They know exactly where the gold is because all the drilling work has been done for them.

Have a look at the previous drilling map below. The blue dots represent the high grade drilling results that Buffalo conducted.

Now have a look at IndoChine's drilling, they are only targeting the high grade areas, green dots in the coloured areas. They are 1. maximising the gold results for announcements using the cash they have, instead of drilling blind in a greenfield location and hoping for the best, and 2. they are drilling using a large diametre drill to work out the metallurgy of Mt Kare and how to best target the high grade gold and design and build the gold mine around this area.

7. They are planning on completing the PFS by August 2012 and BFS by the December 2012/January 2013.

Now ask yourself how many other small cap explorers that have achieved these same company making milestone events like IndoChine has?

Most explorers take 5-6 years to slowly build up a find a resource that is economically viable to be mined and build up a JORC resource. In most cases this resource would only be inferred, and would take another 2 years to lift it into Indicated and Measured JORC category, then begin working on a PFS, then BFS then commence the mine construction.

IndoChine will have achieved completion of the Bankable Feasibility Study by December2012/January 2013, just over 2 years since listing. An incredible achievement by anyone's standards for mineral exploration.

IndoChine has had some delays in announcing their initial JORC and now the PFS Report is 2 weeks late. But I think you will find almost every explorer on the ASX and TSX are missing key dates for announcements due to the fact that labs/engineers/geos are working at 100% capacity to satisfy the demand for the current exploration boom.

There is a global rush to find enough dirt to satisfy China now and in 30 years when they are twice the size of the US, and soon India, then Indonesia, Brazil then Africa etc etc!

Cheers Nectar