Slide 1: Third Quarter 2018 Results Presentation
INDEPENDENCE GROUP NL For personal use only Third Quarter 2018 Results Presentation Investor Information Booklet ASX:IGO / ADR:IIDY 2 – 4 May 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: Robust balance sheet as focus shifts from construction to delivery and discovery
Robust balance sheet as focus shifts from For personal use only Share Ownership construction to delivery Substantial Holders(1) Institutional Ownership(3) Mark Creasy 16% Australia 66% and discovery FIL 9% USA 21% T Rowe Price 8% UK & Europe 10% CBA 6% ROW 3% ASX IGO Ausbil 5% Base Perth, WA Share P
Slide 4: A Focus on Projects that Create a Solid Foundation
A Focus on Projects that Create a Solid Foundation For personal use only 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 4
Slide 5: 3Q18 Highlights
3Q18 Highlights Strong free cash flow significantly reduces net debt to A$73M For personal use only • Nova delivers nameplate 1.5Mtpa mining rate for 3Q18 and an increase in nickel grade to 1.85% ─ Production from three stopes at Bollinger • Tropicana and Long metal production in line with expectati
Slide 6: Sustainability
Sustainability Focused on better outcomes for our people Key Lag Safety Metrics(1,2,3) For personal use only • Lost time injury reduced from 2.61(4) to 1.97 9.0 with one lost time injury recorded for 3Q18 8.0 7.0 LTIFR 12 MMA • No material environmental incidents 6.0 MTIFR 12 MMA 5.0 • Active engage
Slide 7: Strengthening Financial Results
Strengthening Financial Results EBITDA up 14%, strong free cash flow of A$57M and net debt reduced to A$73M For personal use only Units 2Q18 3Q18 YTD QoQ Revenue and Other Income A$M 207.3 182.7 537.5 (12%) Underlying EBITDA(1) A$M 64.5 73.7 207.1 14% Profit (Loss) After Tax A$M (1.5) 9.2 12.4 n.a N
Slide 8: 3Q18 Cash Flow Reconciliation
3Q18 Cash Flow Reconciliation Total free cash flow from Operations was A$71M For personal use only A$M 140 120 1 5 9 3 16 0 3 100 29 80 52 6 2 60 40 70 51 20 - Cash at 31 Nova FCF Tropicana Jaguar FCF Long FCF Exploration & Corporate & Proceeds Payments for Debt Dividends Net Finance/ Cash at 31 Dec
Slide 9: Nova
For personal use only Nova 9
Slide 10: Nova: Low cost Ni – Cu – Co mine
Nova Low cost Ni – Cu – Co mine For personal use only 1.5Mtpa underground mine and Overview processing plant Resource(1) 271,000t Ni, 113,000t Cu, 9,000t Co Reserve(1) 274,000t Ni, 110,000t Cu, 9,000t Co Production Guidance FY18 23,000 – 27,000t Ni (contained metal in 10,000 – 12,000t Cu concentrate
Slide 11: Nova
Nova Mining for 3Q18 was in line with the 1.5Mtpa nameplate production rate For personal use only Tonnes Metric Units 2Q18 3Q18 YTD Guidance(1) Nova Production 7,000 Nickel in concentrate t 4,454 5,961 14,914 17,250 – 20,250 6,000 5,961 Copper in concentrate t 2,011 2,472 6,315 7,500 – 9,000 5,000 4
Slide 12: Nova Grade Control
Red traces = Remaining Diamond drilling Nova Grade Control(1) Early de-risking of mineral resource For personal use only • Grade control drilling of the Nova- Bollinger orebodies continued ─ A total of 26,887m drilled during 3Q18 • Three Diamond drill rigs demobilised in February and March 2018 ─ Tw
Slide 13: Nova Mining Lease Exploration
Nova Mining Lease Exploration Largest 3D seismic program undertaken in Australia For personal use only 58km2 3D seismic survey contracted to HiSeis advanced significantly during 3Q18 • Field data collection expected to be complete in May 2018 c.1,700m of Reverse Circulation and Diamond drilling comp
Slide 14: Evolving EV battery chemistry
Evolving EV battery For personal use only chemistry designed to • Improve battery performance • Reduce overall cost • Cathode component ~18% of battery cost(1) • Enhance EV penetration 1) Source data: Citi EV’s putting the pedal to the metal 31 October 2017 14
Slide 15: Nickel to be a big winner from EV demand
For personal use only Nickel Mine Supply by Product (kt)(1) Nickel to be a big winner Ni ktpa 2018E supply Ni ktpa from EV demand 3,500 deficit of 3,500 3,000 167kt(2) 3,000 disruption 2,500 2,500 2,000 2,000 • Market in deficit in 2016 & 2017 1,500 1,000 1,500 1,000 • Synchronous growth in USA, 500
Slide 16: Tropicana Gold Mine
For personal use only Tropicana Gold Mine 16
Slide 17: Tropicana
Tropicana JV – IGO 30% with AngloGold Ashanti 70% For personal use only Overview 7.8Mtpa open pit and processing plant Resource(1) 7.5Moz (100%) 2.2Moz (30%) Reserve(1) 4.1Moz (100%) 1.2Moz (30%) Production Guidance (100%) (30%) FY18 440 – 490koz 132 – 147koz Operating cost Guidance Cash cost AISC F
Slide 18: Tropicana pours its two millionth ounce of gold
Tropicana Tropicana pours its two millionth ounce of gold in January 2018 For personal use only Metric Units 2Q18 3Q18 YTD Guidance(2) koz Tropicana Production (100%) and AISC A$/oz 160 1,400 Gold produced (100%) koz 135.2 103.6 352.9 330 – 368 1,286 140 1,167 1,200 Gold Sold (IGO 30%) koz 41.4 31.1
Slide 19: Jaguar & Long
For personal use only Long Jaguar & 19
Slide 20: Jaguar
Jaguar 100% owned underground Cu – Zn VMS For personal use only Overview High grade Underground Cu – Zn VMS Resource(1) 55kt Cu, 364kt Zn & 18Moz Ag, 90koz Au Reserve(1) 16kt Cu, 161kt Zn, 8Moz Ag, 36koz Au Production Guidance FY18 29,000 – 33,000t Zn (contained metal in 2,600 – 3,000t Cu concentrat
Slide 21: Jaguar: A challenging 3Q18
Jaguar A challenging 3Q18 but expect to achieve end of year zinc metal production guidance For personal use only Metric Units 2Q18 3Q18 YTD Guidance(1) Tonnes Jaguar Production 9,000 Zinc in concentrate t 6,885 4,935 19,925 21,750 – 24,750 8,105 8,000 7,399 6,885 Copper in concentrate t 591 244 1,36
Slide 22: Promising intercepts at Bentayga increase modelled lens
Jaguar Promising intercepts at Bentayga substantially increase the size of the modelled lens For personal use only 3,370m of underground drilling returned significant intercepts(1) • 4.10m @ 8.81% Zn, 6.34% Cu, 1.40g/t Au and 492g/t Ag • 4.15m @ 8.85% Zn, 3.92% Cu, 0.96g/t Au and 199g/t Ag • 2.12m @
Slide 23: Long
Long 100% owned high-margin underground nickel mine For personal use only Average grade project to date of 3.8% Ni Overview Consistent low cost producer Resource(1) Mining to cease 31 May 2018 Reserve(1) Production Guidance FY18 (contained metal in 5,400 – 6,000t Ni concentrate) Operating cost Guida
Slide 24: Long production guidance met YTD
Long Long production guidance met YTD For personal use only Metric Units 2Q18 3Q18 YTD Guidance(1) Tonnes Long Production 2,500 Contained nickel produced t 1,374 1,381 4,327 4,050 – 4,500 2,069 2,000 Cash cost (payable) A$/lb Ni 5.47 5.13 5.11 4.40 – 4.90 1,572 1,374 1,381 Sustaining capex A$M 0.1 0
Slide 25: FY18 Exploration
FY18 Exploration A$50M commitment to exploration in FY18 For personal use only FY18 Exploration Budget Fraser Range A$10M Nova A$1.5M A$21M Tropicana A$4M Jaguar A$4.5M A$9M Long Other Greenfields 25
Slide 26: Fraser Range Exploration
Fraser Range Exploration 14,300km2 of tenure consolidated For personal use only Systematic belt scale exploration activities continued during 3Q18: • Two Diamond drill holes, for c.945m, tested two EM geophysical targets at Zanthus and Pygmy prospects • Downhole EM survey at the Pygmy prospect ident
Slide 27: Lake Mackay Exploration
Lake Mackay Exploration 12,800km2 belt scale greenfields project For personal use only SpectremAir completed flying of an orientation airborne EM survey during 3Q18 • Second trial (Tempest) was flown in April 2018 • Trial aims to test effectiveness of these two fixed-wing airborne EM systems on know
Slide 28: Concluding Comments
Concluding Comments • Nova delivers nameplate 1.5Mtpa mining For personal use only and an increase in grade to 1.85% nickel ─ Production from three stopes at Bollinger • Tropicana and Long metal production in line with expectations • Tropicana achieved its two millionth ounce of gold produced in Jan
Slide 29: For personal use only
a el a “FOLLOW US ~ UAS WE GO FROM STRENGTH TO STRENGTH igo.com.au