Igo Limited · ASX:IGO
Igo — Independence Group NL — Shareholder Meeting (December 2015)
29 slides from Igo's shareholder meeting presentation, Dec 16, 2015
Slide 1: Annual General Meeting Presentation
INDEPENDENCE GROUP NL For personal use only Peter Bradford, Managing Director and CEO Annual General Meeting Presentation 16 December 2015
Slide 2: Cautionary statements & disclaimer
Cautionary statements & disclaimer For personal use only • 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 invit
Slide 3: Highlights and achievements
Highlights and achievements For personal use only Vision and Strategy Sustainability Financial Performance We have a clearly articulated A year of continuous Record revenue and vision and a focussed improvement and capacity operating Cashflow delivered strategy building in FY15 Operations Production
Slide 4: FY2015 in retrospect
FY2015 in retrospect A roller coaster journey For personal use only • Consistent delivery against guidance 200% IGO Share Price Performance (since last AGM) • Maintained strong performance against backdrop of significant commodity price deterioration 100% • Completed transformational acquisition of
Slide 5: Medium to long term outlook is positive
Medium to long term outlook is positive Delivery of first production from Nova could be perfectly timed For personal use only 25,000 8,000 Ni Price Cu Price (USD/t) (USD/t) 20,000 6,000 15,000 4,000 10,000 2,000 5,000 - - 2015 2020 2025 2030 2015 2020 2025 2030 Wood Mac (Dec-15) CRU (Dec-15) Wood Ma
Slide 6: Relative metal production
Relative metal production Relative to Tropicana For personal use only At spot prices Nova delivers 49% more payable metal 300% than Tropicana on a like for like basis 250% 200% 150% 100% 50% 0% Tropicana Long Jaguar Nova (spot) Nova (Consensus 1) Tropicana based on FY17 forecast (IGO 30% share only)
Slide 7: Relative operating margin
Relative operating margin Operating margin relative to Tropicana M3 (all in sustaining cost margin) For personal use only 250% At spot prices Nova delivers 38% more all-in operating margin than Tropicana on a like for like basis 200% M1 (cash cost margin) M3 (all in sustaining cost margin) 150% 100%
Slide 8: Focus on operating margin
Focus on operating margin Delivered by a strategic focus on high margin assets For personal use only 50% 51% 39% 66% Operating Operating Operating Operating Margin for Margin for Margin in Margin in FY14 FY15 Nova Nova At Spot1 At Consensus2 1) Life of mine operating margin based on spot commodity p
Slide 9: Clear company building vision
Clear company building vision Diversified gold and base metals strategy reduces shocks to For personal use only the business from single commodity exposure Diversified High margin portfolio assets Sustainable superior returns Long mine life Low risk assets jurisdiction 9
Slide 10: Transforming vision into reality
Transforming vision into reality For personal use only Deliver Nova Project on time and on budget with first production in December 2016 Maintain track record of consistent delivery to meet/beat guidance Allocate/defer capital to proactively manage balance sheet Focus on triple bottom line 10
Slide 11: Recent financial results
Recent financial results Track record of consistent delivery For personal use only Great year in FY15 with strong growth 600 in all financial metrics • $499M revenue 500 Revenue ($M) Operating Cash Flow ($M) • $213M underlying EBITDA • $116M Free cash flow 400 Continued strong performance in 300 1Q1
Slide 12: Underlying EBITDA ex mine
Underlying EBITDA ex mine All mines contributing strongly Strong EBITDA at For personal use only lower commodity 80 prices 70 Underlying EBITDA ($’M) 60 50 40 30 20 10 0 Q1FY14 Q2FY14 Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15 Q4FY15 Q1FY16 Tropicana Long Jaguar 1) Underlying EBITDA is a non-IFRS measure an
Slide 13: Sustainability
Sustainability Focus on leading indicators delivers improved performance For personal use only 14 42 12 36 10 30 8 24 6 18 4 12 12 Mthly Rolling TRIF (RHS) 2 12 Mthly Rolling LTIF (LHS) 6 0 0 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15 Jul 15 1) LTIF is lost time injury frequency rate expressed
Slide 14: 2015 Sustainability Report
2015 Sustainability Report First Sustainability Report for IGO For personal use only IGO has a clear approach to sustainability based on: • the International Council on Mining and Metals (ICMM) Sustainable Development Principles • defined Policies and Standards, including a commitment to transparenc
Slide 15: IGO asset portfolio
IGO asset portfolio Portfolio of high margin gold and base metals assets For personal use only Mining Construction Permitting Exploration Au Ni Zn/Cu Ni/Cu Cu/Zn TROPICANA LONG JAGUAR NOVA STOCKMAN VARIOUS 30% JV Interest 100% owned 100% owned 100% owned 100% owned 70-100% West Australia West Austra
Slide 16: Tropicana overview
Tropicana overview One of Australia’s lowest cost, open pit gold mines of scale For personal use only 200 Gold Production (‘000oz)3,4 Low cost and long mine life • 30% IGO and 70% AngloGold Ashanti 150 • 3 Moz Ore Reserves1 contained within 7 Moz 100 Resource1 $135M underlying EBITDA in FY152 50 • D
Slide 17: Tropicana upside
Tropicana upside Significant potential to extend mine life beyond initial 10 years For personal use only Gas project completion by mid-2016 • Pipeline complete and now progressively converting powerhouse Process plant debottlenecking ongoing • Work underway to debottleneck processing plant to +7.0 M
Slide 18: Jaguar overview
Jaguar overview High grade Zn-Cu VMS camp For personal use only $67M underlying EBITDA in FY15(1) 140 Mining Productivity 100 • Focus on productivity 90 120 • Significant improvement over last 1-2 years 80 Operating cost ($/t) FY16 Guidance(2) Ore Tonnes (‘000t) 100 70 • 38kt zinc & 8,000t Cu at $0.
Slide 19: Long overview
Long overview History of consistent production and reserve replacement For personal use only $55M underlying EBITDA in FY15(1) Strong operating margin at spot AUD • Consistent low cost producer 6 nickel prices FY16 guidance(2) 5 • Focus on high margin mining areas 30% operating Ni price/cash cost (A
Slide 20: Nova overview
Nova overview World class project delivering scale, high margin and long mine life For personal use only Project timeline is a testament to project quality • Discovered in July 2012 construction commenced January 2015 • Acquired by IGO in September 2015 Low cost and high margin1 • C1 cash costs of $
Slide 21: Nova Project design
Nova Project design Tried and tested underground mining and processing methods For personal use only Underground mining by Barminco • Conventional longhole open stoping with decline haulage 1.5Mtpa Processing plant • Conventional flowsheet of crushing, grinding, flotation and filtration • Differenti
Slide 22: Nova construction on schedule
Nova construction on schedule Nova on time and on budget with 56% work completed For personal use only 22
Slide 23: Optimisation Study completed
Optimisation Study completed Focus on earlier delivery of value For personal use only IGO delivers significant enhancement in Project value compared to the DFS1,2 • 36% improvement on the Project NPV • 27% reduction in expected C1 cash costs (after by-product credits) in concentrate to $1.21/lb from
Slide 24: Optimisation Study unlocks value
Optimisation Study unlocks value For personal use only Relative NPV % Difference between DFS and Optimisation Study % NPV variance Improved mine 160 scheduling 26% 140 3 6 8 5 120 Better offtake terms 26 5% % Relative Different 136 100 100 80 36% improvement to the Project NPV Lower operating costs
Slide 25: Updated mining sequence
Updated mining sequence Capitalises on faster development rates For personal use only Portal • Initial stopes extracted on the north-western and south- western margins of Nova • Principal extraction is via Centre- Out mining sequence of Lower Nova • Extraction of Bollinger brought forward with simil
Slide 26: Moving down the nickel cost curve
Moving down the nickel cost curve We have taken a great nickel project and made it better For personal use only C1 cash cost (US$/lb) Nova - DFS Spot price US$3.95/lb, as at 9 December 2015 ‐ 25 50 75 100 Cumulative Percentile Nickel Nova – • Optimisation Study has moved Nova Optimisation down the c
Slide 27: Greenfields Exploration
Greenfields Exploration Long term commitment to delivering organic growth For personal use only Fraser Range – Tropicana Belt Reshaped the exploration portfolio with a Lake Mackay focus on belt scale opportunities Bryah Basin FY16 greenfields exploration expenditure of $11M1 1) Midpoint of guidance
Slide 28: Concluding comments
Concluding comments Diversified mining company delivering cash flow and growth For personal use only Deliver Nova project on time and on budget with first production in December 2016 Maintain track record of consistent delivery to meet/beat guidance Allocate/defer capital to proactively manage balan
Slide 29: For personal use only
For personal use only
Independence Group NL — Shareholder Meeting (December 2015) on 6ix