Slide 1: Full Year Results Presentation
INDEPENDENCE GROUP NL For personal use only PETER BRADFORD, MANAGING DIRECTOR AND CEO Full Year Results Presentation 31 August 2016
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 For personal use only or purchase any securities in IGO or as an inducement to make an offer or invit
Slide 3: Business highlights
Business highlights Unlocking Growth in 2016 and Beyond For personal use only Acquisition of Nova completed on 22 September 2015 • Nova construction on time and on budget, first concentrate expected in December 2016 • Project execution has been de-risked and project value improved through two optimi
Slide 4: Financial results
Financial results Base metals headwinds persisted through FY16 For personal use only Business in transition • Nova overall project completion reached 93.4% with A$242M spent on construction during FY16 • Tropicana plant expansion scheduled for completion in September 2016 quarter • Tropicana Long Is
Slide 5: Earnings summary
Earnings summary Acquisition costs plus lower metal prices and production reduce earnings For personal use only Net Profit After Tax (A$M) Revenue (A$M) 100 600 500 80 400 300 60 200 40 100 0 20 FY13 FY14 FY15 FY16 Underlying EBITDA (A$M) (1) 250 (20) 200 150 (40) 100 (60) 50 (80) 0 FY13 FY14 FY15 F
Slide 6: NPAT waterfall
NPAT waterfall Exploration impairment and acquisition cost variance of (A$97.2M) For personal use only NPAT variance A$M 100 External A$3.7M Internal (A$42.1M) 80 33.6 60 33.6 51.2 0.9 2.8 40 76.8 80.5 1.4 1.1 3.0 3.8 7.1 6.9 2.1 20 32.1 38.3 - (20) 65.1 (58.9) (40) (60) (80) Price(1) Gold Income Pr
Slide 7: EBITDA waterfall
EBITDA waterfall External (prices) and internal (production volume) impact earnings For personal use only Underlying EBITDA variance (1) A$M 250 External (A$29.8M) Internal (A$45.4M) 200 33.6 0.9 2.9 51.2 150 3.8 7.1 6.9 2.1 212.7 100 182.9 137.4 50 - Price (2) Investments Gold Production Costs of C
Slide 8: FY16 Variance analysis
FY16 Variance analysis Focus on cost management Cost of production variance FY15 to FY16 Corporate cost variance FY15 to FY16 For personal use only A$ M A$M 20 25 16 20 2.6 6.5 2.2 12 15 9.7 13.6 8 10 20.4 17.9 15.7 10.9 4 5 10.8 3.8 - - Long Jaguar Tropicana FY16 Decrease in IGO SIR Combined Synerg
Slide 9: FY16 EBITDA components
FY16 EBITDA components Lower EBITDA across all operations For personal use only Underlying EBITDA (1) A$M 160 140 135.3 FY16 A$137.5 M FY15 A$212.7 M 120 114.9 100 80 67.5 60 55.1 43.1 40 18.9 20 - 1.6 - (2.8) (1.5) (20) (10.8) (17.9) (23.1) (40) (30.0) Tropicana Long Jaguar New Business Corporate H
Slide 10: FY16 EBITDA by half year
FY16 EBITDA by half year Cessation of grade streaming at Tropicana in H1FY16 For personal use only Underlying EBITDA (1) A$ M 80 69.9 70 H1 FY16 H2 FY16 60 50 45.0 40 29.4 30 20 13.7 10.4 8.5 10 4.3 0.0 - (1.9) (0.9) (10) (9.6) (8.4) (9.4) (13.5) (20) Tropicana Long Jaguar New Business Corporate Inv
Slide 11: Cash flow summary
Cash flow summary Strong balance sheet with pro-forma net cash of $49.6M For personal use only Free Cash Flow (A$M)(1) Operating Cash Flow (A$M) 150 250 200 150 100 100 50 50 0 FY13 FY14 FY15 FY16 Pro-forma cash Net Cash at year end (A$M) position of A$49.6M 150 subsequent to equity 100 raising(2) (
Slide 12: Tropicana: FY16 operational scorecard and FY17 guidance
Tropicana FY16 operational scorecard and FY17 guidance For personal use only Units FY16 Guidance1 FY16 Results FY17 Guidance Range Gold produced (100% basis) oz 430,000 to 470,000 448,116 390,000 to 430,000 Gold (IGO’s 30% share) oz 129,000 to 141,000 134,435 117,000 to 129,000 Cash cost A$/oz Au 68
Slide 13: Long: FY16 operational scorecard and FY17 guidance
Long FY16 operational scorecard and FY17 guidance For personal use only FY16 Units FY16 Guidance1 Results FY17 Guidance Range Nickel (contained metal) tonnes 8,500 to 9,000 8,483 7,400 to 8,200 Cash Cost (payable) A$/Ib Ni 3.50 to 4.00 3.68 3.50 to 3.90 Sustaining capex A$M 2 to 3 1.7 1 Exploration
Slide 14: Jaguar: FY16 operational scorecard and FY17 guidance
Jaguar FY16 operational scorecard and FY17 guidance For personal use only FY16 Units FY16 Guidance1 FY17 Guidance Range Results Zinc in concentrate tonnes 38,000 to 40,000 39,335 39,000 to 43,000 Copper in concentrate tonnes 6,500 to 7,000 7,412 4,600 to 5,100 Cash cost (payable) A$/Ib Zn 0.60 to 0.
Slide 15: Nova Project overview
Nova Project overview Project remains on schedule and on budget For personal use only Substantial on-site progress • Overall project is on schedule reaching 93.4% completion at 30 June 2016 • First development ore mined during the June 2016 quarter • Three grade control drilling rigs onsite • Projec
Slide 16: Value enhancement of Nova Project
Value enhancement of Nova Project Significant value unlocked with improved mining flexibility For personal use only • Further value unlocked at Nova through • Optimisation Study, December 2015 • Accelerated Development of Bollinger, July 2016 • A cumulative 50.8% increase in NPV relative to the DFS1
Slide 17: Nova initial operating guidance
Nova initial operating guidance Project poised to deliver For personal use only • Preliminary operating guidance for Nova provided through to FY19 • Additional opportunities exist to improve mining production and processing rates • Further enhancements identified which will be pursued following comm
Slide 18: FY17 exploration guidance
FY17 exploration guidance IGO remains committed to delivering growth through discovery For personal use only A$33M exploration budget across portfolio • Brownfields and greenfields focus • Greenfields exploration targeting provinces that can deliver multiple gold and base metals projects • Increasin
Slide 19: Concluding comments
Concluding comments Diversified mining company unlocking future growth For personal use only • Challenging conditions across base metals sector • IGO has delivered measured investment through the cycle to unlock growth • Substantial value unlocked through accelerated development of Bollinger within
Slide 20: For personal use only
© AS WE GO FROM LL STRENGTH TO STRENGTH igo.com.au