Interview Transcript

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Robust Resources Limited (ASX code: ROL) has over recent months announced significant drilling results from its Romang Island Gold-Silver and Base Metals projects in Indonesia. Can you summarise the results of the program so far including the extent of the drilling, the depth and the major results?

MD Gary Lewis

Since Robust began drilling on November 8 we have announced the completion of 27 holes and the assay results from 23 of those holes. These holes are on the Batu Mas and Batu Hitam prospects within the Lakuwahi Caldera Project in the southern one third of Romang Island. Nearly all of the 23 holes from which assay results have been received have defined wide intersections of gold, silver, lead or zinc at commercial grades, with the mineralisation being close to the surface and open in most directions and at depth.

For example at Batu Mas we have intersected 33 metres in hole LWD 20 grading 1.45 grams per tonne gold and 111 grams per tonne silver. This equates to a gold-equivalent grade of 3.3 grams per tonne, commencing at a depth of only 18 metres from surface; a very positive situation for mining.

At Batu Hitam on the western side of the caldera, the mineralised zone is thicker and also very near-surface. For example hole LWD 27 intersected a gold-equivalent grade of 2.2 grams per tonne over 50 metres right from surface. Batu Hitam is also revealing that there are higher grade zones in the system; for example the recent ASX release of results from hole LWD 36 which intersected grades of up to 20.71 g/t gold-equivalent over 1.5 metres.

Robust has also carried out metallurgical tests on gold and silver samples from Batu Mas and Batu Hitam confirming exceptionally good recovery rates averaging 94% for gold and 95% for silver. These figures indicate that near surface Lakuwahi gold and silver will be free milling, with the precious metals easily recovered with low cost treatment.

Significantly, we have also confirmed the very large scale (some 13 square kilometres) of the Lakuwahi mineralisation potential by remodelling geophysical data from earlier exploration. The excellent drilling results announced so far have tested less than 1% of this area leaving more than 99% to be drill tested.

Lakuwahi has been our prime target because it was drill ready from previous exploration when we acquired our interest in Romang Island. Preliminary exploration has commenced in the Solat Caldera which forms the northern two thirds of the island and Robust has recently reported strong evidence for the existence of at least one gold rich multi-commodity porphyry system there. The Solat Caldera will be our next drilling target after our new third drilling rig completes some deep drilling at Lakuwahi.

When Robust first considered acquiring the Romang assets, Agricola Mining Consultants advised us in their independent geologists’ report that the project had significant potential for the discovery of both very large base-metal gold breccia hosted deposits and exhalative volcanogenic massive sulphide base metal and precious metal deposits. Nothing from our exploration results in this relatively early stage of our exploration has caused us to question this advice. Every step in our exploration program has been a very encouraging step in the right direction.

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What are the dimensions of the mineralisation that you have defined so far at the Lakuwahi prospect in the south of Romang Island? In which directions does it remain open? What areas of significant precious and base metals have you discovered?

MD Gary Lewis

As already stated, less than 1% of the mineralised system of approximately 12 to 13 square kilometres at Lakuwahi has been drill tested to date. All drilling is open to the north, south-east and west, and at depth. The Robust drilling has been relatively shallow, averaging probably about 80 metres and ranging down to about 150 metres for the deepest holes, so the mineralisation potential at depth is almost completely untested. In nearly all of the holes drilled we have discovered potentially commercial grades of gold, silver, lead and zinc, together with some copper and barite.

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Can you explain how Robust acquired the asset? What amount of money had been invested in previous exploration? What exploration data did you inherit?

MD Gary Lewis

In February 2008 Robust negotiated a two-stage agreement to acquire up to 75% of the mineral titles which cover the entire area of Romang Island from PT Gemala Borneo Utama, which has been actively involved in the Indonesian mining industry for more than 20 years. We were required to spend $1.5 million on exploration to earn a 51% interest, and a further $3 million for another 24%, taking equity to 75%. I am pleased to report that we have earned our 51% interest in June 2009, and forecast earning-in to 75% by the end of the 2010 financial year.

Both Ashton Mining and Billiton (now BHP Billiton) conducted exploration programs on the island previously.

Ashton completed an exploration program including diamond drilling and channel sampling on the northern two thirds of the island, the Solat Caldera area, between 1988 and 1992. The limited data available from the work indicated a highly prospective area for gold and copper.

Billiton spent US$3 million on exploration of the Lakuwahi Caldera area in 1998-99. This included geological, geochemical and geophysical programs, culminating in a 14 hole diamond drilling program in which 12 holes intersected economically significant gold / silver / zinc / lead and copper mineralisation. It was Robust’s good fortune that when BHP and Billiton merged in 2002, Romang Island was considered a non-core asset and it was sold. Robust has acquired the data from Billiton’s initial exploration and that enabled us to plan our very successful first phase drilling program.

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Can you give some detail on the geology of your permits on the Island and the evidence for other potential prospects throughout the permits? Can you compare the geology with other world mineral provinces?

MD Gary Lewis

Romang is a volcanic island located within the Sunda - Banda Magmatic Arc. This geological mega-structure hosts some of the world’s best ore bodies such as Newmont’s huge Batu Hijau mine and Freeport’s giant Grasberg deposit. Significant new discoveries have been made along the Arc; like Intrepid Mining’s Tujuh Bukit project – recently joint ventured to Vale and the Martabe Gold Project recently sold to China Sci-Tech for US$217 million. It is not necessary to compare the setting of Romang Island to other world mineral provinces as the Sunda-Banda Arc itself hosts some of the world’s best deposits.

Romang Island is roughly the same size as Lihir Island in PNG and like Lihir, the gold and silver mineralisation is hosted within extinct volcanic calderas. The southern caldera, Lakuwahi, shows geological, geochemical and geophysical evidence for a large hydrothermal alteration system at least 6 kilometres by 4 kilometres. Robust’s successful drilling program has only tested a small fraction of the potential there for gold, silver, lead, zinc and copper.

The Solat Caldera in the north is a forthcoming focus for the Company. The Ashton work in the 1980s is now shown to be targeted on high-grade silver-lead-gold veins peripheral to a large porphyry system. Our recent geophysical modelling coupled with field traverses has unlocked the potential of the porphyry system and work is underway to do the basic exploration work prior to the selection of drill targets. Robust has purchased a third, larger diamond drill to deep-test these porphyry targets.

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What is the significance of the metallurgical tests which indicate that the Lakuwahi Caldera gold recovery will average 94%?

MD Gary Lewis

Robust has carried out metallurgical tests at the Batu Hitam and Batu Mas prospects which returned an average gold recovery rate of 94%, ranging from 88% to 98% and an average silver recovery rate of 95%, ranging from 90% to 100%.

These are exceptionally good figures. They indicate that the near surface Lakuwahi ore is free milling and that it will not require expensive treatment options such as flotation and pressure oxidation. They tell us that the treatment of Lakuwahi ores will be low cost, allowing the profitable mining and treatment of low grade ores.

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Can you explain the evidence for your belief that there is large porphyry potential in the north of Romang Island? You’ve reported gold values in veins of up to 12.3 g/t and copper rich veining of up to 6.1% from grab samples. How reliable are grab samples as indicators of grade?

MD Gary Lewis

Robust has found strong evidence for the existence of at least one gold-rich multi-commodity porphyry system in the Solat Caldera which makes up the northern two thirds of the island.

Solat is approximately two to two and a half times larger in area than the Lakuwahi Caldera and also appears to be older and more highly eroded than Lakuwahi. It is a distinctly different geological setting to Lakuwahi.

The evidence for the porphyry system is in the coincidence of a magnetic low with a large potassium radiometric anomaly, both of which are also coincident with a distinct natural vegetation anomaly. The coastal expression of these anomalies is an outcrop of about two kilometres of altered quartz at Dedern Bay in the far north of the island where channel and grab samples have returned values of up to 12.3g/t gold, 6.1% copper, 6.86% lead, 15.8% zinc and 142g/t silver.

Grab samples are not confirmation of grade. They are indicators of potential grade which can only be confirmed by drilling. Grab sampling is a low cost process to assist in identifying drilling targets.

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What is the capital structure and funding position of the Company? What major expenditures do you expect?

MD Gary Lewis

The very strong share market interest in Robust has put us in a strong financial position to fund our accelerating exploration program.

In the June quarter we raised a total of $3.88 million by the placement of 5.4 million shares at 25c each to sophisticated investors and a further placement of 7.2 million shares at 35c a share to Talbot Group Investments of Brisbane. The Talbot Group, which is one of Australia’s major privately owned mining houses, is now our biggest shareholder with 14.8% of the 48.7 million Robust shares on issue.

With this new funding the Company’s cash and receivables balance at 6 July was $4.27 million. This ensures that we are fully funded to complete our current exploration projects on all tenements. Furthermore, we anticipate that our other major shareholder, Trafford Resources, will exercise its 3.6 million unlisted options in November 2009, which will generate an additional $1.04 million in cash.

We have an aggressive exploration budget for the 2010 financial year of more than $3 million. In addition we have also budgeted for two additional diamond-drilling rigs, which will bring the total to four company-owed rigs by March 2010, and further accelerate our programme.

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The Talbot Group recently took a 15% shareholding in Robust. What induced the Talbot Group to invest at such a relatively early phase of the exploration cycle?

MD Gary Lewis

The key attraction of Robust to the Talbot Group was the Romang Island project itself. They recognised the highly prospective nature of Indonesia generally and the Sunda - Banda Magmatic Arc in particular, and see Romang Island as a potential world-class asset. Couple this with our tight capital structure, competent management and technical team and aggressive and positive approach to exploration activity, and it makes Robust a compelling investment, whatever the phase of development.

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Robust recently appointed John Levings as Technical Director. Can you outline the experience of your management team and Board?

MD Gary Lewis

John Levings’s recent appointment to the Board brings very wide experience of both mineral exploration and mine development in Australia and South East Asia. During a 30 year career he has worked in discovery, development, operational and other technical roles in the gold, base metals and nickel mining industries in both regions.

Most importantly for Robust he has extensive experience of the minerals industry in Indonesia, as founding partner and director of the successful Jakarta-based mineral consultancy MRA Consultants from 1987 – 2006. John also speaks fluent Bahasa Indonesian and has an innate understanding of the unique cultural, social and community issues that can often be overlooked, particularly by smaller exploration companies.

We also have a strong exploration presence on the Board through Ian Finch, an eminent geolologist who has been our Chairman since we floated, and in Shane Sadleir, a geologist who was appointed to the Board last year. Between them Ian and Shane have decades of experience in hands-on mineral exploration and as directors of well known and successful junior mining companies.

As Managing Director of Robust I bring corporate finance and management skills to the Board. My qualifications are a Bachelor of Commerce and a Masters in Business and Technology and have I worked for many years in senior management and advisory positions with a number of Australian public and private companies. We run Robust first and foremost as a business, which has allowed us to outperform most of our listed small cap exploration peers, and we have never raised money below par value.

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What are your exploration plans for the next year?

MD Gary Lewis

We are accelerating and extending the exploration program with the employment of a third, Company-owned diamond drilling rig which is about to be site tested on Romang Island. The new rig has a capacity to drill to approximately 500-550 metres and will initially be drilling deeper targets in the Lakuwahi Caldera. On completion of those targets it will be moved north to begin drilling the Solat porphyry targets. The two smaller rigs will continue operating at Batu Hitam.

We are also ramping up geophysical and geochemical exploration where it is required and strengthening the administration and labor force both in Jakarta and on Romang Island.

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In summary, what strategic approach will you take to adding value to Romang and your other assets over the next couple of years?

MD Gary Lewis

With Romang we have bought into a multi-commodity mineral prospect which, on the advice of our independent geologists’ report, has enormous upside potential. Exploration to date is showing that we have a strong and truly exciting project.

For a junior company to turn that potential into healthy returns for our investors we have to start, as we have, with a tight capital structure. We have to maximise the impact of every cent we spend. We have to conduct a technically excellent exploration project. We have to employ the right people and we have to attract investors who believe in what we are doing. We also have to work constantly at communicating our aims, our potential and our successes to the market.

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Thank you Gary.