QUARTERLY REPORT

QUARTERLY REPORT: Three months ending 31 March 2007

HIGHLIGHTS

MAJOR POINTS

Cibaliung Gold Project - Indonesia

• Construction of the gold processing plant by PT Petrosea Tbk was approximately 80% complete by the end of the quarter. At the request of the Company, Petrosea demobilised from site during the quarter pending finalisation of additional financial facilities to complete the development of the project. Work will recommence following the confirmation of finance facilities;
• The Decline Development Contract was terminated at the initiative of the Company. The decline contractor extracted the Roadheader and demobilised from site at its own cost. The original decline was closed and will not be utilised in the new mining plan currently being finalised by the Company;
• Drill and Blast testing was undertaken to verify the suitability of this methodology for the development of a decline in the ground conditions typically encountered at Cibaliung. The Drill and Blast test work was successful and decline development was undertaken during the quarter by the Company’s trained mining staff;
• Major works on site were placed on hold in order to conserve cash while both funding arrangements and the new mining plan were advanced. The preparation of a new mining plan was commenced to reflect the development of a new decline by drill and blast and the completion of the project development;
• The new mining plan has identified further increases in capital expenditure and increases in the life of mine operating costs. Details of these increases will be released once a revised Base Case Financial Model has been finalised.
• The Company agreed non-binding indicative terms and conditions in respect of a Convertible Note Facility to raise US$20 million (with provision for oversubscriptions up to a further US$5 million). The Company also announced that it had successfully undertaken a placement of 344 million ordinary fully paid shares in the Company at 1.5 cents per share to raise A$5.16 million.

• Surface work, mapping and prospecting continued at both the Trenggalek and Pekalongan projects during the quarter;
• A 4000 m drilling program testing for porphyry targets was completed at the Aisasjur Project in Papua in which ARX holds a 20% joint venture interest. Anglo is currently evaluating the results with the view of planning a more extensive follow-up drilling program.
  

Expenditure

Total exploration and development expenditure in Indonesia during the quarter amounted to A$13 million.

CIBALIUNG GOLD PROJECT - INDONESIA (89.75% as at 31 Dec 2005)

The Cibaliung Gold Project is operated by PT. Cibaliung Sumberdaya, a joint venture company established between the Company and PT. Antam Tbk (“Antam”).

Cibaliung is located in Banten Province near the western tip of the island of Java, 150km south west of Jakarta. The Company’s interest in the Cibaliung Project as at 31 December 2005 stood at 89.75%.

Site Development and Erection of Gold Processing Plant

At the date of this report the status of the project development is summarised as follows:

• Site access roads and bridges have been essentially completed;
• Re-erection of the gold processing plant on site has been 80% completed;
• Installation of CIL tanks and Thickener Tank are 90% complete;
• Installation of the Cyanide mixing is 80% complete;
• SAG Mill installation has commenced and bearing plates have been installed;
• Foundations for crusher 80% complete;
• All Generating Sets for the Power Plant have been installed in preparation for commissioning and connection;
• Elution Circuit and Gold Room Plant are currently all on site ready for installation;
• Tailings Dam construction survey and earthworks have commenced but are on hold.

Major works on site were placed on hold during the quarter in order to conserve cash while both funding arrangements and a new mining plane were advanced.

Decline Development

The Company has previously reported the difficulties associated with the development of the decline which ultimately led, at the initiative of the Company, to the termination of the Decline Development Contract during the quarter. The decline contractor extracted the Roadheader from the decline and demobilised from site at its own cost. During the quarter the Company also resolved not to pursue the development of this original decline and advised that the previously targeted first gold pour of May 2007 would not be achieved.

Drill and Blast testing was undertaken to verify the suitability of this methodology for the development of a decline to access the ore body in the ground conditions typically encountered at Cibaliung. The Drill and Blast test work was successful and a new mining plan is currently being finalised on the basis that a new decline will be developed in this manner.

Discussions with an alternate contractor are being finalised on the basis that this company will provide experienced personnel to supervise the Company’s own trained miners who will be responsible for the development of the decline.

Delays in the development of the decline have already had a significant cost impact on the project particularly in relation to holding costs and costs associated with a deferred first gold pour date. The Company is continuing its analysis of the likely cost impact and further guidance will be released to the market when some certainty is achieved in this regard. The Company’s primary technical objective remains the development of a new mining plan which will achieve access to the ore bodies at the earliest opportunity. The new mining plan will also address the technical issues associated with the completion of the project development.

Following the success of the Drill and Blast test work the Company’s own trained mining personnel commenced the development of a new decline. At the date of this report the Company team has successfully developed the new decline to 90 metres without incident.

Capital Expenditure and Funding

During the course of 2006 the Company reported details of capital cost increases in the order of US$18.5 million primarily due an initial underestimate of costs associated with the re-erection of the gold processing plant and related matters. The new mining plan has identified additional increases in capital expenditure and the project is continuing to experience significant cost pressures, including finance and holding costs, requiring additional debt and additional equity finance to complete the development of the Cibaliung Gold Project.

A primary debt facility of US$26 million provided by ANZ was fully drawn by the end of 2006. A further cost overrun facility of US$ 2 million is expected to be drawn upon in the near future to enable limited development work to continue at Cibaliung. In addition ANZ has provided an offer for an additional debt facility in the amount of US$5 million which is expected to be drawn in due course subject to satisfaction of relevant conditions precedent.

In December 2006 the Company arranged a Bridging Facility in the amount of US$5 million which was provided by PT Austindo Nusantara Jaya, AuSelect Limited, Mr. Hermani Soeprapto (Chief Operating Officer) and Mr. John Carlile (Non-Executive Director). This facility was fully drawn during the quarter.

During the quarter the Company announced that Austock Corporate Finance Limited had successfully undertaken a placement of 344.0 million ordinary fully paid shares in the Company at 1.5 cents per share to raise A$5.16 million.

To date the funds from this placement have been primarily utilised for ongoing working capital and costs, including holding costs, associated with the development of the Cibaliung Gold Project. The placement was made to institutional and sophisticated investors and was been structured as follows:

• Tranche 1 - which was completed during the quarter comprised of 193.1 million shares placed using the balance of the Company’s 15% placement capacity, raising A$ 2.90 million; and
• Tranche 2 - comprised of 150.9 million shares to be placed subject to approval at a general meeting of shareholders to be held on Friday 27 April 2007 to raise A$2.26 million.

On 5 March 2007 the Company advised that it had agreed non-binding indicative terms and conditions in respect of a Convertible Note Facility to raise US$20 million (with provision for oversubscriptions up to a further US$5 million) with South East Asian Strategic Assets Fund (“SEASAF”) and its advisor CIMB-Standard Strategic Advisors Pte Ltd of Singapore in co-operation with Austock Corporate Finance Limited. At the date of this report discussions are continuing as to the final amount of this facility which may increase to an amount in excess of the amounts referred to above.

Funds raised pursuant to this facility will primarily be applied to the completion of the Cibaliung Gold Project. In accordance with the Term Sheet agreed with SEASAF the Convertible Notes have a five year term and are convertible into ordinary fully paid shares (at the option of the holder) at any time. The Conversion Price is US$0.017090 per share.

Draw down of the Convertible Note Facility is subject to the successful finalisation of formal documentation and the satisfaction of a number of conditions precedent, including, but not limited to, shareholder approval and the preparation of a new engineering/mining plan covering for the decline development, steps to be taken to the start of ore extraction and methodology required to ramp-up to full production. The Company is aiming to satisfy all of the relevant conditions precedent so that draw down of these convertible notes may occur following shareholder approval at the Company’s Annual General Meeting on 31 May 2007. Completion of the project is contingent upon draw down of this facility on or about this date. If this funding is not available to the Company on or about this date the Board of the Company will be required to consider its ability to continue with the development of the Cibaliung Gold Project.

During the quarter the Company closed out its June 2007 gold hedging commitment at no cost to the Company. As a result the Company currently has a balance of 171,708 ounces of gold hedged on a fixed flat (par) forward basis at a price US$651/oz. Subject to the finalisation of the new mining plan and a revised Base Case Financial Model these hedging arrangements will require restructuring. At this stage the Company proposes to close out its September and December 2007 hedging commitments.

Further details in relation to project costs and funding arrangements for the Cibaliung Gold Project will be provided as details are finalised.

Expenditure

Expenditure in relation to development of the Cibaliung Gold Project totalled A$12.7 million during the quarter.

Cibaliung Exploration

The Cibaliung exploration team was largely focussed on reviewing geotechnical aspects of the mine development and also contributed to the revision of the Cibaliung Mine Plan during the quarter.

No significant exploration work was undertaken other than a small MMI soil geochemical survey extended off the southeastern side of the Ramada Prospect during the quarter. This survey, consisting of 107 samples taken at 10-m intervals along four east-west oriented 50-m spaced gridlines, investigated the potential bedrock source of high-grade vein float shedding from the base of younger conglomeratic cover rocks in this area. It was previously reported that grab samples of this float returned gold assays of up to 30 ppm Au.

Results of the soil survey highlighted a low-level gold anomaly, ranging from 0.5 to 1.4 ppb Au, located over the general area of cover rocks shedding the mineralised vein float. This now requires follow-up trenching to expose the potential bedrock source, which will done in the next quarter.

Expenditure

Expenditure in relation to Cibaliung Exploration totalled A$ 74,952.

PROJECT GENERATION - INDONESIA

Total Expenditure for exploration completed on the Trenggalek and Pekalongan projects totalled
A$ 117,590 during the quarter.

Trenggalek Project, East Java (ARX - 95%)

The Trenggalek KP exploration area in East Java covers 17,586 ha.

Mapping and prospecting were continued on this tenement during the quarter whilst awaiting a permit from the Department of Forestry to undertake more extensive surface disturbance activities, such as trenching and scout diamond drilling, on the key prospect areas, most of which lie within forestry production areas.

Additional high-grade gold results were obtained from new samples of banded chalcedony-quartz float found between 0.5 and 2 km north of the Paces Prospect. Three angular float samples of between 20 and 30 cm diameter returned 9.4, 14 and 19.3 ppm Au respectively with relatively low silver and base metals but elevated arsenic, antimony and mercury. Large quartz breccia boulders (up to 1-2 m diameter) and possible subcrops containing angular fragments of banded chalcedony-quartz were also identified through prospecting in the general area of this mineralised float late in the quarter. These will be mapped and sampled in detail during the next quarter to confirm whether a source of the highgrade float has been identified.

Mapping was completed on the Jati Prospect, located about 1.5 km southeast of Paces, and has defined a roughly circular area of about 1.2 km diameter containing large residual boulders and subcrops of polymictic breccia showing pervasive replacement by variably sulphidic microcrystalline quartz and clays. This rock type is interpreted to be hydrothermal eruption breccia and contains low gold but locally anomalous arsenic, antimony and mercury geochemistry in rock chip samples, including up to 220 ppm As, 19 ppm Sb and 2.48 ppm Hg. A cobble of banded chalcedony-quartz float found in soil on the northern edge of the area containing the polymictic breccia boulders returned 8.8 ppm Au; this result highlights potential for a mineralised vein system located either beneath or peripheral to a shallow hydrothermal breccia pipe. The prospect will be further evaluated by soil geochemical sampling to better define the margins of this interpreted pipe in the next quarter.

Mapping and sampling were commenced at the Kojan Prospect, located about 1.5 km southwest of Paces. In this area, a swarm of at least six subparallel quartz-chalcedony breccia veins was previously identified by Antam. These veins were thought to be generally (<0.5 - 2 m wide) and have defined strike-lengths of about 100 m to greater than 500 m. Early results received from recent selective chip sampling on some of these veins has confirmed the presence of locally significant gold and silver mineralisation, with three particular samples registering 10.1, 13.5 and 28.6 ppm Au and 209, 424 and 932 ppm Ag, respectively. Limited drilling of only one of the veins in the swarm was previously done by Antam. This program comprised three diamond holes and the results proved to be inconclusive due to poor collar positioning and probably low core recoveries.

Pekalongan Project, Central Java (ARX - 95%)

The Pekalongan KP exploration area in Central Java covers 5,618 ha.

Fieldwork continued at a significantly reduced level during the quarter due to the shift of work priorities to the other projects.

At the Kuning prospect, a trench was completed on the Dasto structure, which is one of three mineralised west-northwest trending fracture-fault zones identified on this prospect. The trench exposed oxidised, fractured and silicified porphyritic andesite almost throughout its length, returning 47 m at 0.9 g/t Au and 28 g/t Ag and including 8 m at 2.8 g/t Au and 45 g/t Ag from continuous-chip samples. This intersection is located about 50 m east of an earlier trench that returned 9-m at 2.6 g/t Au and 13 g/t Ag within a similarly broad zone of lower grade mineralisation.

Plans for further detailed trenching on this prospect must await a permit from the Department of Forestry because it lies within a forestry production area.

The presence of relatively broad zones of low-grade gold-silver-lead mineralisation associated with diffuse quartz stockwork at the Kuning Prospect suggests a possible association with a deeper mineralised porphyry intrusion. The geochemical zoning patterns within and surrounding the Kuning Prospect will be further investigated from the existing database in the next quarter to test the validity of this model and the potential for porphyry-related deposits in the KP exploration area.

Papua

Aisasjur Project - Anglo Strategic Alliance (ARX - 20%)

The Company has a strategic alliance with the Anglo American Group (Anglo) to explore for large copper/gold porphyry deposits in Papua. The Company has a 20% joint venture interest in the Aisasjur Project while Anglo has the obligation to fund all exploration activities pursuant to the terms of the strategic alliance.

The Aisasjur Project covers an area of 9,486 hectares in the Kepala Burung area of West Papua Province. Geologically, the project area lies within one of Indonesia’s young Tertiary volcanoplutonic arcs and is prospective for both porphyry copper-gold and epithermal gold mineralisation styles.

Anglo has reported results of diamond drilling completed on the Aisasjur Prospect early in the quarter. Eight holes (ASD-01 to ASD-25) were drilled in the program for a total of 3,347.9 m but more detailed information on the drill-hole details and locations is awaited. Sampling and assaying were done at 1 to 3 m sample intervals on half-core. The weighted average intercepts reported in the following table of best intercepts were calculated by Anglo at a 0.1 g/t Au cut-off.

Of primary interest was the intersection in ASD-23 of deep low-grade copper-gold mineralisation associated with broad zones of replacement silicification and diffuse quartz + chalcedony + pyrite + arsenopyrite + chalcopyrite stockwork in metasedimentary rock and a blind porphyry intrusion. This hole returned encouraging intercepts of up to 26 m at 0.21% Cu and 0.25 g/t Au from 539 m downhole returned in metasedimentary rock, and 33 m at 0.06% Cu and 0.18 g/t Au from 568 m down-hole in the intrusion. Furthermore, regular low-grade copper-gold intercepts were also returned in other parts of the drill-hole, starting from 230 m down-hole, and also ended in significant gold mineralisation with an intercept of 10 m at 1.38 g/t Au from 753 m down-hole.

It appears that only a few of the holes were actually completed to the originally planned depths. Technical difficulties associated with the light-weight and depth capacity of the man-portable rig, and the presence of karstic limestone, meant that some of the other holes were abandoned well short of their respective planned depths.

Anglo is currently evaluating the results with the view of planning a more extensive follow-up drilling program.

The information in this report that relates to Exploration Results is based on information compiled by Mr. Brad Wake, who is a member of the Australian Institute of Geoscientists. Mr. Wake has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.’ Mr. Wake consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

ABOUT AUSTINDO RESOURCES CORPORATION NL (ARX)

Formed in 1983, Austindo Resources Corporation NL is an Australian listed gold company focused on developing projects in Indonesia. The company's key project is Cibaliung, a high-grade epithermal gold/silver vein system located southwest of Jakarta in Banten Province, western Java. Cibaliung is expected to produce at an annual rate of 70,000 oz (gold equivalent) with an average life of mine cash operating costs of approximately US$200 per ounce.

Two key strategic alliances in Indonesia are taking Austindo closer to achieving its growth objective. In association with Anglo American Group, the Company is exploring for large porphyry copper/gold deposits in Papua. In addition the Company has a 95% joint venture interest with PT Sumber Mineral Nusantara in the Pekalongan and Trenggalek tenements located in Central and East Java respectively, areas prospective for low sulphidation epithermal gold/silver deposits similar to the Cibaliung project.

Rule 5.3

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