Slide 1: First Quarter 2019 Results Presentation
INDEPENDENCE GROUP NL First Quarter 2019 Results Presentation Growth Projects Advanced and Major Contracts Committed 29 October 2018 ASX:IGO / ADR:IIDY 1
Slide 2: Cautionary Statements & Disclaimer
Cautionary Statements & Disclaimer • This presentation has been prepared by Independence Group NL (“IGO”) (ABN 46 092 786 304). It should not be considered as an offer or invitation to subscribe for or purchase any securities in IGO or as an inducement to make an offer or invitation with respect to
Slide 3: Our winning aspiration
Our winning aspiration is “To be a globally relevant, premium supplier of energy storage and distribution materials” With on focus on “High quality, long life assets that deliver great financial outcomes” 3
Slide 4: 1Q19 Highlights
1Q19 Highlights Underlying Free Cash Flow A$82M • Net cash increased to A$62M • Nova and Tropicana deliver metal production within guidance ─ Reduced by-product credits, higher fuel price and non recurring costs, impacted Nova cash costs • Strategic contracts executed ─ Nova solar farm ─ Barminco un
Slide 5: Safety & Sustainability
Safety & Sustainability 2018 ACSI Rating of ASX200 Sustainability Reporting(5) Key Lag Safety Metrics(1,2,4) (Leading rating in each of last three years 8.0 7.0 6.0 LTIFR 12 MMA Leading MTIFR 12 MMA 5.0 Detailed 4.0 3.0 Moderate 2.0 1.0 Basic 0.0 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-
Slide 6: Financial Results
Financial Results Balance strengthened and debt reduced Units 4Q18 1Q19 QoQ Revenue and Other Income A$M 243.1 167.4 -31% Underlying EBITDA(1) A$M 131.5 62.9 -52% Profit After Tax A$M 40.3 0.2 -100% Net Cash from Operating Activities A$M 74.2 108.1 46% Underlying Free Cash Flow(2) A$M 41.2 82.2 100%
Slide 7: 1Q19 Cash Flow Reconciliation
1Q19 Cash Flow Reconciliation 27% increase in cash on hand whilst retiring debt and paying disciplined dividends AUD M 250 2 18 19 12 6 200 29 12 71 150 A$91M cash flow 100 from operating activities 176 139 50 - Cash at Nova FCF Tropicana FCF Long FCF Exploration & BD Sale of Royalty Corporate & Rep
Slide 8: Nova
Nova Metal production on guidance Tonnes Nova Production Metric Units 4Q18 1Q19 Guidance(1) 8,000 7,344 6,854 7,000 Nickel in concentrate t 7,344 6,854 6,750 – 7,500 5,961 6,000 Copper in concentrate t 3,230 3,019 2,750 – 3,125 5,000 4,454 4,000 Cobalt in concentrate t 251 245 213 – 238 3,230 3,019
Slide 9: Nova
Nova Cash costs impacted QoQ by non recurring costs and reduced by-product credits A$/lb 3.00 External Internal 0.16 2.50 0.18 0.14 0.39 2.00 0.11 1.50 2.78 2.30 1.00 1.79 0.50 0.00 Diesel price (net of Notional By-products Ni Volume variance Notional By-products Costs hedge) (Price) (Volume) 4Q18 1
Slide 10: Nova Solar Farm
Nova Solar Farm • Agreement with Zenith Energy to build 12.5GWh solar farm • First fully integrated commercial hybrid diesel/solar PV facility in Australia • Includes state-of-the-art PV modules, single axis tracking, inverters, communications and control system technology • Construction to commence
Slide 11: Nova Mining Contract
Nova Mining Contract • Barminco delivering underground development and mining services since January 2015 • Mining contract extended by four years with an option for an additional two year extension • Contract delivers ~5% improvement in costs through productivity and efficiency improvements • The c
Slide 12: Nickel sulphate downstream processing studies
Nickel sulphate downstream processing studies • Demonstrated technical feasibility of process route • Pre-feasibility underway with plant trial to produce optimised low sulphur concentrate completed • Delivers multiple benefits: ─ Increase in payable metal ─ Increased concentrator recovery ─ Higher
Slide 13: Tropicana
Tropicana Record mill throughput delivered and value enhancement studies on track Tropicana oz Production (100%) and AISC A$/oz Metric Units 4Q18 1Q19 Guidance(1) 160,000 1,200 1,093 1,076 939 1,040 Gold produced (100%) koz 114.3 125.1 125.0 – 137.5 140,000 1,000 Gold Sold (IGO 30%) koz 33.2 35.1 37
Slide 14: Tropicana value drivers
Tropicana value drivers • Additional ball mill delivers higher throughput rate and improved gold recovery ─ Commissioning by end CY18 6MW Ball Mill • Boston Shaker Underground Pre- feasibility study nearing completion ─ Market release in 2Q19 • Further underground potential at Havana and Havana Sout
Slide 15: Tropicana
Tropicana Boston Shaker Underground Pre-feasibility Study on track for 2Q19 Boston Shaker Underground Drilling(1) 15 1) Refer to AGA ASX release dated 3 Aug 2018: Tropicana Site Visit
Slide 16: Nova
Nova Mine lease drilling underway High-resolution 3D seismic data received • Interpretation and targeting commenced • Numerous high-priority targets already identified +20,000m drilling and down-hole EM program Aries commenced • Diamond drilling of mineralised gabbroic intrusives underway - dissemin
Slide 17: Fraser Range Exploration
February 2018 Fraser Range Exploration Multiple programs active Diamond drilling of regional prospects continued to test combined EM and geochemical targets • Three holes at Widowmaker; Assays pending Systematic aircore drilling and geophysical programs continued across the belt • Up to four rigs dr
Slide 18: Lake Mackay Exploration
Lake Mackay Exploration IGO earns 70% JV interest Joint Venture formed • Prodigy Gold to fund 30% JV interest of $4.6M FY19 program going forward(1) SpectremAir airborne EM continues • +12,000 line-km survey resuming in October • Results from central AEM survey positive with 39 bedrock conductors de
Slide 19: Concluding Comments
Concluding Comments Strong cash generation and balance sheet strengthening Net cash of A$62M • Debt reduced by A$29M to A$114M • Fully franked dividends of A$12M paid Nova and Tropicana deliver metal production within guidance • Non recurring costs, reduced by-product credits and higher fuel price i
Slide 20: FOLLOW US
FOLLOW US» AS WE GO FROM STRENGTH TO STRENGTH igo.com.au