Igo Limited · ASX:IGO
Igo — Independence Group NL — BMO Global Metals & Mining Conference 2019
34 slides from Igo's conference presentation, Feb 25, 2019
Slide 1: BMO Global Metals & Mining Conference
INDEPENDENCE GROUP NL BMO Global Metals & Mining Conference For personal use only Peter Bradford – Managing Director & CEO 24 – 27 February 2019 ASX:IGO / ADR:IIDDY 1
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: Purpose
For personal use only Purpose 4
Slide 5: Global warming: An increasingly critical global issue
For personal use only Global warming: An increasingly critical global issue • Trend away from fossil fuels to renewable energy • Strong government support globally for mass adoption of EVs and energy storage ─ Bans on conventional ICE vehicles in some city centres ─ Subsidies for EV manufacturers ─
Slide 6: Trend to Increased EV Numbers and More Nickel in EV Batteries
Trend to Increased EV Numbers(1) Trend to More Nickel in EV Batteries(3) For personal use only Global EV sales 2.1% (million units) 2.1% 20 9.0% 4.6% 13.8% 18 27.4% 30.4% 16 14 38% CAGR 12 10 30.2% 36.2% 71.9% 82.3% 8 73.1% 6 45% CAGR 4 2 28.3% 25.5% 0 8.4% 11.0% 10.9% 10.7% 11.0% 10.9% China Europe
Slide 7: Nickel to be a big winner from EV battery demand disruption
Nickel to be a big winner from EV Decreasing nickel stockpiles and battery demand disruption with 300- stainless steel demand growth to For personal use only 900kt of additional nickel required by maintain market supply deficit 2025(1) Nickel Market Supply/Demand Balance(2) Official Nickel Exchange
Slide 8: Our Purpose is Making a Difference
Our Purpose is Making a Difference by aligning the business to the structural shift to clean energy For personal use only Become a globally relevant supplier of metals that are critical to energy storage and renewable energy Be vertically integrated to produce battery grade chemicals and cathode pre
Slide 9: A Streamlined Core Portfolio
A Streamlined Core Portfolio Strategic focus on minerals critical For personal use only to energy storage and EV 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$M) 1) Macquarie Research – 31 Ja
Slide 10: Nova
For personal use only Nova 10
Slide 11: Nova de-risked
Nova de-risked • Successful first six quarters of For personal use only commercial production ─ 1.5Mtpa nameplate exceeded ─ Record production during 1H19 • Mine life sustained at 8 years with reserve marginally higher Nova Metal Production in Concentrate Tonnes A$/lb Payable 8,000 7,344 7,574 4.50
Slide 12: Nova Underground Mine Design & Drilling
Nova Underground Mine Design & Drilling Grade control and underground capital development substantially complete For personal use only 12
Slide 13: Directional Production and Cash Costs
Directional Production and Cash Costs For personal use only Strong outlook for Nova kt A$/lb payable • Consistent and higher production 30 3.0 rate expected next three years 2.5 • Main driver is higher grade stopes 20 2.0 in core of Nova and Bollinger • Assumes: 1.5 ─ 1.5Mtpa mining/processing rate
Slide 14: Nova Opportunity
For personal use only Nova Opportunity 14
Slide 15: Nickel sulphate for EV batteries
Nickel sulphate for EV batteries For personal use only • Produce nickel sulphate direct from Nova nickel concentrate • Technical feasibility confirmed with continuous pilot plant testwork • Pre-feasibility Study to be completed during 2H FY19 • Delivers potential for: ─ Higher payability ─ Premium p
Slide 16: Nova Near Mine Exploration
For personal use only Nova Near Mine Exploration • Potential to discover brownfields extensions to Nova system • A$12M commitment within Nova mining lease in FY19 • Leveraged multiple geophysical platforms including largest hard rock 3D seismic survey in Australia • Now drilling testing first seismi
Slide 17: Fraser Range Exploration
February 2018 For personal use only Fraser Range Exploration • Greenfields exploration targeting Nova style discoveries through systematic exploration over ~15,000km2 • 40 targets identified for drilling in 2019 • Technical success at Andromeda with Cu-Zn-Au-Ag discovery • Creasy Group Silver Knight
Slide 18: Widowmaker
For personal use only Widowmaker • Located immediately South of Silver Knight Discovery(2) (30km NE of Nova) • Five high-priority targets defined using EM and aircore drilling, including: ─ Ecliptic contains disseminated sulphides in aircore drilling ─ Solar is a Squid EM anomaly along strike from S
Slide 19: Tropicana
For personal use only Tropicana 19 19
Slide 20: Tropicana: increased production and lower costs in FY19
Tropicana: increased production For personal use only Tropicana Production (100%) & AISC and lower costs in FY19 Gold production (oz) AISC (A$/oz) 600,000 1,200 • 30% IGO & 70% AngloGold Ashanti (managers) 500,000 1,000 • 8.0Mtpa processing rate achieved 400,000 800 in 1H19 • 1H19 production of 262k
Slide 21: Tropicana Optimisation: Second ball mill delivering as planned
For personal use only Tropicana Optimisation: Second ball mill delivering as planned • Project successfully commissioned in 2Q19 as guided • Immediate increase in throughput rate and improvement in grind, resulting in improved gold recovery Throughput (tph) Throughput (t/op.h) Grind Grind (microns)
Slide 22: Tropicana Underground Potential
Tropicana Underground Potential For personal use only Boston Shaker Underground Development Layout (3) • Boston Shaker PFS completed in December 2018(1) -confirmed technical and financial viability of an underground development ─ Mining ~1Mtpa to produce ~100koz/year over a 7 year mine life ─ Capex
Slide 23: Tropicana mineralised system
Tropicana mineralised system For personal use only 1) Refer to IGO ASX release dated 20 Feb 2019: CY18 Mineral Resource & Ore Reserve Statement 23
Slide 24: Our Critical Enablers
For personal use only Our Critical Enablers 24
Slide 25: People & Culture: A key part of the IGO Difference
For personal use only People & Culture: A key part of the IGO Difference • Strong sense of purpose • Empowered people who are owners of the business • Focus on doing what is right – because we care • Collectively we are making a difference • Fostering the next generation of industry leaders 25
Slide 26: Sustainability & Safety
Sustainability & Safety Industry leading ESG reporting Key Lag Safety Metrics(1,2,4) For personal use only 6 2018 ACSI Rating of ASX200 Sustainability Reporting (5) 5 LTIFR 12 MMA 4 MTIFR 12 MMA Leading 3 Detailed 2 1 Moderate 0 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Basic Key Lead Safety Metrics
Slide 27: Innovating to unlock new opportunities
For personal use only Innovating to unlock new opportunities • Patented downstream processing technology to produce nickel sulphate for the battery market Technology • Implementation of remote stoping operations and remote firing from surface • First fully integrated commercial hybrid diesel/solar P
Slide 28: Commitment to Discovery with A$51M investment in FY19
Commitment to Discovery with For personal use only A$51M investment in FY19 • Best in class exploration and discovery capability • Greenfields focus to discover the mines of the future A$12.0M Nova Tropicana A$3.0M A$2.5M Long A$33.0M Greenfields, Generative & Other 28
Slide 29: Corporate & Financial
Corporate & Financial For personal use only 29
Slide 30: Financial Performance: Building Momentum
Financial Performance: Building Momentum Revenue & Other Income Underlying EBITDA(1) Net Cash from Operating Activities For personal use only A$(M) A$(M) A$(M) 450 426 250 180 167 163 400 205 160 355 356 200 350 140 300 120 111 150 133 131 250 223 100 198 200 100 80 82 150 69 60 52 100 50 40 26 50 2
Slide 31: Focus on high quality, long life assets that deliver great financial outcomes
Focus on high quality, long life For personal use only Share Ownership assets that deliver great financial Substantial Holders(1) Institutional Ownership(3) outcomes Mark Creasy 15% Australia 51% FIL 9% USA 17% ASX IGO T Rowe Price 8% Europe 4% Base Perth, WA CBA 6% ROW 3% Ausbil 5% Market Cap(1) A$
Slide 32: Capital Allocation to balance growth and cash returns to shareholders
Capital Allocation to balance growth For personal use only and cash returns to shareholders Capital to • New shareholder returns policy Capital to grow sustain the the business and ─ Cash return of 15-25% of FCF business and increase deliver ─ Strategy incorporates franked or underlying value consis
Slide 33: Concluding Comments
Concluding Comments For personal use only • Strong free cash generation and strengthening balance sheet • Nova and Tropicana delivering metal production within guidance • Transformational growth initiatives being successfully implemented • Assessment of downstream nickel sulphate opportunity nearing
Slide 34: Follow Us
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