Igo Limited · ASX:IGO
Igo — Investor Day (July 2022)
66 slides from Igo's investor day presentation, Jul 29, 2022
Slide 1: Strategy Day Presentation ASX Release
ASX RELEASE 29 JULY 2022 STRATEGY DAY PRESENTATION For personal use only IGO Limited (ASX: IGO) (IGO or the Company) is pleased to attach presentation materials which will be used at a Strategy Day event being held this weekend in conjunction with site visits to the Kwinana Lithium Refinery (Kwinana
Slide 2: 2022 Strategy Day Presentation
For personal use only IGO Limited 2022 Strategy Day Presentation 30 July 2022
Slide 3: Cautionary Statements & Disclaimer
Cautionary Statements & Disclaimer • This presentation has been prepared by IGO Limited (“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 those secu
Slide 4: Our Business
For personal use only Our Business 3
Slide 5: Our Strategy
Our Strategy Our Purpose of Making a Difference has underpinned our strategy For personal use only 4
Slide 6: Our Values
Our Values Embody the IGO Purpose of Making a Difference For personal use only 5
Slide 7: Our Transformation Journey
Our Transformation Journey Aligned our portfolio to benefit from the clean energy revolution For personal use only DIVERSIFIED (GOLD & BASE METALS FOCUS) CLEAN ENERGY METALS FOCUS Rebuild of exploration team Divestment of Tianqi Lithium Joint Acquisition of Nova Acquisition & portfolio Jaguar Operat
Slide 8: Our Portfolio Transformation
Our Portfolio Transformation Key transactions have delivered a 100% clean energy metals focused portfolio For personal use only Tianqi Lithium JV Tropicana Divestment Silver Knight Acquisition Western Areas Acquisition Investment December 2020 April 2021 July 2021 June 2022 Acquired a 25% interest i
Slide 9: Our Portfolio
Our Portfolio Diverse, Australian based clean energy metals portfolio with a pipeline of growth For personal use only • Nova (Ni, Cu, Co) • Forrestania (Ni) Production • Greenbushes (Li2O) • Kwinana (LiOH) • Cosmos Development • Greenbushes (Expansion) • Kwinana (Train 2) • Silver Knight Feasibility
Slide 10: Our focus on ESG
Our focus on ESG Continued our commitment to leading performance and reporting For personal use only Dow Jones Sustainability Australia Index Dow Jones Sustainability Asia Pacific Index S&P Global 2022 Sustainability Yearbook ESG Reporting FTSE4 Good Developed consistently rated as Index inclusion 2
Slide 11: Strategic Priorities for FY23
Strategic Priorities for FY23 Leveraging our expanded platform for growth For personal use only Effectively integrate Leverage the growth Maximise potential for Maintain our focus on Cosmos and Forrestania opportunity within our discovery success people and sustainability portfolio into IGO lithium
Slide 12: Market Overview
For personal use only Market Overview 11
Slide 13: Supplying Products Critical to Clean Energy
Supplying Products Critical to Clean Energy Focused on delivering products that will enable electrification and decarbonisation For personal use only Ni Li Cu Co Nickel Lithium Copper Cobalt Upstream mining and downstream processing Electrification of Renewable Energy Renewable Energy Transport Stor
Slide 14: Nickel and Lithium
Nickel and Lithium Key beneficiaries of an electrified future For personal use only EV demand acceleration is putting pressure on supply in the medium to long term Limited new development projects/discoveries in the pipeline The next generation of projects come with inherent ESG concerns 13
Slide 15: Electric Vehicle Demand
Electric Vehicle Demand Demand growth accelerating rapidly For personal use only Global Electric Vehicle Sales & Market Share1 Million Vehicles Market share (%) 30 20 EV sales doubled from 2020 to 2021 to 8.6M units CAGR: ~49% CAGR: ~30% 18 (2012 – 2021) (2021 – 2025) 25 16 14 20 12 EV battery deman
Slide 16: Lithium-ion Battery Demand
Lithium-ion Battery Demand The electrification of transport is driving significant new metal demand For personal use only Lithium-ion Battery demand outlook – by application1 Lithium-ion battery metal demand outlook2 GWh/year Million metric tons 10 6,000 9 8 5,000 7 6 5 4,000 4 3 3,000 2 1 0 2,000 2
Slide 17: Nickel
Nickel Near term surplus transitions quickly into deficits For personal use only Primary Nickel Supply/Demand Balance 1 200 Near term Indonesian supply increases will drive surplus until 2025 150 100 New nickel supply needed from ~2026 as EV 50 demand accelerates in excess of supply 0 -50 1.5Mt nick
Slide 18: Lithium
Lithium Market deficits expected to continue to support higher pricing For personal use only Spodumene Market Balance1 (kt LCE) Forecast refined lithium battery-grade balance (kt LCE) 2 1,000 2,000 900 1,800 800 1,600 700 1,400 600 1,200 500 1,000 400 800 300 600 200 400 100 200 0 0 Supply (base cas
Slide 19: Lithium Pricing
Lithium Pricing Recent lithium price movements have been significant For personal use only Spodumene Concentrate Price1 $US/tonne Recent spot pricing is > 8x higher than IGO’s 6000 assumed long term price at the time of the Tianiqi JV agreement 5000 4000 Lithium Transaction Agreed (October 2020) Sus
Slide 20: Financial Summary
For personal use only Financial Summary 19
Slide 21: 4Q22 Financial Results
4Q22 Financial Results Operational performance from Nova and Greenbushes delivered a strong finish to FY22 For personal use only Units 4Q221 3Q221 QoQ1 FY22 Sales Revenue A$M 277.9 245.5 ▲ 13% 900.6 Underlying EBITDA2 A$M 258.4 232.6 ▲ 11% 716.9 Net Profit After Tax A$M 107.2 133.0 ▼ 19% 330.9 Net C
Slide 22: 4Q22 NPAT Reconciliation
4Q22 NPAT Reconciliation Expected Western Areas transaction related costs drove QoQ decrease in NPAT result A$M For personal use only 180 7.7 160 1.0 38.2 140 65.7 120 100 19.6 0.7 4.9 80 44.9 41.3 133.0 60 107.2 40 20 - 3Q22 NPAT Nova Exploration Corporate & Acquisition Mark-to- Share of Net Financ
Slide 23: 4Q22 Cash Flow Reconciliation
4Q22 Cash Flow Reconciliation Net debt of A$533M following Western Areas acquisition For personal use only A$M 1,800 1,600 1,400 1,200 900.0 1,000 1,262.5 800 70.7 18.4 5.2 5.3 10.2 18.8 600 209.0 400 28.3 94.0 1.9 200 440.2 367.1 - Cash at Nova FCF TLEA Dividend Western Areas Exploration & Payments
Slide 24: Our Nickel Business
For personal use only Our Nickel Business 23
Slide 25: Our Nickel Business
Our Nickel Business Quality portfolio of production, development & exploration assets with downstream potential For personal use only Downstream Nova Cosmos Forrestania Exploration Nickel Sulphate High quality, low cost High quality Operating underground Focused on discovery Opportunity to value nic
Slide 26: Nova Nickel Operation
Nova Nickel Operation Consistent operational and financial performance over FY22 For personal use only Nova Production & Cash Costs Tonnes A$/lb FY22 nickel production within guidance; cash 9,000 $2.50 costs below guidance 8,000 $2.24 $1.99 $1.86 $2.00 7,000 6,000 Stronger nickel prices delivering e
Slide 27: Nova Nickel Operation
Nova Nickel Operation Multiple opportunities to optimize and maximise value For personal use only Delivered ~$A5M savings to operating cost in FY22 Culture of Continued focus for FY23 with numerous business improvement Continuous programs in place including: Improvement • Solar farm extension + batt
Slide 28: Silver Knight
Silver Knight Development project to deliver additional feed to Nova For personal use only Feasibility Study underway to assess Silver Knight as secondary (open-pit) ore source for Nova Infill and extension RC drilling program completed during 4Q22 to support the Feasibility Study Planning underway
Slide 29: Forrestania Nickel Operation
Forrestania Nickel Operation 4Q22 production impacted by COVID-19 related absenteeism For personal use only Forrestania Production & Cash Costs Tonnes A$/lb Lower volumes of high-grade ore mined during June 4,500 $10.00 Quarter due to COVID-19 $7.87 $7.46 4,000 $8.54 $8.46 $9.00 $8.00 3,500 $7.00 3,
Slide 30: Forrestania Nickel Operation
Forrestania Nickel Operation Assess further nickel and lithium upside until closure in FY25 For personal use only Optimise and maximise cashflow and profitability over remaining mine life Opportunity to leverage some learnings and practices from Nova Opportunity for synergies between Nova and Forres
Slide 31: Cosmos
Cosmos IGO completing Cosmos development optimisation strategy and plan For personal use only First concentrate production deferred from late 2022 to mid-2023 Deferral will provide additional time to: • Ensure shaft completion • Complete more mine development to enable multiple ore sources • Expansi
Slide 32: Cosmos Nickel Operation
Cosmos Nickel Operation Unlocking further upside from Cosmos tenements For personal use only Mt Goode Deposit • Large, low-grade disseminated nickel sulphide ore body • Potential open pit mining operation • Scoping Study ongoing, expected completion by mid-2023 Highly prospective underground and bro
Slide 33: Nickel Operations FY23 Guidance
Nickel Operations FY23 Guidance For personal use only Nickel1 Copper Cobalt Cash Costs2 Capex3 Nova 24 - 27kt 11 - 12kt 0.9 - 1.0kt 2.60 - 3.00/lb 19 - 26 Forrestania 10.5 - 12.5kt - - 7.50 - 8.50/lb 11 - 12 Total 34.5 - 39.5kt 11 - 12kt 0.9 - 1.0kt 4.10 - 4.70/lb 28 - 38 Note: FY23 guidance for Cos
Slide 34: Downstream Processing
Downstream Processing A disruptive process designed to convert nickel sulphide concentrate into nickel sulphate For personal use only Assessing opportunity for downstream processing in conjunction with Wyloo Metals Feasibility Study has commenced with outcomes expected by 2024 Significant opportunit
Slide 35: Downstream Processing
Downstream Processing A low cost, low emission, low waste process flow sheet For personal use only 34
Slide 36: Our Lithium Business
For personal use only Our Lithium Business 35
Slide 37: Our Lithium Business
Our Lithium Business Building a global and integrated lithium business For personal use only Greenbushes Mine Kwinana Refinery Product Marketing Exploration TLEA 51% (IGO:25%) TLEA 100% (IGO:49%) World’s lowest cost and Australia’s first fully Strong relationships with Collaborating with joint highe
Slide 38: Tianqi Lithium Energy Australia
Tianqi Lithium Energy Australia Exclusive global (ex-China) joint venture to explore lithium opportunities For personal use only IGO’s investment into TLEA was well timed, with spodumene prices rising significantly since deal closure 49% Tianqi Lithium Energy Australia 51% TLEA High levels of collab
Slide 39: Greenbushes Lithium Operation
Greenbushes Lithium Operation Expanding concentrate production capacity to meet demand Technical Grade Plant Chemical Grade Plant Chemical Grade Plant Tailings Retreatment Project Chemical Grade Plant For personal use only (TGP) (CGP1) (CGP2) (TRP) (CGP3) Status Construction Producing Producing Prod
Slide 40: Greenbushes Lithium Operation
Greenbushes Lithium Operation Strong ramp up of operations over FY22 delivered production and cost within guidance For personal use only FY22 FY22 Greenbushes Production and Cost of Goods Sold Units Result Guidance kt A$/t sold 400 $300 Spodumene Concentrate Production1 kt 1,138 1,100 to 1,250 350 $
Slide 41: Kwinana Lithium Hydroxide Refinery
Kwinana Lithium Hydroxide Refinery Australia’s first fully-automated lithium hydroxide refinery For personal use only Lithium Hydroxide Production Converts spodumene concentrate from Greenbushes Capacity (ktpa) (100%) into battery grade lithium hydroxide Option to add Train III and IV in the future
Slide 42: Financial Summary
Financial Summary FY22 was the first year of IGO’s investment in the TLEA JV 1Q22 2Q22 3Q22 4Q22 FY22 For personal use only Greenbushes Revenue/Expense Summary (100%): Sales Revenue (A$M) 240 222 546 867 1,880 EBITDA (A$M) 148 123 428 650 1,349 Exploration (A$M) 1 1 1 2 5 Sustaining & Improvement Ca
Slide 43: Lithium Joint Venture Dividend and Accounting Information
Lithium Joint Venture Dividend and Accounting Information FY22 EBITDA - NPAT Reconciliation For personal use only A$M Dividends 1,600 Greenbushes Kwinana 1,400 Quarterly distributions from Greenbushes 1,200 and TLEA 1,000 800 Dividends from TLEA expected to be 1,349 franked, enabling IGO to pass on
Slide 44: Lithium Operations FY23 Guidance
Lithium Operations FY23 Guidance For personal use only FY23 Guidance Greenbushes Lithium Mine Spodumene Production (100%) kt 1,350 to 1,450 Cost of Goods Sold (ex-royalties) A$/t 225 to 275 Capex (Sustaining, Improvement and deferred waste) A$M 420 to 480 Kwinana Lithium Hydroxide Refinery Lithium H
Slide 45: Exploration and Discovery
For personal use only Exploration and Discovery 44
Slide 46: Exploration
Exploration Retained our commitment to exploration and discovery in FY23 For personal use only A$75M budgeted exploration expenditure across the expanded portfolio Key priorities include: • Drilling nickel targets around Nova and Silver Knight, including Silver Knight South • Drilling nickel targets
Slide 47: Near Nova and Fraser Range
Near Nova and Fraser Range High levels of drilling activity underway For personal use only Focused on the discovery of Nova and Silver Knight style magmatic Ni-Cu-Co sulphide deposits Mafic-ultramafic rocks continue to be encountered in most drill holes, several host some form of magmatic sulphides
Slide 48: Paterson Project
Paterson Project Targeting sediment hosted copper in a re-emerging belt For personal use only Highly prospective region as evidenced by Nifty, Telfer, Winu, Havieron IGO is building basin framework and targets with various geophysical and geochemical programs Soil sampling, drill testing and new geo
Slide 49: Kimberley Project
Kimberley Project Targeting orthomagmatic Ni-Cu mineralisation For personal use only Searching for Savannah sized deposits with Merlin-like grades Reanalysing DeBeers database samples with latest TIMA technology FY23 focus on the Sentinel target area 48
Slide 50: People & Culture
For personal use only People & Culture 49
Slide 51: People & Culture
People & Culture We are proud of the unique culture we have cultivated over many years For personal use only We consider culture as a key enabler of our strategy Our culture enhances employee engagement and is a key driver of our efforts to attract and retain the best people Active culturing program
Slide 52: Our People
Our People Key focus areas For personal use only Employee Value Holistic Wellbeing Sexual Harassment Safety Proposition • Multi-angle approach • Focusing on • Ensuring our internal • Enduring commitment to attracting and enhancing the practices and training to safety across the retaining the best ph
Slide 53: Safety
Safety Zero HPI and SPIs during the June quarter | Continued improvement in lead indicators Lag Safety Indicators (TRepIFR1 & SPIFR2) Lead Safety Indicators For personal use only 20 7 500 19 450 6 18 400 17 5 350 16 15 300 4 14 250 13 3 200 12 2 150 11 100 10 1 50 9 8 0 0 Jun-20 Sep-20 Dec-20 Mar-21
Slide 54: Employee Engagement
Employee Engagement 2022 Engagement Survey Results demonstrated broad improvement in key metrics For personal use only Employee Engagement Score 74% ▲7% YoY Pride in working for IGO 89% ▲2% YoY Motivated to “go the extra mile” 77% ▲7% YoY IGO’s purpose and goals provide meaningful direction to 78% ▲
Slide 55: Diversity and Inclusion
Diversity and Inclusion Focus on building a culture of inclusion and belonging For personal use only Female Employment 29% Aboriginal Employment 5.2% Percentage of IGO people say that IGO 89% values diversity Percentage of IGO people say that IGO is 89% inclusive and accepting of diverse backgrounds
Slide 56: Aboriginal Employment
Aboriginal Employment Maximising opportunities for Traditional Owners to join IGO in Making a Difference For personal use only Five Ngadju trainees currently rotating through the business as part of the IGO Ngadju Trainee Program. Plans in place for FY23 intake. Cross-cultural awareness training acr
Slide 57: Managing the skills shortage
Managing the skills shortage Responding appropriately to attract and retain the best people For personal use only Culture, Culture, Culture Attractive employee benefits Focus on learning and development IGO was 4th best place to work in the Mining, Utilities and Agriculture industry in 2022 56
Slide 58: Sustainability & Community
For personal use only Sustainability & Community 57
Slide 59: Sustainability at IGO
Sustainability at IGO New model in 2021 revolving around seven key pillars For personal use only Sustainability is fully integrated into IGO’s strategy and culture Our approach is driven by IGO's Sustainability Framework Focused on meeting the needs of the present without compromising the ability of
Slide 60: Materiality Assessment
Materiality Assessment Comprehensive review undertaken during FY22 For personal use only Focused on “what matters” to our stakeholders Materiality assessed via extensive engagement with stakeholders Assessment in line with GRI 59
Slide 61: IGO's Response to Climate Change
IGO’s Response to Climate Change Aspiration to be carbon neutral by 2035 For personal use only Internal carbon price adopted at A$60/tonne CO2e1 Commitment to understanding Scope 3 emissions Emissions reduction programs underway targeting Scope 1 & 2 emissions Developing a portfolio of carbon remova
Slide 62: Reducing our Carbon Footprint
Reducing our Carbon Footprint Committed to playing our part to reduce greenhouse gas emissions For personal use only Enhanced understanding Emissions Reductions Adopting an Internal Carbon removal and of total carbon footprint Programs Carbon Price offsets • Focused on assessing • Four key programs
Slide 63: Cultural Heritage Management
Cultural Heritage Management IGO ensures pro-active engagement with Traditional Owners prior to accessing land For personal use only IGO is a significant tenement holder across northern and Western Australia, and is engaged with multiple Native Title holder and Traditional Owner groups Actively work
Slide 64: Conclusion
For personal use only Conclusion 63
Slide 65: Concluding Remarks
Concluding Remarks Well positioned to leverage from disruptive transition to clean energy For personal use only Purpose led strategic focus on clean energy metals People centric business delivering a great culture Sustainability embedded into the DNA of the business with proactive response to climat
Slide 66: 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