Slide 1: Nova Optimisation Study Presentation
INDEPENDENCE GROUP NL For personal use only Peter Bradford, Managing Director and CEO Nova Optimisation Study Presentation 14 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: Key Nova Highlights
Key Nova Highlights For personal use only • 56% complete On Time & On Budget • First concentrate delivered December 2016 • Improved Project NPV Added Value • Increased margin • Improved early free cash flow • Increased operational flexibility • Achieving higher than forecast assumptions Reduced Risk
Slide 4: Project Update
Project Update On time and on budget For personal use only • Approximately 56% of work complete1 • Remains on time and on budget with first production of concentrates expected in December 2016 • Infrastructure well advanced • Underground development 11 weeks ahead of schedule • Processing plant site
Slide 5: Focus on Earlier Delivery of Value
Focus on Earlier Delivery of Value For personal use only IGO delivers significant enhancement in Project value 1,2 compared to the DFS • 36% improvement on the Project NPV • 27% reduction in expected C1 cash costs (after by-product credits) in concentrate to $1.21/lb from $1.66/lb nickel • 21% decre
Slide 6: Substantial value unlocked
Substantial value unlocked For personal use only Relative NPV % Difference between DFS and Optimisation Study % NPV variance 160 Improved mine scheduling 26% 140 3 6 8 5 120 Better offtake terms 5% % Relative Different 26 136 100 100 80 36% improvement to Lower operating costs the Project NPV 8% 60
Slide 7: Resource, Reserve, Mining Inventory
Resource, Reserve, Mining Inventory DFS Optimisation Study For personal use only 11 11 134 134 Mineral Resource 325 325 Ni Metal Cu Metal Co Metal Ni Metal Cu Metal Co Metal 9 9 Insitu contained 112 112 metal has not Ore Reserve changed between the 273 275 DFS and Optimisation Study Ni Metal Cu Meta
Slide 8: Updated Mining Sequence
Updated Mining Sequence Portal • Initial stopes extracted on the north- For personal use only western and south-western margins of Nova • Principal extraction is via Centre-Out mining sequence of Lower Nova • Extraction of Bollinger brought forward with similar Centre-Out sequence • Upper Nova defer
Slide 9: Improved Mine Schedule Adds Value
Improved Mine Schedule Adds Value For personal use only Production Schedule 2.00 2.50% 1.75 Production profile has: 2.00% 1.50 • Accelerated ramp-up to Ore Mined (Mt) Head grade (%) 1.25 1.50% 1.5Mtpa in FY17 & FY18 1.00 0.75 1.00% 0.50 0.50% • Consistent 1.5Mtpa 0.25 - - production profile 2015 201
Slide 10: Commodity Price Sensitivities
Commodity Price Sensitivities For personal use only Low Price Physical Description Units OS % Variation Scenario Variation • Mine inventory and Nickel $/t 18,231 14,500 (3,731) (20%) design is extremely Copper $/t 8,506 7,000 (1,506) (18%) Cobalt $/t 29,394 25,000 (4,394) (15% insensitive to commodi
Slide 11: Metallurgy and Processing Optimisation
Metallurgy and Processing Optimisation Recoveries For personal use only Geometallurgical algorithms developed to model; DFS • Plant recovery 95% 94% 95% • Milling power and throughputs 90% 89% • Reagent consumptions 88% • Processing operating costs 85% Captured on a block by block basis 80% LOM (inc
Slide 12: Operating Costs Substantially Reduced
Operating Costs Substantially Reduced For personal use only Operating Costs Per Tonne Ore 140 120 11.6 Operation Costs ($/t ore) 11.6 100 4.51 10.83 10.24 80 9.61 35.64 60 30.68 40 54.97 49.37 20 0 DFS OS Mining Processing G&A Haulage and handling Shipping* % Variance to Operating Cost Unit DFS Opti
Slide 13: Moving Down the Nickel Cost Curve
Moving Down the Nickel Cost Curve C1 cash cost (US$/lb) For personal use only 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 cost curve Study • Expected to be positioned within the t
Slide 14: Capital Costs Reduced
Capital Costs Reduced For personal use only Optimisation % Variance to Capital Cost Unit DFS Study DFS Initial Capital1 $M 473 443 6% Sustaining Capital2 $M 152 148 3% Initial capital cost revised down to $443M on 27 January 2015 • Resulted from increased competitiveness in cost inputs • Included $2
Slide 15: Potential to Capture Further Value
Potential to Capture Further Value For personal use only Optimisation Study completed at a design rate of 1.5Mtpa • Project remains mining constrained (processing plant capable of processing all the ore produced at any given time) Potential for further value to be recognised through increasing minin
Slide 16: Exploration to Deliver Long Term Growth
Exploration to Deliver Long Term Growth For personal use only • Currently integrating and evaluating exploration data sets • Re-targeting and prioritisation to be completed for March quarter 2016 • Investigating collaborative research initiatives to unlock exploration discoveries Positioning explora
Slide 17: Project Value Significantly Enhanced
Project Value Significantly Enhanced For personal use only Enhanced Project Metrics: • 36% improvement to the Project NPV compared to DFS • 27% reduction in expected C1 cash costs (after by-product credits) in concentrate • 21% decrease in all-in sustaining cash costs • Increased early free cash f
Slide 18: As We Go From Strength to Strength
AS WE GO FROM STRENGTH TO STRENGTH igO.com.au