Igo Limited · ASX:IGO
Igo — Independence Group NL — Macquarie Western Australia Forum 2018
37 slides from Igo's conference presentation, Oct 15, 2018
Slide 1: Macquarie Western Australia Forum 2018
INDEPENDENCE GROUP NL Macquarie Western Australia Forum 2018 For personal use only Peter Bradford, Managing Director and CEO October 2018 ASX:IGO / ADR:IIDY
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: Key messages
Key messages: • Solid FY18 with record revenue and For personal use only underlying EBITDA • Increased production and lower costs expected for Nova and Tropicana in FY19 • Tropicana underground and Nova downstream processing studies underway to further enhance value • Exploration to unlock discovery
Slide 4: Introduction
For personal use only Introduction 4 4
Slide 5: High quality, long life assets that deliver great financial returns
We focus on high quality, long For personal use only life assets that deliver great Share Ownership financial returns Substantial Holders(1) Institutional Ownership(3) Mark Creasy 16% Australia 69% FIL 9% USA 23% T Rowe Price 8% UK & Europe 5% CBA 6% ROW 3% ASX IGO Ausbil 5% Base Perth, WA Share Pri
Slide 6: Strategic focus on minerals critical to energy storage and electric vehicles
Strategic focus on minerals critical to energy storage and electric vehicles For personal use only IGO EBITDA Profile (A$M)(1) 600 500 400 300 200 100 - FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19E FY20E FY21E Long (A$M) Jaguar (A$M) Tropicana (A$M) Nova (A$M) 1) Macquarie Research – 29 Aug 2018 6
Slide 7: Safety & Sustainability
Safety & Sustainability 2018 ACSI Rating of ASX200 Sustainability Reporting(5) Key Lag Safety Metrics(1,2,4) For personal use only 9.0 8.0 Leading 7.0 LTIFR 12 MMA 6.0 MTIFR 12 MMA Detailed 5.0 4.0 3.0 Moderate 2.0 1.0 Basic - No Reporting Key Lead Safety Metrics(3) Sector Sector ASX 200 Average Lea
Slide 8: Part of the IGO Difference is our focus on people
Part of the IGO Difference is For personal use only our focus on people • Strong sense of purpose • Empowered people who are, and act as, owners of the business and want to make a difference • Focus on diversity because it is the right thing to do 8
Slide 9: FY18 & FY19
For personal use only FY18 & FY19 9
Slide 10: FY18 Highlights
FY18 Highlights Nova and Tropicana drive record FY18 results For personal use only • Record revenue and underlying EBITDA • Completed first full year of commercial production at Nova • Tropicana and Long production better than mid-point of guidance • Long transitioned into care and maintenance in Ju
Slide 11: Record Financial Results
Record Financial Results Revenue and Underlying EBITDA up 85% and 125% respectively For personal use only Units FY17 FY18 YoY Revenue and Other Income A$M 421.9 780.6 85% Underlying EBITDA(1) A$M 150.5 338.6 125% Net Profit After Tax A$M 17.0 52.7 210% Net Cash from Operating Activities A$M 77.7 277
Slide 12: FY18 Cash Flow Reconciliation
FY18 Cash Flow Reconciliation Cash increased by A$103M to A$139M For personal use only Cash Flow Reconciliation (A$M) 300 250 19 44 22 18 19 - 200 - 23 10 - 57 76 - 8- 150 12 - 100 93 139 50 36 - Cash at Nova FCF Tropicana Jaguar FCF Long FCF Exploration Investment Jaguar Sale Stockman Corporate Deb
Slide 13: FY19 Guidance
FY19 Guidance(1) Stronger year at Nova and Tropicana in FY19 For personal use only Nova guidance de-risked by grade control drilling Tropicana grade streaming to deliver higher and first year of commercial production in FY18 production and lower cash costs Metric Units FY19 Guidance Metric Units FY1
Slide 14: Tropicana
For personal use only Tropicana 14 14
Slide 15: Tropicana
Tropicana • 330km NE of Kalgoorlie For personal use only • 525,000oz gold production (100%) at A$935/oz AISC(1) • ~10 year mine life remaining • Underground studies and exploration to deliver upside potential Tropicana Production (100%) & AISC koz A$/oz 160 1,400 140 1,167 1,200 1,093 1,076 120 939
Slide 16: Tropicana value drivers
Backfilling Tropicana value drivers For personal use only • Grade streaming drives FY19-FY20 gold production and costs • Long Island underpins mine life 6MW Ball Mill • Additional ball mill delivers lift in scale and gold recovery ─ Construction commenced ─ Commissioning by end CY18 • Underground po
Slide 17: Tropicana – 5km strike of mineralisation
Tropicana – 5km strike of mineralisation For personal use only 1) Refer to AGA ASX release dated 3 Aug 2018: Tropicana Site Visit 17
Slide 18: Reserve extension opportunities
Reserve extension opportunities For personal use only Boston Shaker Underground Drilling(1) • Boston Shaker underground study expected 2Q19 • Future underground assessment at Havana and Havana South • Regional exploration along 160km of strike on 3,000km2 1) Refer to AGA ASX release dated 3 Aug 2018
Slide 19: Nova
For personal use only Nova 19
Slide 20: Nova
Nova • Delivers scale, low cost, long mine For personal use only life and exploration upside • Successful first year of commercial production delivered in FY18 Nova Production & Payable Cash Cost Tonnes A$/lb 8,000 7,344 3.98 3.84 4 7,000 2.68 5,961 6,000 1.79 2 5,000 4,500 4,454 - 4,000 3,230 3,000
Slide 21: Successful first year of commercial production
Successful first year of commercial production For personal use only • Delivered nameplate capacity of 1.5Mtpa ─ Demonstrated sprint rate of 1.8Mtpa for mining and processing • Transitioned to smaller number of larger stopes at Nova and Bollinger • Resource model performing • Nickel recoveries in li
Slide 22: Nova Underground Mine Design & Drilling
Nova Underground Mine Design & Drilling For personal use only 22
Slide 23: Strong outlook for Nova
Strong outlook for Nova • Consistent and higher production For personal use only Directional Production and Cash Costs rate expected next three years • Main driver is higher grade stopes in kt A$/lb 30 3.0 core of Nova and Bollinger 2.5 • Assumes: 20 2.0 ─ 1.5Mtpa mining and processing 1.5 rate 10 1
Slide 24: EV Batteries, Nickel & IGO's Opportunity
For personal use only EV Batteries, Nickel & IGO’s Opportunity 24
Slide 25: Nickel to be a big winner from EV battery demand disruption
Decreasing stockpiles and For personal use only stainless steel demand growth to Nickel to be a big winner from move nickel prices higher EV battery demand disruption Official Nickel Exchange Stockpiles and Price(1) • Market in deficit in 2016 & 2017 • Synchronous growth in USA, Nickel Stocks Nickel
Slide 26: Expect nickel price pressure to increase as EV demand accelerates
Expect nickel price pressure For personal use only Nickel Mine Supply by Product (kt)(1) to increase as demand for EV Ni ktpa 2018E supply Ni ktpa batteries accelerates after 2020 3,500 deficit of 3,500 167kt(2) Forecast Nickel Price Consensus(3) (US$/t) 3,000 3,000 2,500 2,500 2,000 2,000 17,000 1,
Slide 27: EV battery cathodes with higher nickel content enable higher energy density
EV lithium ion battery cathodes with higher nickel content are Cathode Metal Content key to enabling higher energy For personal use only density 9.0% 2.1% 2.1% 4.6% 13.8% 30.4% 27.4% NMC Chemistry – Energy Density by Type (Wh/kg)(1) >300 300 with Si with Si anode anode 30.2% 36.2% 71.9% 270 82.3% 73
Slide 28: Downstream processing potential at IGO
LME Nickel Versus Nickel Sulphate (US$/t)(1,2) For personal use only Downstream processing US$/t 20,000 potential at IGO • Produce nickel and cobalt 18,000 16,000 NiSO4 Price sulphates for EV batteries Premium • Delivers potential for higher payability, premium price 14,000 12,000 and higher concent
Slide 29: Nickel sulphate hexahydrate crystals produced from Nova nickel concentrate
Nickel sulphate hexahydrate For personal use only crystals produced from Nova nickel concentrate • Demonstrated technical feasibility of process route • Testwork validated and improved upon previous metallurgical assumptions indicating potential for lower capex & opex • Prefeasibility underway 1) Ph
Slide 30: Discovery
For personal use only Discovery 30
Slide 31: A$51M committed to discovery in FY19
A$51M committed to discovery in FY19 For personal use only Nova A$12.0M Tropicana A$3.0M Long A$33.0M A$2.5M Greenfields, Generative & Other Best in Class exploration and discovery capability 31
Slide 32: Leveraged science in FY18 to deliver drill targets for FY19
Leveraged science in FY18 to For personal use only deliver drill targets for FY19 • Completed the largest 3D seismic program ever undertaken in Australia over the Nova Mining Lease • New AMT and Squid EM • Full geological reassessment • Collaborative R&D • FY19 drill program underway with 20,000m pl
Slide 33: Why explore the Fraser Range?
September 2015 Why explore the Fraser Range? For personal use only • Multiple magmatic intrusions • Ni/Cu anomalism reported by multiple explorers along belt • Disseminated and blebby sulphides Empirical evidence demonstrates belt is fertile 1) Classic Minerals ASX Releases: 29 Aug 2013, 12 Dec 2013
Slide 34: Systematic exploration over ~15,000km2 of consolidated tenure
February 2018 September 2018 For personal use only Systematic exploration over ~15,000km2 of consolidated tenure • Multiple EM platforms • Bedrock geochem using Aircore • Gravity survey & mapping • Follow up RC/DDH Creasy Silver Knight1 discovery demonstrates potential of belt 1) www.dmirs.wa.gov.au
Slide 35: Lake Mackay belt scale greenfields exploration project
Lake Mackay is a 12,800km2 belt For personal use only scale greenfields exploration project for IGO • Polymetallic intersections in drilling at Grapple & Bumblebee • Rock chip samples from Grimlock prospect confirm results with up to 2.5% Co, 1.1% Ni, 46.4% Mn(1) • Spectrem airborne EM survey commen
Slide 36: Summary Comments
Summary Comments • Great people and culture For personal use only • Demonstrated exploration, development and operating capability • Great assets at Nova and Tropicana • Strong balance sheet and free cashflow • Poised for organic growth: ─ Discovery ─ Downstream processing 36
Slide 37: igo.com.au
“FOLLOW US | UAS WE GO FROM STRENGTH TO STRENGTH igo.com.au
Independence Group NL — Macquarie Western Australia Forum 2018 on 6ix