Igo Limited · ASX:IGO
Igo — Independence Group NL — 1H FY2019 Earnings Presentation
20 slides from Igo's earnings presentation, Jan 31, 2019
Slide 1: 2Q19 and First Half Results Presentation
INDEPENDENCE GROUP NL 2Q19 and First Half Results Presentation For personal use only Strong Production and Improved Cash Costs 31 January 2019 ASX:IGO / ADR:IIDY 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 2018 Mineral Resource and Ore Reserve announcement dated 26 July 2018 For personal use only and lodged with the ASX for which Competent Person’s consents were obt
Slide 4: 2Q19 and 1H19 Highlights
2Q19 and 1H19 Highlights Record 2Q19 production at Nova and Tropicana 1H19 Audit Reviewed Financials For personal use only • Underlying EBITDA A$131M • Cash A$208M and debt A$114M • Fully franked FY18 final dividend of 2 cents paid • Fully franked FY19 interim dividend of 2 cents to be paid 1 March
Slide 5: Safety
Safety Consistently improving workplace safety Key Lag Injury Metrics(2,3) For personal use only IGO continues to focus on reducing the number 6 of Serious Potential Incidents(1) 5 LTIFR 12 MMA 18 4 MTIFR 12 MMA 16 3 14 2 12 10 1 8 0 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 6 4 Key Lead Safety Metr
Slide 6: 2Q19 Financial Results
2Q19 Financial Results Underlying EBITDA steady despite commodity price pullback For personal use only Units 1Q19 2Q19 QoQ Revenue and Other Income A$M 167.4 189.0 13% Underlying EBITDA(1) A$M 62.9 67.6 7% Profit After Tax A$M 0.2 0.7 283% Net Cash from Operating Activities A$M 108.1 54.8 (49%) Unde
Slide 7: 2Q19 Cash Flow Reconciliation
2Q19 Cash Flow Reconciliation 18% increase in cash on hand For personal use only A$M 250 2 15 8 29 3 10 0 200 17 150 100 208 176 50 - Cash at Nova FCF Tropicana FCF Long FCF Exploration Corporate & Finance costs Proceeds from Payments for Cash at 30 Sept 2018 Other Cash Flow sale of Investments 31 D
Slide 8: 1H19 Financial Results
1H19 Financial Results Strong FCF and strengthened balance sheet For personal use only Units 1H18 1H19 Inc/(Dec) Revenue and Other Income A$M 354.8 356.4 - Underlying EBITDA(1) A$M 133.4 130.5 (2)% Profit After Tax A$M 3.2 0.9 (72%) Net Cash from Operating Activities A$M 111.4 163.0 46% Underlying F
Slide 9: 1H19 Cash Flow Reconciliation
1H19 Cash Flow Reconciliation Operations generated strong cash flows for the period For personal use only A$M 300 4 28 250 47 10 8 1 13 12 29 12 200 88 150 100 208 139 50 - Cash at 30 Nova Tropicana Long Exploration Investments Proceeds Proceeds Corporate & Finance Debt Dividends Cash at 31 Jun 2018
Slide 10: 1H19 Segment Financial Results
1H19 Segment Financial Results Nova contribution at nameplate in 1H19 following ramp up from 1H18 For personal use only Operation Metric 1H18 1H19 Change Inc/(Dec) Revenue 124.8 215.1 90.3 72% Nova Underlying EBITDA(1) 59.7 94.0 34.3 57% Free Cash Flow(2) 2.8 88.4 85.6 3,057% Revenue 127.5 136.4 8.9
Slide 11: Nova: Record production and improved cash costs
Nova Record production and improved cash costs Tonnes Nova Production A$/lb For personal use only 9,000 2.78 3.00 2.68 Metric Units 1Q19 2Q19 1H19 Guidance(1) 8,000 7,574 7,344 6,854 2.50 Nickel in concentrate t 6,854 7,574 14,428 13,500 - 15,000 7,000 5,961 6,000 2.00 Copper in concentrate t 3,019
Slide 12: Tropicana: Production up and cash costs down
Tropicana Production up and cash costs down For personal use only Tropicana Metric Units 1Q19 2Q19 1H19 Guidance(1) oz Production (100%) and AISC A$/oz 160,000 1,200 Gold produced (100%) koz 125.1 136.9 262.0 250.0 – 275.0 1,093 1,076 1,040 140,000 1,000 Gold Sold (IGO 30%) koz 35.1 42.9 78.0 75.0 –
Slide 13: Combined Mill Throughput
Combined Mill Throughput Throughput (t/op.h) (tph) Tropicana 980 Second Ball Mill 960 4% increase For personal use only 940 • Second ball mill successfully commissioned 920 late November 2018 900 ─ Delivered as guided 880 Nov Dec ─ Immediate impact on throughput, grind size Grind Size Grind(P80) (mi
Slide 14: Tropicana: Boston Shaker PFS complete
Tropicana Boston Shaker PFS complete(1) For personal use only Boston Shaker Underground Development Layout(1) • PFS confirmed the technical and financial viability of an underground development ─ PFS based on delivering ~1Mtpa of resources to produce in the order of 100,000oz/year over a 7 year mine
Slide 15: Fraser Range exploration targets identified for drill testing in 2019
Fraser Range Exploration 40 targets identified for drill testing in 2019 For personal use only Includes 5 targets at Widowmaker concession(1) - immediately South of Silver Knight Discovery(2) (30km NE of Nova) • Drilling and EM surveying upgrade prospectivity • Five high-priority targets defined inc
Slide 16: Lake Mackay: New drill targets defined
Lake Mackay New drill targets defined During the Quarter, IGO completed the For personal use only earn-in component of the Lake Mackay JV with Prodigy Gold NL • IGO is now 70% holder and JV operator • Spectrem airborne EM completed over majority of granted tenements • 8 bedrock conductors prioritise
Slide 17: Nickel Sulphate: Downstream processing opportunity
Nickel Sulphate Downstream processing opportunity For personal use only Pre-feasibility study well advanced • Trade-off studies • Metallurgical test work • Engineering • Capital and operating cost estimation Additional de-risking incorporated in Pre- feasibility study • Decision to further de-risk p
Slide 18: Capital Allocation
Capital Allocation Policy to balance growth and cash return to shareholders IGO will adopt a new shareholder returns policy For personal use only • Aim to return 15-25% of FCF to shareholders • Capital returns include consistent franked or Capital to unfranked dividends, special dividends and share
Slide 19: Concluding Comments
Concluding Comments Strong production and reduced operating costs For personal use only • Great 2Q19 and 1H19 ─ Net cash of A$94M ─ Fully franked interim dividend of 2 cents per share • Record result for Nova in 2Q19, an 11% increase in nickel production and 30% reduction in cash cost QoQ • Tropican
Slide 20: For personal use only
“FOLLOW US» UAS WE GO FROM STRENGTH TO STRENGTH igo.com.au
Independence Group NL — 1H FY2019 Earnings Presentation on 6ix