Igo Limited · ASX:IGO
Igo — Independence Group NL — Euroz Conference 2018
36 slides from Igo's conference presentation, Mar 13, 2018
Slide 1: Euroz Conference
INDEPENDENCE GROUP NL For personal use only EUROZ CONFERENCE Peter Bradford, Managing Director & CEO Discovery and Delivery 13 – 15 March 2018
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: Presentation Focus
Presentation Focus For personal use only • Strong first half result • Commitment to people, ESG and exploration • Tropicana • Nova • Nova and Fraser Range exploration • IGO alignment to EV mega trend 3
Slide 4: Robust balance sheet as focus shifts from construction to delivery and discovery
Robust balance sheet as focus shifts Share Ownership For personal use only Substantial Holders(1) Institutional Ownership(3) from construction to Mark Creasy 16% Australia 61% delivery and FIL T Rowe Price 9% 8% USA & Canada UK & Europe 28% 9% discovery CBA 6% ROW 2% Ausbil 5% Van Eck 5% ASX IGO Sha
Slide 5: Strong First Half Financial Results
Strong First Half Financial Results Balance sheet continues to strengthen with net debt reduced to A$120M For personal use only Units 1H18 1H17 Inc/(Dec) Revenue and Other Income A$M 354.8 223.1 59% Underlying EBITDA(1) A$M 133.4 81.8 63% Profit After Tax A$M 3.2 20.2 (84%) Net Cash from Operating A
Slide 6: Revenue and Underlying EBITDA Increased
Revenue and Underlying EBITDA Increased NPAT lower due to depreciation and amortisation charges from Nova For personal use only Revenue (A$M) NPAT (A$M) 400 60 355 350 50 300 274 40 250 219 223 200 166 20 150 20 14 100 3(2) 50 - - 1H14 1H15 1H16 1H17 1H18 Underlying EBITDA (A$M)(1) (20) 160 133 (40)
Slide 7: Strong Free Cash Flow Generation
Strong Free Cash Flow Generation Underpinned by Strong Tropicana result and commercial production at Nova For personal use only Underlying Free Cash Flow (A$M)(1) Net Cash (A$M) 100 150 75 80 60 41 100 92 40 20 - 50 (20) (22) (40) (44) (60) (49) - 1H14 1H15 1H16 1H17 1H18 (18) Operating Cash Flow (A
Slide 8: A Company with Purpose
For personal use only A Company with Purpose GEOGRAPHICAL QUALITY FOCUS Our purpose is to create long- term shareholder value through discovery, acquisition, development and operation of high-margin, long-life mining LONGEVITY SCALE projects diversified by commodity Acquire Discover Develop Operate
Slide 9: Right people in the right place at the right time
For personal use only Right people in the right place at the right time • Shaping the right culture • Nurturing the IGO Way • Developing the next generation of industry leaders 9
Slide 10: Embedded ESG performance & reporting in the business
Embedded ESG performance & reporting For personal use only Key Lag Safety Metrics(1,2,3) in the business 9.0 LTIFR 12 MMA 8.0 MTIFR 12 MMA ACSI Rating of ASX200 Sustainability Reporting(5) 7.0 6.0 5.0 Leading 4.0 3.0 Detailed 2.0 1.0 - Moderate Basic Key Lead Safety Metrics(4) 1.6 No Reporting 1.4 1
Slide 11: A$50M Commitment to Discovery in FY18
A$50M Commitment to For personal use only Discovery in FY18 Fraser Range A$10M Nova A$1.5M A$21M Tropicana A$4M Jaguar A$4.5M A$9M Long Other Greenfields 11
Slide 12: A Focus on Projects that Create a Solid Foundation
A Focus on Projects that For personal use only Create a Solid Foundation IGO EBITDA Profile (A$M)(1) 600 500 400 300 200 100 - FY12 FY13 FY14 FY15 FY16 FY17 FY18e FY19e FY20e Long (A$M) Jaguar (A$M) Tropicana (A$M) Nova (A$M) 1) Macquarie Research – 31 Jan 2018 12
Slide 13: Tropicana Gold Mine
For personal use only Tropicana Gold Mine 13
Slide 14: Tropicana
Tropicana • 330km NE of Kalgoorlie For personal use only • 465,000oz gold production (100%) at $1,115/oz AISC(1) • 10 year mine life remaining • Upside potential Tropicana Production (100%) & AISC koz A$/oz 160 1,400 1,229 1,286 140 1,167 1,200 120 939 1,000 100 800 80 600 60 400 40 20 200 - - 3Q17
Slide 15: Tropicana value drivers
Tropicana value drivers • Grade streaming drives For personal use only FY18-20 gold production Directional Production and AISC(1) and costs koz A$/oz 800 1,500 1,162 • Long Island underpins mine 700 1,000 life max 600 500 • Additional ball mill delivers 500 max max - min lift in scale and gold min m
Slide 16: Tropicana – 5km strike of mineralisation
Tropicana – 5km strike of mineralisation For personal use only 1) Refer to ASX release dated 7 Dec 2017: Tropicana JV Commits to Long Island and Increased Milling Capacity 16
Slide 17: Boston Shaker Underground Drilling
For personal use only Boston Shaker Underground Drilling(1) Upside opportunities • Boston Shaker underground study during CY18 • Future underground assessment at Havana and Havana South • Regional exploration along 160km of strike on 3,660km2 1) Refer to ASX release dated 7 Dec 2017: Tropicana JV Co
Slide 18: Nova
For personal use only Nova 18
Slide 19: Nova
Nova For personal use only • Delivers scale, low cost, long mine life and exploration upside • Commercial production from 1 July 2017 • Five years from discovery Nova Production (tonnes) 5,000 4,500 4,454 4,500 4,000 3,500 3,000 2,477 2,500 2,011 2,000 1,832 1,500 1,329 1,000 507 370 500 - 3Q17 4Q17
Slide 20: Nova is a shallow, thick, flat-lying orebody
Nova is a shallow, thick, flat-lying orebody delivering low development costs and low mining costs For personal use only Capital development to be substantially complete by end-FY18 20
Slide 21: Resource model being de-risked with grade control drilling
Resource model being de-risked with grade control drilling of Nova & Bollinger to be completed by end-FY18 For personal use only 21
Slide 22: Nova near mine exploration search space
Nova near mine exploration search space is wide open with focus to date on Nova/Bollinger resource envelope For personal use only Using science (3D Seismic) to understand where to target drilling 22
Slide 23: Understanding the potential extensions of the Nova intrusive
For personal use only Understanding the potential extensions of the Nova intrusive • 58km2 3D seismic program over mining lease • Drilling 3D seismic targets in FY19 • Continued drilling of extension to intrusive to the NW of Nova 23
Slide 24: 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 25: Systematic exploration over 14,300km2 of consolidated tenure
February 2018 For personal use only Systematic exploration over 14,300km2 of consolidated tenure • Multiple EM platforms • Bedrock geochem using Aircore • Gravity survey & mapping • Follow up RC/DDH 25
Slide 26: LME Nickel Versus Nickel Sulphate
LME Nickel Versus Nickel Sulphate(1,2) US$/t Downstream For personal use only 20,000 18,000 processing potential • Produce nickel and cobalt 16,000 sulphates for EV batteries 14,000 • Metallurgical testwork commencing in 3Q18 12,000 • Targeting PFS completion 10,000 around end-CY18 8,000 • Delivers
Slide 27: Nova & Fraser Range aligned to the EV mega trend
For personal use only Nova & Fraser Range are uniquely aligned to the mega trend of growing demand for metals in EVs 1) Source: West Australian Newspaper, 10 Mar 2018 27
Slide 28: Changing EV battery chemistry will boost Ni demand
Changing EV battery For personal use only chemistry will boost Ni demand • 24kg nickel, 24kg cobalt & 91kg copper in a 2017 Chevy Bolt(1) For 811 NMC chemistry in a Bolt(2) • Nickel increases by 15kg • Cobalt decreases by 17kg 1) Source data: UBS Research titled Electric Car Teardown – Disruption Ah
Slide 29: Nickel to be a big winner from EV demand disruption
For personal use only Nickel Mine Supply by Product (kt)(1) Nickel to be a big Ni ktpa 2018E supply Ni ktpa winner from EV deficit of 3,500 3,000 167kt(2) 3,500 3,000 demand disruption • Market in deficit in 2016 & 2,500 2,500 2,000 2,000 1,500 1,500 2017 1,000 1,000 500 500 • Synchronous growth in
Slide 30: The world is changing: electric vehicles will be a disruptive force
The world is changing: electric vehicles will be a disruptive force For personal use only 1) Source: Glencore Investor Update, 12 Dec 2017 30
Slide 31: Jaguar, Long & Lake Mackay
For personal use only Jaguar, Long & Lake Mackay 31
Slide 32: Jaguar
Jaguar • Improving performance For personal use only • Depth extensions at Bentley • New deposit at Triumph • Regional exploration Jaguar Production (tonnes) 10,000 8,105 8,000 7,399 6,599 6,885 6,000 4,000 2,000 1,121 688 530 591 - 3Q17 4Q17 1Q18 2Q18 Zinc in concentrate Copper in concentrate 32
Slide 33: Long
Long • Solid and consistent performer For personal use only • Greenfields exploration continuing • Care and maintenance planning • Final mining 31 May 2018 Long Life of Mine Production & Grade Ni t Ni% 16,000 Metal (Ni t) 5.00% 14,000 4.50% 4.00% 12,000 3.50% 10,000 3.00% 8,000 2.50% 6,000 2.00% 1.5
Slide 34: Lake Mackay: first diamond drilling at Grapple
Lake Mackay: 12,800km2 belt scale greenfields exploration project For personal use only First diamond drilling at Grapple(1,2) • Six holes completed for 2,917m • Multiple narrow sulphide intervals in all holes • Hole 1 returned two mineralised intersections • Soil sampling completed with pervasive g
Slide 35: Concluding Comments
Concluding Comments For personal use only • Strong first half result with $44M reduction in net debt • Nova beats guidance mid- point in first six months commercial production • Tropicana production and costs all better than guidance • Long & Jaguar in guidance • Focused on delivery and discovery 35
Slide 36: For personal use only
OFOLLOW US LILAS WE GO FROM STRENGTH TO STRENGTH igo.com.au