Igo Limited · ASX:IGO
Igo — Independence Group NL — Euroz Securities Institutional Conference 2016
38 slides from Igo's conference presentation, Mar 14, 2016
Slide 1: Euroz Securities Institutional Conference
INDEPENDENCE GROUP NL For personal use only Peter Bradford, Managing Director and CEO Euroz Securities Institutional Conference March 2016
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: IGO overview
IGO overview Leading Australian diversified mining company For personal use only ASX Listed (IGO) • Based in Perth, Western Australia Diversified portfolio of high margin assets • 3 operating mines and 1 under construction • All located in Western Australia • Gold, Nickel, Zinc, Copper, Cobalt Stron
Slide 4: Market profile & share ownership
Market profile & share ownership Strong domestic institutional and retail register composition For personal use only Market profile Share ownership • $1.5 billion market capitalisation at $2.95/share(1) • Substantial holders(2) Mark Creasy 18.88% • Share price 52 Week Range FIL Limited 6.84% L
Slide 5: Clear company building strategy
Clear company building strategy Diversification across gold and base metals reduces shocks from single commodity focus For personal use only Diversified High margin Long mine Low risk Superior portfolio assets life assets jurisdiction returns 50% 51% 39% 63% Operating Margin Operating Margin Operati
Slide 6: Balance sheet and funding
Balance sheet and funding Existing operations continue to deliver robust free cash flow For personal use only $260M remaining construction capex at Nova(1) Free cash flow from operating activities $60M cash at bank(1) $350M of $550M debt facilities undrawn(1) 1) At 31 December 2015 6
Slide 7: IGO asset portfolio
IGO asset portfolio Portfolio of gold and base metals assets Mining Construction Permitting Exploration For personal use only 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 Australia West Aus
Slide 8: Tropicana overview
Tropicana overview One of Australia’s lowest cost, open pit gold mines of scale For personal use only 30% IGO and 70% AngloGold Ashanti • Located 370km East NE of Kalgoorlie Low cost and long mine life • 3 Moz Ore Reserves(1) • Contained within 7 Moz Resources(1) • Open Pit mining with remaining LOM
Slide 9: Tropicana upside
Tropicana upside Significant potential to extend mine life beyond initial 10 years For personal use only Gas project well progressed • 292km pipeline completed ahead of plan • Conversion of the powerhouse to gas fired engines now underway Process plant debottlenecking ongoing • Increase throughput f
Slide 10: Tropicana pits
Tropicana pits Four contiguous pits extending over a five kilometre strike For personal use only 10
Slide 11: Conceptual mining study
Conceptual mining study Potential for larger scale equipment and strip mining approach For personal use only Step 1: Mine starter pit - waste dumped ex-pit Blocks are hauled ex-pit Step 2: Mine strips – shallow waste dumped ex-pit and other waste trucked along ramps in pit wall to dump in-pit Hauled
Slide 12: Long overview
Long overview History of consistent production and reserve replacement For personal use only High grade underground nickel • Located in Kambalda, 60km south of Kalgoorlie 35 year operating history • Acquired by IGO in 2002 • Average grade project to date of 3.8% Ni • Owner operated underground minin
Slide 13: Jaguar overview
Jaguar overview High grade Zn-Cu VMS camp For personal use only High grade underground Zn-Cu-Ag-Au VMS deposit • Located 300km north of Kalgoorlie via sealed road • Fly in – fly out from Perth Significant improvement in operation over last 1-2 years • Acquired by IGO in 2011 • Owner operated undergr
Slide 14: Jaguar in-mine resource extension
Jaguar in-mine resource extension Currently drilling out inferred resource at Flying Spur For personal use only 1) Refer ASX Release dated 22 September 2014 14
Slide 15: Nova overview
Nova overview World class, low cost magmatic nickel-copper project For personal use only Fully funded underground nickel-copper project in construction • Located in highly prospective Fraser Range • Located 350km SE of Kalgoorlie, Western Australia • 350km from port of Esperance, Western Australia •
Slide 16: Nova update
Nova update Fully financed, in construction, on schedule and on budget Overall For personal use only • Continued significant progress made with the project now 74% complete at 29 February 2016 • Project remains on budget and on track for commissioning in late 2016 with production of first concentrat
Slide 17: Nova mining inventory
Nova mining inventory Ore Reserve and mining inventory updated December 2015 Mining Contained Ni Contained Cu Contained Co For personal use only Tonnes (Mt) Grade Ni (%) Grade Cu (%) Grade Co (%) Inventory (kt) (kt) (kt) Mineral Indicated 13.2 2.1 1.0 0.08 275 112 9 Resource Additional Inferred 1.4
Slide 18: Nova mine development
Nova mine development Mine development expected to access ore in June quarter 2016 For personal use only Mine development status Daily Metres Advance 3,500 • Contract mine development with 3,000 Barminco 2,500 • Development rates have far 2,000 exceeded original DFS(1) 1,500 • 3.2km of mining develo
Slide 19: Nova mine design
Nova mine design Conventional mechanised mining techniques For personal use only Low risk development • Mining techniques selected at Nova are used by • During the initial mine development execution has IGO at its other operations been further de-risked by use of experienced contractor Barminco • Ba
Slide 20: Nova mine layout
Nova mine layout Deigned for flexibility and productivity 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 similar Cent
Slide 21: Improved mine schedule adds value
Improved mine schedule adds value Updated mining sequence improved project NPV by 26%(1) Production Schedule For personal use only 2.00 2.50% 1.75 2.00% Production profile has: 1.50 1.25 1.50% Ore Mined (Mt) Head grade (%) 1.00 Accelerated ramp-up to 0.75 1.00% 1.5Mtpa in FY17 & FY18 0.50 0.50% 0.25
Slide 22: Nova processing plant
Nova processing plant Conventional design with best in class components For personal use only • Construction based on lump sum turnkey contract with GRES • GRES will complete dry and wet commissioning • IGO will complete ore commissioning with GRES assistance Plant Nameplate Design 1.5Mtpa 22
Slide 23: Nova processing plant
Nova processing plant Plant and infrastructure 50% complete For personal use only Processing flow sheet • Primary Crusher • Surge bin and emergency stockpile • Grinding circuit – SAG & Ball mills • Differential Flotation • Thickening and filtration • Concentrate storage Primary Crusher • Tailings st
Slide 24: Plant commissioning and ramp up
Plant commissioning and ramp up First plant commissioning starts in July 2016 For personal use only 24
Slide 25: Nova power infrastructure
Nova power infrastructure Site power contracted with Zenith Pacific For personal use only Overall site power • BOO power contract with Zenith Pacific • 16 MW power station • 6.7MW solar farm to offset diesel Site power status • First stage 5MW diesel generated power commissioning by April 2016 • Sit
Slide 26: Nova concentrates
Nova concentrates Highly marketable concentrates For personal use only Nickel concentrates • Nickel concentrate grading 13.5% Ni • No Arsenic • High Fe to MgO ratio preferred by smelters Nickel offtake agreements • Three year contract • 50% contracted with BHPB Nickel West, delivered via road to Kam
Slide 27: Competitive operating costs
Competitive operating costs 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 Optimisation S
Slide 28: Capital costs reduced
Capital costs reduced For personal use only Optimisation % Variance to Capital Cost Unit DFS Study DFS Initial Capital(1) $M 473 443 6% Sustaining Capital(2) $M 152 148 3% Initial capital cost revised down to $443M on 27 January 2015 • Resulted from increased competitiveness in cost inputs • Include
Slide 29: Nova cash costs lowest quartile
Nova cash costs lowest quartile Optimisation Study added value - reduced risk - future growth For personal use only Optimisation Study outcomes • 36% improvement on the overall Project Net Present Value • 27% reduction in expected C1 cash costs (after by-product credits) to $1.21/lb from $1.66/lb ni
Slide 30: Nova operational readiness
Nova operational readiness Building project capability since January 2015 Mining For personal use only • Contractor management, mine design, planning/scheduling and implementation of LOM systems Maintenance • Underground electrical installation and maintenance, operational maintenance as infrastruct
Slide 31: Nova in mine exploration
Nova in mine exploration Opportunities for additions to mining inventory prioritised Current status For personal use only • Underground drill positions available shortly • Drilling to be dovetailed with stope definition drilling program • Structural studies suggest preferred remobilised sulphide ori
Slide 32: Nova near mine exploration
Nova near mine exploration Near mine targets reviewed and prioritised Current status For personal use only • Effectiveness of previous EM surveys reviewed • Untested EM conductors being remodelled • Integrated geological and geophysical architecture on mining lease under development Next steps • Dri
Slide 33: Community
Community Close relationships with all local communities For personal use only Broader community • Transparent communications • Regular interaction • Working to create job opportunities in the region Traditional owners Esperance Community Open Day Feb 2016 • Implementing mining agreement • Actively
Slide 34: Generative exploration
Generative exploration Long term commitment to delivering organic growth For personal use only • Diverse greenfields and brownfields exploration projects • Targeting provinces that can deliver multiple gold and base metals projects • Portfolio includes belt scale projects with potential for Tier 1 a
Slide 35: IGO value proposition
IGO value proposition For personal use only Deliver Nova Project on time and on budget with first production in December 2016 Unlock scale and value at Tropicana throughout 2016 Maintain track record of consistent delivery to meet/beat guidance Focus on triple bottom line 35
Slide 36: Sustainability
Sustainability Continued strengthening and improvement across the business For personal use only First sustainability report released in 2015 IGO committed to: • Ethical business practices • Continual improvement in health, safety and environmental performance • Application of risk management strate
Slide 37: Concluding comments
Concluding comments Diversified mining company delivering cash flow and growth For personal use only Strong focus on cash management • Market prices for base metals offset within IGO’s diversified portfolio • Tropicana continues to deliver operationally and on growth projects • The $350M term loan i
Slide 38: As we go from strength to strength
AS WE GO FROM STRENGTH TO STRENGTH igo.com.au
Independence Group NL — Euroz Securities Institutional Conference 2016 on 6ix