INDIA RESOURCES : Quarterly Activities and Cashflow Report 30 June 2016

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India Resources Limited ("India Resources", "IRL" or "the Company") is pleased to present this quarterly activities report.‌‌

Arvind Misra Managing Director‌‌

India Resources Limited QUARTERLY ACTIVITIES REPORT

For the quarter ended 30 June 2016

HIGHLIGHTS

Surda Mine - Copper

• Copper ore processed for the June 2016 quarter was 77,128 tonnes at 0.84% Cu to produce copper metal in concentrate (MIC) of 590 tonnes (equivalent mined).

• Both tonnes processed and MIC tonnes produced were below the previous quarter, due to industrial action and lengthy delays in payments from Hindustan Copper Limited (HCL), the mine owner. These matters have now been resolved.

  Project Development

• Shaft sinking at the Surda Mine Expansion and Development project (SEPC project) achieved 3.9 metres in the June 2016 quarter and has, after statutory checks, been granted approval by the Directorate General of Mines Safety (DGMS) to commence sinking below 60m.

• All development advances composed of drives, raises and cross-cuts of the SEPC project totalled 83.5 metres for the June 2016 quarter.

  Aravalli Project

• Crown Mining Private Limited (CMPL), a wholly owned subsidiary of India Resources Limited (IRL), has submitted its reply to the Government of Rajasthan (GOR) mining office at Rajsamand seeking a new order to submit the application fee for the agreed area of 17.29 km² not the original 24 km² area. The GOR has not yet responded to the submission.

• CMPL is continuing to contest in the tribunal court, Revision Authority, Ministry of Mines, New Delhi a revision petition filed by Hindustan Zinc Limited (HZL). The GOR has not yet filed its reply. The Revision Authority has instructed GOR to maintain the status quo until the matter is heard by the Revision Authority.

  Corporate

• The appeal against the Indian Tax Office's assessment against Swan Gold Mining Limited (renamed Eastern Goldfields Limited) for the 2012/13 financial year was successful. The 2010/11 financial year was not appealed by the Tax Office and so is now complete, meaning that the 2010/11, 2011/12 and 2012/13 years are completed. Steps are being taken to expedite the tax refund for 2012/13 financial year.

• Compliance requirements in India for registration of the change of name of Swan Gold Mining Limited to Eastern Goldfields are almost complete.

• Meetings were held at the Prime Minister's Office and Minister level to seek a determination on the Company's pending claims with Hindustan Copper Limited (HCL). Although commitment has been shown by these officials, progress remains slow.

  OPERATIONS REPORT Surda Project

  Copper production for the June 2016 quarter amounted to 590 tonnes of copper metal in concentrate (equivalent mined).

  Safety

  During the June 2016 quarter, one lost time injury (LTI) and one medical treatment injury (MTI) occurred at the Surda mine. Altogether, there were 14 first aid treatments, a significant improvement on the previous quarter. See below table and graphs.

  June 2016 quarter

  Type of Injury	Mine	Plant
  Lost Time Injury (LTI)	1	0
  Medical Treatment Injury (MTI)	1	0
  First Aid Treatments	12	2

  Graph Showing Lost Time Injuries Frequency Rate at Surda Mine

  160

  140

  120

  100

  80

  60

  40

  20

  0

  First Aid Treated Injuries

  Mine Plant

  Overa ll

  2013-2014 2014-2015 2015-2016

  Graph Showing First Aid Injuries at Surda Mine

  Production

  The tonnes and grade mined and processed in the June 2016 quarter were below the March quarter. Mining was hampered by industrial action and reduced material supplies for the mining purpose as a result of payment delays and disputes with HCL. Dewatering of the Surda mine was blocked by the industrial action causing flooding of level 11 and hampering mining of Shaft 3's level 11 stopes. Mining returned to normal in the second half of July 2016.

  Quarterly Production	31 March 2016	30 Jun 2016
  Ore Mined (Tonnes)	94,331	76,846
  Ore Processed (Tonnes)	95,127	77,128
  Mill Feed Grade (Cu)	0.86%	0.84%
  Concentrate Produced (Tonnes)	2,965	2,310
  Concentrate Grade (Cu)	24.96%	25.51%
  Recovery	93.00%	92.81%
  Metal in Concentrate (Tonnes) - Equivalent Mined	742	590
  Metal in Concentrate (Tonnes) - Dispatched	748	601

  Surda Expansion Project

  The Surda Expansion contract achieved 83.5 metres for the June 2016 quarter, (this is less than March 2016 quarter of 95.9 metres because of industrial action by the work force) of horizontal driving, raising and cross-cutting and 3.9m of Shaft sinking (Shaft 5), for the June 2016 quarter. Highlights are as follows:

  • Footwall lode reached and driving and raising commenced Shaft 4, Level 10.

  • Shaft 3, Level 12, small loader (cavo) installed, temporary shoot fixed, driving commencing in earnest and a high grade lode intersected.

  • Statutory inspections of Shaft 5 for sinking below 60m complete and approval granted by Directorate General of Mines Safety (DGMS)

    Next quarter:

  • High speed shaft sinking is expected to commence in the next quarter at the Surda, Shaft 5

  • Drive development north and south at Shaft 3, Level 12.

  • Drive and raising at Shaft 4, Level 10.

Shaft 5: Photo taken from Shaft 3

Shaft 5: Photo taken at Shaft 5 collar looking down at the lined 7m diameter shaft

BUSINESS DEVELOPMENT

Rakha development project

HCL has cancelled the Letter of Intent (LOI) awarding the Rakha development project to the IRL- KOPEX consortium because of HCL inability to obtain the necessary approvals for its mining lease. IRL has written to the Indian Ministry of Mines stating that such a unilateral cancellation of a LOI is not transparent as the consortium of Kopex Shaft Sinking Company and IRL had no role in the statutory approvals.

EXPLORATION ACTIVITIES

Aravalli (Base Metals)

IRL's cornerstone exploration prospect is the Aravalli lead-zinc-silver project. Crown Mining Private Limited (CMPL) a wholly owned subsidiary of IRL, has replied to the Rajsamand Mining Office, Rajasthan's request to consider only the agreed 17.29 km2 not the original 24 km2 area for its application fee deposit for the Aravalli mining license (the deposits are at a rate of 5Lak/km2 Indian rupees or ($10,000AUD/km2). As yet no reply has been received by CMPL.

At the request of the Geological Survey of India (GSI) Rajsamand office a submission was made showing a table of drill holes of GSI boreholes and CMPL boreholes used in CMPL's submission for the Aravalli project.

Bhandara and Dharwar (Diamonds)

Letters were submitted to the Directors of Mines in Odisha and Andhra Pradesh States for the grant of outstanding prospecting licenses, PL's 410 and 306 and 309.

FINANCE

• Copper production at the Surda mine was below target for the quarter due primarily to an illegal strike by mine workers. However, the mine is now back to operating at normal rates of production.

• To date, the support of the Group's work force and creditors is being managed and maintained. Cash flow and working capital limitations have required the continued goodwill from all stakeholders to sustain the business.

• The Surda Expansion Project is expected to achieve clearances in the first week of August 2016, which will allow costs to reduce and shaft sinking revenue to begin in the September 2016 quarter.

• Axis Bank continues to provide temporary overdrafts of 10M INR ($0.20M). Discussions are continuing to replace the temporary overdraft facility with an overdraft for the Surda Expansion Project.

• Discussions continued with potential investors in India, Australia, the United States and the United Kingdom for funding for the development of the Aravalli project.

• Procedures have commenced with the Indian Tax Department for the tax refunds on previous assessments for Eastern Goldfields Limited for the 2012/13 financial year. It is expected that the refunds for tax deducted at source for IRL will be available by the end of this year.

  LEGAL AND ARBITRATION CASES

• IRL secured a Kolkata High Court order against HCL restraining HCL from arbitrary deductions from sales invoices for copper deliveries. This was later negotiated with HCL and the proceedings were withdrawn.

• An arbitration notice was served on HCL to seek a determination on a number of pending issues. This notice was withdrawn on a without prejudice basis as HCL agreed to IRL's participation in resolving the outstanding issues through an Independent Expert Monitor.