Igo Limited · ASX:IGO
Igo — Independence Group NL — Q1 FY2020 Earnings Presentation
27 slides from Igo's earnings presentation, Oct 22, 2019
Slide 1: Independence Group NL 1Q20 Results Presentation
For personal use only Independence Group NL 1Q20 Results Presentation 22 October 2019
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 For personal use only securities in IGO or as an inducement to make an offer or invit
Slide 3: Competent Person's Statements
Competent Person’s Statements • Any references to IGO Mineral Resource and Ore Reserve estimates should be read in conjunction with IGO’s Annual Update of Exploration Results, Mineral Resources and Ore Reserves For personal use only dated 20 February 2019 (Annual Statement) and lodged with the ASX f
Slide 4: Safety
Safety Enduring commitment to safe work practices For personal use only Key Lag Injury Metrics(1,2) • Fatality resulting from incident which occurred at 5 Nova in September 2019: 4 ─ Involved employee of concentrate haulage contractor 3 2 ─ Occurred in final stages of securing load for transport 1 ─
Slide 5: 1Q20 Highlights
1Q20 FY19Highlights and 4Q19 Highlights Strong operational start to FY20 enhanced by higher metal prices For personal use only Nova metal production Revenue A$0.08 per share ahead of pro-rata A$263M dividend declared and guidance ▲ 29% QoQ paid Underlying EBITDA Nickel value optimisation Tropicana p
Slide 6: Financial Results
Financial Results Record quarterly revenue of A$263M, capitalising on higher nickel and gold prices For personal use only Units 4Q19 1Q20 QoQ Revenue and Other Income A$M 204.1 263.1 29% Underlying EBITDA(1) A$M 93.6 153.9 64% Profit After Tax A$M 30.1 66.0 119% Net Cash from Operating Activities A$
Slide 7: 1Q20 Cash Flow Reconciliation
1Q20 Cash Flow Reconciliation QoQ decline in cash due to dividend and scheduled debt repayment For personal use only A$M 500 450 26.5 19.7 400 20.8 6.4 0.9 1.2 69.5 28.6 350 47.3 300 250 200 348.2 150 321.2 100 50 - Cash at Nova FCF Tropicana FCF Exploration Payments for Corporate and Finance Costs
Slide 8: Net Profit after Tax
Net Profit after Tax NPAT growth driven by Nova performance For personal use only A$M 100 90 1.0 2.3 0.8 3.0 6.3 3.4 0.3 80 18.7 70 60 58.5 50 40 66.0 30 20 30.1 10 4Q19 NPAT Nova EBITDA Tropicana Long EBITDA Exploration Corporate Mark-to-market D&A Other Tax 1Q20 NPAT EBITDA EBITDA invest. • Nova E
Slide 9: Nova Nickel Operation
For personal use only Nova Nickel Operation 9
Slide 10: Nova
Nova Quarterly production exceeds guidance range for all metals For personal use only Metric Units 4Q19 1Q20 QoQ FY20 Guidance1 Nickel in concentrate t 7,906 7,724 (2%) 6,750 – 7,500 Copper in concentrate t 3,462 3,490 1% 2,750 – 3,125 Cobalt in concentrate t 280 282 1% 213 – 238 Cash cost (payable)
Slide 11: Nova Production
Nova Production Outstanding EBITDA margin of 70% For personal use only Nova Production Nova Cash Flow Reconciliation Tonnes A$/lb A$M 9,000 $3.00 140 8,000 $2.59 6.9 $2.50 120 $2.22 7,000 100 6,000 $1.94 $2.00 51.8 $1.50 5,000 80 $1.50 2.8 4,000 8,375 128.1 7,574 7,906 7,724 60 3,731 3,000 3,482 3,4
Slide 12: Nova Solar Farm
Nova Solar Farm First power expected during December 2019 quarter For personal use only 6MW solar PV facility fully integrated with diesel power plant Designed to deliver ~20% of Nova’s total energy requirements Break-even at diesel price of 65c/litre 12
Slide 13: Nova Value Optimisation
Nova Value Optimisation Parallel workstreams to deliver improved value from Nova nickel concentrate For personal use only Concentrate offtake Potential to negotiate Established reputation of agreement tender Nova concentrate quality improved commercial process terms Workstreams to be completed immin
Slide 14: Downstream Processing
Downstream Processing IGO Process designed to convert nickel sulphide concentrate into nickel sulphate For personal use only High metal extraction Lower cost (1) Lower emissions(1) Lower waste(1) 1) Compared to existing alternative processes to convert nickel concentrate to nickel sulphate 14
Slide 15: Tropicana Joint Venture
For personal use only Tropicana Joint Venture (IGO 30%, AngloGold Ashanti 70% and manager) 15
Slide 16: Tropicana Highlights
Tropicana Highlights Gold production at top end of guidance For personal use only Metric Units 4Q19 1Q20 QoQ FY20 Guidance(1) Gold produced (100%) koz 132.9 123.3 (7%) 112.5 – 125 Gold Sold (IGO 30%) koz 40.5 38.9 (4%) 33.7 – 37.5 Cash cost A$/oz 684 741 8% 700 – 780 AISC A$/oz 950 1,066 12% 1,090 –
Slide 17: Tropicana
Tropicana Consistent gold production and operating cash flows For personal use only Tropicana Production (100% ) and AISC Tropicana Cash Flow Reconciliation oz A$/oz A$M 160,000 $1,200 50 140,000 $990 1,066 45 5.9 $950 $848 $1,000 0.6 1.7 40 120,000 35 $800 100,000 30 80,000 $600 25 47.4 136,891 132
Slide 18: Tropicana Growth
Tropicana Growth Boston Shaker Underground Update For personal use only Development progressing in line with feasibility study Underground development of 987m at 30 September 2019 On track for first gold production during 1Q21 1) Refer to ASX release dated 28 March 2019: Tropicana Joint Venture Appr
Slide 19: Exploration
For personal use only Exploration 19
Slide 20: Nova
Nova Active quarter of drilling with successful identification of key Nova-style mineralisation For personal use only • Five diamond drill rigs active at and around Nova during the Quarter • Primary focus on area within 15km of Nova mining lease, testing 3D seismic features identified to be mafic/ul
Slide 21: Fraser Range
Fraser Range Drilling continues to confirm excellent prospectivity of the Fraser Range For personal use only • Regional aircore drilling around Themis and Pion continued to identify anomalous gold mineralisation • Drilling at Libra and Aries identified thick package of copper-zinc and iron sulphide
Slide 22: Lake Mackay
Lake Mackay Continuation of geophysics and drilling programs For personal use only • 31 drill holes testing 14 EM targets and 3 soil geochemical targets completed during the Quarter • Drilling at Arcee prospect intersected 12m @ 3.47g/t Au from 112m including 8m @ 4.94g/t Au from 116m(2) • DHEM at P
Slide 23: Kimberley Projects
Kimberley Projects Significant expansion of tenure within King Leopold and Halls Creek Orogens For personal use only • Landholding expanded to >11,500km2 via staking of open ground highly prospective for nickel, copper and cobalt • Expanded ownership and operatorship of Merlin and surrounding Quick
Slide 24: Tropicana Exploration
Tropicana Exploration Regional brownfields program underway For personal use only • 7,693m of drilling on regional targets during 1Q20 • Aircore drilling continues to confirm prospectivity around Southern Traverses target • Strong anomaly identified south-east of Sanpan 24
Slide 25: Summary
For personal use only Summary 25
Slide 26: Concluding Comments
Concluding Comments FY19 and 4Q19 Highlights Strong production and higher metal prices deliver a surge in earnings For personal use only Strong production and higher metal prices delivers record revenue and increased earnings Nickel value optimisation opportunities progressing Intensive drilling act
Slide 27: Making a Difference
For personal use only 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. O
Independence Group NL — Q1 FY2020 Earnings Presentation on 6ix