Igo Limited · ASX:IGO
Igo — Merger or Acquisition (December 2021)
38 slides from Igo's merger presentation, Dec 16, 2021
Slide 1: Acquisition of Western Areas Limited
ACQUISITION OF WESTERN AREAS LIMITED SCHEME IMPLEMENTATION DEED FOR A RECOMMENDED TRANSACTION 16 December 2021
Slide 2: Cautionary Statements & Disclaimer
Cautionary Statements & Disclaimer Summary information This Presentation is for information purposes only and is a summary only. The information in this Presentation is of a general nature and does not purport to be complete nor does it contain all information which a prospective investor may requir
Slide 3: Cautionary Statements & Disclaimer
Cautionary Statements & Disclaimer Ore reserve and mineral resource estimates The information in this presentation that relates to IGO’s Nickel Mineral Resources or Ore Reserves is extracted from IGO’s ASX release dated 17 March 2021 entitled “CY20 Mineral Resource and Ore Reserve Statement and is a
Slide 4: Agenda
Agenda 1 Transaction Overview 5 2 Western Areas Overview and the enlarged IGO Portfolio 16 3 Transaction Benefits and IGO Positioning 26 Appendix: A Scheme Implementation Deed & Indicative Timetable 30 B Mineral Resource and Ore Reserve Statements 33 4
Slide 5: Transaction Overview
TRANSACTION OVERVIEW 5
Slide 6: Transaction Details
Transaction Details IGO to acquire Western Areas for A$3.36 cash per share via a Recommended Scheme of Arrangement IGO has entered into a Scheme Implementation Deed (SID) with Western Areas Limited (Western Areas or WSA) pursuant to which Transaction IGO will acquire 100% of Western Areas for cash u
Slide 7: Transaction Details (cont.)
Transaction Details (cont.) Transaction is expected to complete in April 2022, subject to satisfaction of conditions IGO intends to fund the Transaction and associated costs through a combination of: IGO transaction • A debt facility of A$900M underwritten by ANZ, CBA and NAB; and funding • Cash of
Slide 8: Transaction Rationale
Transaction Rationale Acquisition to enhance IGO’s nickel portfolio and deliver strong financial outcomes for IGO shareholders Aligned with Strategy Cash Consideration Accretive In line with IGO’s focus on clean No dilution for IGO shareholders Free Cashflow Accretive from FY24 energy metals (
Slide 9: Aligned with IGO's strategic focus on clean energy
Aligned with IGO’s strategic focus on clean energy In the last 12 months, IGO has realigned its portfolio to leverage the clean energy opportunity Li 9 December 2020 Au 13 April 2021 Ni 27 July 2021 Ni 16 December 2021 • Agreement with Tianqi Lithium • Divestment of IGO’s 30% • Acquisition of the Si
Slide 10: Enhances exposure to the EV and clean energy metal thematic
Enhances exposure to the EV and clean energy metal thematic IGO is a direct beneficiary of increasing lithium-ion battery demand through Ni and Li Lithium-ion battery demand outlook (GWh/year)1 Nickel & Lithium demand from lithium-ion batteries (tonnes)1 GWh/year Mt Lithium demand to increase ~11x ~
Slide 11: Strategic and logical consolidation of complementary nickel assets
Strategic and logical consolidation of complementary nickel assets Delivers a portfolio of high-quality operating and exploration assets aligned to clean energy Combined Portfolio Australia’s lowest cost nickel sulphide Nova operation - track record of consistent IGO 100% production and cost control
Slide 12: Enhances IGO's nickel exposure
Enhances IGO’s nickel exposure Significantly increases IGO’s nickel production, nickel reserves and extends mine life FY22e Nickel Nickel Ore Nickel Mineral Production (kt)1 Nickel LOM2 Reserves (kt)3 Resources (kt)3 +63% +169% 16 - 17 41 - 44 10+ 10 years 212 441 656 1,148 25 - 27 ~6 years 6 65 285
Slide 13: Increases scale and delivers portfolio diversification
Increases scale and delivers portfolio diversification Acquisition delivers portfolio diversification and increased near-term nickel production profile Diversification of Reserve base1,2 The acquisition of Western Areas will provide Lithium Nickel Copper Cobalt 3% 4% an additional 277kt Ni contained
Slide 14: Sources and Uses
Sources and Uses IGO intends to fund the Transaction using debt of A$900M and existing cash IGO’s funding sources Sources and Uses • IGO intends to fund the Transaction through a combination of: Sources Tenor (yrs) A$M — Restructuring IGO’s existing A$450M amortising facility into a new senior secur
Slide 15: IGO will retain financial strength post transaction
IGO will retain financial strength post transaction Post Transaction, IGO will remain well funded with pro-forma net debt of A$472M IGO’s financial strength Pro forma snapshot Post-acquisition, IGO will retain a strong IGO Western Areas Acquisition Pro forma IGO balance sheet with modest gearing No.
Slide 16: Asset Overview
ASSET OVERVIEW oe _.
Slide 17: Combined Portfolio
Combined Portfolio IGO will have exposure to nickel and lithium production across four clean energy metals operations Nickel Operations Lithium Operations Nova Greenbushes Ore Reserves1 163kt (1.8% Ni) Ore Reserves (24.99%) 6 735kt (2.1% Li2O) Mineral Resources1 208kt (1.8% Ni) Mineral Resources (24
Slide 18: Western Areas Overview
Western Areas Overview Australian nickel producer with producing Forrestania and Cosmos (development) nickel sulphide assets Overview Project pipeline Scoping / Pre-production • Net cash position of A$147.7M1 Feasibility Producing Pre-feasibility Commissioning Overview • 19.9% shareholder of WA nick
Slide 19: Forrestania
Forrestania Western Areas flagship producing asset is the 100% owned Forrestania nickel project Flying Fox • Flying Fox has operated for over 15 years • Significant low grade disseminated resource • In FY21, Flying Fox mined a total of 176.5kt ore at an average grade of 3.25% nickel for 5.7kt contai
Slide 20: Cosmos
Cosmos The Odysseus Mine at Cosmos is expected to produce nickel in concentrate for 10+ years from FY23 Cosmos Operational Hub • Western Areas’ second operational hub • Strategically located between BHP Nickel West’s Leinster and Mt Keith mines • Established infrastructure in a prolific nickel camp
Slide 21: Mt Goode
Mt Goode A Scoping Study is currently being progressed on the Mt Goode deposit at the Cosmos Nickel Operation Mt Goode Overview Location • Mt Goode is located approximately 30km north of Leinster, WA and is part of the Cosmos Nickel Operation • The pit sits adjacent to the Cosmos open pit and is loc
Slide 22: Nova
Nova High margin 100% owned and operated nickel sulphide mine producing high quality concentrates Nova Overview1 FY21 performance drove record financial outcomes from Nova: • Underlying EBITDA of A$436M (EBITDA margin of 65%) • Underlying FCF of A$393M (FCF margin of 59%) Expanded exploration progra
Slide 23: Greenbushes
Greenbushes World’s largest (by production), highest grade and lowest cost hard rock lithium asset Greenbushes Overview IGO has a 24.99% interest in the world’s largest and lowest cost producer of high quality, chemical grade spodumene concentrate, with expansion optionality and significant life Ove
Slide 24: Kwinana Refinery
Kwinana Refinery Downstream processing facility to produce battery grade lithium hydroxide Kwinana Refinery Overview IGO has a 49% interest in Australia’s first fully automated refinery for the production of world-class battery grade lithium hydroxide, operated alongside Tianqi Lithium (production c
Slide 25: Exploration Portfolio
Exploration Portfolio Combined exploration portfolio is diversified by geography, operation and commodity Extensive Exploration Portfolio Combined Exploration Projects2 • Coupled with the funding capacity and expertise to fully exploit this upside with an extensive portfolio of Fraser Range interest
Slide 26: Transaction Benefits
TRANSACTION BENEFITS 26
Slide 27: Top ASX listed clean energy metals business
Top ASX listed clean energy metals business Acquisition consolidates IGO’s position as a leading diversified clean energy metals company Unique investment proposition 10.0 9.0 8.0 7.0 6.0 Enterprise Value (A$B) 5.0 4.0 Li Li 3.0 Mining Ni Services Ni Ni 2.0 Cu Fe Cu Cu Au Au 1.0 Au Li Co Li Co Li Li
Slide 28: Transaction Benefits
Transaction Benefits Transaction is a logical consolidation of the WA nickel sector aligned with clean energy metals strategy Enhances Nickel Aligned with Strategy Cash Consideration Accretive Logical Consolidation IGO well positioned Portfolio • Transaction further • Funding structure r
Slide 29: We believe in a world where people power makes amazing things happen
We believe in a world where people power makes amazing things happen. Where technology opens up new horizons and clean energy makes the planet a better place for every generation to come. We are bold, passionate, fearless and fun - a smarter, kinder, more innovative company. Our work is making funda
Slide 30: Appendix A: Scheme Implementation Deed
APPENDIX A: SCHEME IMPLEMENTATION DEED 30
Slide 31: Scheme Implementation Deed (SID) Summary
Scheme Implementation Deed (SID) Summary Summary of Key Terms Key Terms The SID governs the process for implementation of the Scheme under which IGO will acquire all Western Areas shares for consideration of A$3.36 per share. The Scheme proceeding is subject to the satisfaction of certain conditions
Slide 32: Transaction Timetable
Transaction Timetable Scheme implementation expected to be completed by April 2022 Key Dates First Court Hearing March 2022 Scheme Meeting April 2022 Second Court Hearing April 2022 Effective Date April 2022 Scheme Record Date April 2022 Implementation Date April 2022 This timetable is indicative an
Slide 33: Appendix B: Mineral Resources and Ore Reserve Statements
APPENDIX B: MINERAL RESOURCES AND ORE RESERVE STATEMENTS 33
Slide 34: IGO Mineral Resources and Ore Reserve Statement
IGO Mineral Resources and Ore Reserve Statement Grades Metal Year Mass Operation ending (Mt) Ni Cu Co Ni Cu Co (%) (%) (%) (kt) (kt) (kt) 2020 Nova (100%) 11.8 1.76 0.71 0.06 208 84 7 IGO Total Mineral Resources 55.3 Grades are not additive 208 84 7 Grades Metal Year Mass Operation ending (Mt) Ni Cu
Slide 35: Western Areas Ore Reserve Statement
Western Areas Ore Reserve Statement Ore Reserves Statement1 Forrestania Tonnes Grade Ni % Ni Tonnes Classification JORC Code Flying Fox Area 164,100 3.2 5,190 Probable Ore Reserve 2012 Spotted Quoll Area 793,200 3.7 29,180 Probable Ore Reserve 2012 Diggers Area Diggers South 2,016,000 1.4 28,950 Pro
Slide 36: Western Areas Mineral Resource Statement
Western Areas Mineral Resource Statement Forrestania Mineral Resource Statement1 Forrestania Tonnes Grade Ni % Ni Tonnes Classification JORC Code Flying Fox Area T1_T6 Massive Zone 827,020 4.4 36,490 Indicated Mineral Resource 2012 T7 Massive Zone 259,568 1.5 3,771 Inferred Mineral Resource 2012 T5
Slide 37: Western Areas Mineral Resource Statement (cont.)
Western Areas Mineral Resource Statement (cont.) Cosmos Mineral Resource Statement1 Cosmos Tonnes Grade Ni % Ni Tonnes Classification JORC Code Cosmos Area AM5 1,449,751 2.0 28,217 Indicated Mineral Resource 2012 1,832,451 2.2 40,578 Inferred Mineral Resource 2012 AM6 2,889,733 2.1 59,397 Indicated
Slide 38: We believe in a world where people power makes amazing things happen
We believe in a world where people power makes amazing things happen. Where technology opens up new horizons and clean energy makes the planet a better place for every generation to come. We are bold, passionate, fearless and fun - a smarter, kinder, more innovative company. Our work is making funda