Igo Limited · ASX:IGO
Igo — Independence Group NL — Investor Presentation (November 2010)
49 slides from Igo's investor presentation, Nov 4, 2010
Slide 1: Equity Raising and Investor Update
INDEPENDENCE GROUP GROWING A GREAT AUSTRALIAN MINING COMPANY BY MINERAL DISCOVERIES & MINE DEVELOPMENT EQUITY RAISING AND INVESTOR UPDATE 4th November 2010 Chris Bonwick – Managing Director 1
Slide 2: Disclaimer
DISCLAIMER PRESENTATION OF GENERAL BACKGROUND This document contains general background information about the activities of Independence Group NL ("Independence" or the "Company") current as at the date of this presentation. It is information in a summary form only and does not contain all the inf
Slide 3: Disclaimer cont'd
DISCLAIMER cont’d NOT A PROSPECTUS This document is not a prospectus or a product disclosure statement under the Australian Corporations Act 2001 (Cth) ("Australian Corporations Act") and has not been lodged with the Australian Securities and Investment Commission. The offer of Independence ordina
Slide 4: International Offer Restrictions
INTERNATIONAL OFFER RESTRICTIONS This document does not constitute an offer of securities in any jurisdiction in which it would be unlawful. New Shares may not be offered or sold in any country outside Australia except to the extent permitted below: EUROPEAN ECONOMIC AREA – GERMANY The information i
Slide 5: International Offer Restrictions cont'd
INTERNATIONAL OFFER RESTRICTIONS cont’d SWITZERLAND The New Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange ("SIX") or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the di
Slide 6: International Offer Restrictions cont'd
INTERNATIONAL OFFER RESTRICTIONS cont’d HONG KONG WARNING: This document has not been, and will not be, registered as a prospectus under the Companies Ordinance (Cap. 32) of Hong Kong (the "Companies Ordinance"), nor has it been authorised by the Securities and Futures Commission (the "SFC") in Hong
Slide 7: Agenda
AGENDA Pages Summary & Independence Overview 8 ‐ 12 Tropicana Joint Venture 13 – 21 Long Nickel Mine 22 ‐ 29 Regional Exploration 30 – 36 Corporate Goals 37 Equity Raising Overview 38 – 40 Key Risks 41 – 45 Additional Information 46 ‐ 49 7
Slide 8: Summary & Independence Overview
SUMMARY & INDEPENDENCE OVERVIEW Independence is undertaking an equity raising to partly fund its share of the expected Tropicana JV project costs • The Tropicana JV project is Independence’s primary near term growth driver ‐ a 3.3M oz Au PFS open cut reserve in a new Australian gold province ‐ Indep
Slide 9: Summary & Independence Overview
SUMMARY & INDEPENDENCE OVERVIEW Independence is undertaking an equity raising to partly fund its share of the expected Tropicana JV project costs • Total cash reserves following the equity raising expected to be approximately A$295.1m: ‐ A$137.3m cash (30 September 2010) ‐ A$157.8m net cash raised t
Slide 10: Independence Overview - Corporate
INDEPENDENCE OVERVIEW ‐ CORPORATE Tight share structure and no debt Capital Structure: ASX 200 Code: IGO 114.1M shares and 0.8M staff options pre equity raising 138.8M shares and 0.8M staff options post equity raising Market Cap. (01/11/10): A$820M Daily turnover (6 month average) – 0.4M Substantial
Slide 11: Independence Overview - Assets
INDEPENDENCE OVERVIEW ‐ ASSETS Multiple growth opportunities LONG NICKEL 2009/10 Cash Costs: MINE without royalty A$4.01/lb Ni with royalty A$4.44/lb Ni 2009/10 Revenue: A$9.60/lb Ni Jun 10 Resources: 91,500t Ni @ 5.4% Ni 9Production Jun 10 Reserves: 53,400t Ni @ 4.1% Ni Extending mine life – New Mo
Slide 12: IGO History and Share Price
IGO HISTORY AND SHARE PRICE Five ore bodies discovered to date Monthly Average Share Price to 01.11.10 12
Slide 13: Tropicana JV - IGO's Second Potential Cash Generator
TROPICANA JV – (IGO – 30%) IGO’S SECOND POTENTIAL CASH GENERATOR A New Australian Gold Province AngloGold Ashanti – 70% (Manager) Tropicana JV “New Gold Province under sand” 1000kms 13
Slide 14: Tropicana JV Significant Discoveries to Date
TROPICANA JV SIGNIFICANT DISCOVERIES TO DATE Numerous gold anomalies and potential for other gold discoveries 14
Slide 15: Tropicana JV Pre-Feasibility Resource & Reserve
TROPICANA JV PRE‐FEASIBILITY RESOURCE & RESERVE PFS Resources/Reserves estimated using owner‐operator costs 100% Project: Jun 2009 Open Pit Resource: 75.3Mt @ 2.1g/t Au – 5Moz (A$1,250/oz) Dec 2009 Open Pit Reserve: 45Mt @ 2.3g/t Au – 3.3Moz (A$1,059/oz) 15
Slide 16: Tropicana JV New Boston Shaker Discovery
TROPICANA JV NEW BOSTON SHAKER DISCOVERY Boston Shaker will not be included in BFS Tropicana gold system still growing along‐strike and down‐dip. 16
Slide 17: Tropicana JV Underground Potential
TROPICANA JV UNDERGROUND POTENTIAL High‐grade, true width in‐pit gold intercepts suggest underground potential 17
Slide 18: Tropicana JV Havana Deeps Intercepts
TROPICANA JV HAVANA DEEPS INTERCEPTS Havana Deeps will not be included in BFS Tropicana gold system still growing along‐strike and down‐dip. 18
Slide 19: Tropicana JV Havana Deeps Cross-Section
TROPICANA JV HAVANA DEEPS CROSS‐SECTION Tropicana JV Havana Deeps Step Out Hole 19
Slide 20: Tropicana JV Pre-Feasibility Outcome (100% Project)
TROPICANA JV PRE‐FEASIBILITY OUTCOME (100% PROJECT) Open‐cut Resource: 75.3 Mt @ 2.07g/t Au (5.01 M oz Au) at June 2009 Mining Reserve: 45 Mt @ 2.3g/t Au (3.3 M oz Au) – Owner Operator costing (A$1059/oz Au, US$103/barrel oil & 15% discount rate assumptions) Infrastructure: 5.5 Mt pa treatment plant
Slide 21: Tropicana JV Current Proposed Plant Layout
TROPICANA JV CURRENT PROPOSED PLANT LAYOUT Designed to reduce energy consumption compared to standard gold plants Estimated BFS plant and infrastructure $600‐620M Estimated BFS working capital $100‐120M Current estimated IGO contribution $210‐220M 21
Slide 22: Long Nickel Mine - IGO 100%
LONG NICKEL MINE – IGO 100% Moran, McLeay and Long nickel ore bodies yet to be closed off HISTORY • IGO Starting Reserve = 26,800 Ni t • IGO Production to date = 66,801 Ni t • June 2010 Resource = 91,500 Ni t • June 2010 Reserves = 53,400 Ni t GOALS • Sustainable 9,000t Ni pa in bottom 3rd of world‐
Slide 23: Production Forecast & Hedging
PRODUCTION FORECAST & HEDGING History of exceeding production guidance 2009/10 2009/10 Guidance Actual • Production 8,000‐8,400 Ni t 8,615 Ni t • Grade 4.0% Ni 4.25% Ni • Cash Costs (payable) ‐ with royalty A$4.20‐4.40/lb Ni A$4.44/lb Ni ‐ without royalty A$3.90‐4.10/lb Ni A$4.01/lb Ni 2010/11 Sep 2
Slide 24: Quarterly Cash Costs & Revenue
QUARTERLY CASH COSTS & REVENUE High operating margins and consistent low cash costs over 6 years Revenue A$/lb Ni (includes hedging) Payable Cash Costs A$/lb Ni 24
Slide 25: Long Mine Nickel Deposits & Targets Longitudinal Projection
LONG MINE NICKEL DEPOSITS & TARGETS LONGITUDINAL PROJECTION Largest Reserve since IGO reopened the mine (mine life extended to at least 2016) 25
Slide 26: Moran Nickel Deposit
MORAN NICKEL DEPOSIT Moran remains open to the south 26
Slide 27: Moran South Cross-Section
MORAN SOUTH CROSS‐SECTION Moran remains open to the south 27
Slide 28: Long North
LONG NORTH Long ore body remain open to the north 28
Slide 29: Long Mine Complex Production / Ore Reserve Comparison
LONG MINE COMPLEX PRODUCTION / ORE RESERVE COMPARISON Consistently mining more nickel than Reserve estimate Oct 2002 – Jun 2010 PRODUCTION SUMMARY Initial Ore Reserve Estimate: 40,373 Ni t Mined from Ore Reserve: 52,665 Ni t (+30%) Mined outside Ore Reserve: 11,444 Ni t (+28%) TOTAL: 64,109 Ni t (+5
Slide 30: IGO Gold & Base Metal Exploration Projects
IGO GOLD & BASE METAL EXPLORATION PROJECTS High quality nickel, gold, copper‐lead‐zinc and tin exploration projects 30
Slide 31: Duketon JV - Rosie Prospect Massive Nickel Sulphides
DUKETON JV – ROSIE PROSPECT MASSIVE NICKEL SULPHIDES (IGO earning 70%) High value ore ‐ potential for significant bi‐product credits Rosie Prospect massive nickel sulphides assaying: 5.2m @ 9.1% Ni, 1.1% Cu, 0.2% Co, 7.1g/t PGE’s (2.2g/t Pt, 1.7g/t Pd, 1.8g/t Ru & 0.8g/t Rh) 31
Slide 32: Orrbacken Project - Sweden
ORRBACKEN PROJECT ‐ SWEDEN (JV: IGO EARNING UP TO 73%) Numerous concealed TEM anomalies NiS rich gabbro boulder 32
Slide 33: Holleton Gold Project (IGO 100%)
HOLLETON GOLD PROJECT (IGO 100%) Large gold anomaly discovered under cover REGIONAL GEOLOGY GOLD GEOCHEMISTRY 33
Slide 34: Karlawinda Gold Project - Bibra Gold Prospect
KARLAWINDA GOLD PROJECT (IGO 100%) BIBRA GOLD PROSPECT Potential Cross‐section heap leach Sep 2010 Qtr Report gold operation 34
Slide 35: Project Generation - De Beers Database (IGO 100%)
PROJECT GENERATION DE BEERS DATABASE (IGO 100%) No buy‐back or royalties on future mineral discoveries Long term exploration asset to find new Australian mineral camps. 293,000 geochemical samples collected. 2,278 samples reporting visible gold. 2,025 geophysical surveys. IGO analysing sam
Slide 36: Birrindudu Project - Northern Territory
BIRRINDUDU PROJECT – NORTHERN TERRITORY (IGO 100%) New Australian tin discovery Cassiterite rich heavy mineral concentrate 36
Slide 37: Independence Corporate Goals
INDEPENDENCE CORPORATE GOALS To improve shareholder returns by growing a great multi commodity Australian mining company Focus on: Low cash costs Mine longevity Innovative exploration Strong balance sheet 37
Slide 38: Equity Raising Overview
EQUITY RAISING OVERVIEW Equity raising: An Equity raising of A$164.3m, consisting of: ‐ a A$113.8m Institutional Placement ‐ a A$50.6m underwritten accelerated non‐renounceable pro‐ rata 1‐for‐15 Entitlement Offer Use of funds: Funds used to partly finance estimated Tropicana JV project expense ‐ Ba
Slide 39: Equity Raising Overview - Timetable
EQUITY RAISING OVERVIEW Timetable Institutional Entitlement Offer Opens Thursday, 4 November 2010 Institutional Entitlement Offer Closes 7.00am Perth time, Friday 5 November 2010 Ordinary Shares Recommence Trading Monday, 8 November 2010 Record Date to Determine Entitlements 5.00pm Perth time, Tuesd
Slide 40: Pro-Forma Balance Sheet
PRO‐FORMA BALANCE SHEET 30 September 2010 Adjustments Pro‐forma ($m)1 ($m)2 ($m) Current Assets Cash & cash equivalents 137.3 157.8 295.1 Trade & other receivables 29.3 29.3 Other Financial Assets 8.6 8.6 Other current assets 0.3 0.3 Non‐Current Assets Exploration, eval. & devel. expenditure 94.9 94
Slide 41: Key Risks
KEY RISKS Activities in the Company and its controlled entities, as in any business, are subject to risks which may impact on the Company's future performance. There are a number of factors, both specific to the Company and of a general nature, which may affect the future operating and financial per
Slide 42: Key Risks (cont'd)
KEY RISKS (cont’d) Mining and development risks Profitability depends on successful exploration and / or acquisition of reserves, design and construction of efficient processing facilities, competent operation and management and proficient financial management. Mining and development operations ca
Slide 43: Key Risks (cont'd)
KEY RISKS (cont’d) Regulatory risks The Company's operations are subject to various Federal, State and local laws and plans, including those relating to mining, prospecting, development permit and licence requirements, industrial relations, environment, land use, royalties, water, native title and
Slide 44: Key Risks (cont'd)
KEY RISKS (cont’d) Joint venture parties, agents and contractors There is a risk of financial failure or default by a participant in any joint venture to which the Company is or may become a party or the insolvency or managerial failure by any of the contractors used by the Company in any of its a
Slide 45: Key Risks (cont'd)
KEY RISKS (cont’d) Stock market conditions As with all stock market investments, there are risks associated with an investment in the Company. Share prices may rise or fall and the price of Shares might trade below or above the issue price for the New Shares. General factors that may affect the ma
Slide 46: IGO Contact Details
IGO CONTACT DETAILS Perth Office Managing Director – Chris Bonwick Ground Floor, Suite 1 183 Great Eastern Highway, Belmont, Western Australia Postal: PO Box 496, South Perth, Western Australia 6951 Telephone: +61 8 9479 1777 Facsimile: +61 8 9479 1877 Email: contact@igo.com.au Website: www.igo.com.
Slide 47: Long Nickel Mine June 2010 Resources and Reserves
LONG NICKEL MINE JUNE 2010 RESOURCES AND RESERVES RESOURCES MINING RESERVE Undiluted at 1% Ni Cut-off 1, 2 as at 30 June 2010 as at 30 June 2010 Tonnes Ni % Ni Tonnes Tonnes Ni % Ni Tonnes LONG Measured 26,000 5.6 1,500 LONG Proven 15,000 2.8 400 Indicated 215,000 4.8 10,300 Probable 98,000 2.9 2,90
Slide 48: Tropicana JV 2009 Pre-Feasibility Resources and Reserves
TROPICANA JV 2009 PRE‐FEASIBILITY RESOURCES AND RESERVES Owner Operator Costs June 2009 December 2009 Open Pit Resources Open Pit Reserves Tonnes Grade Contained Tonnes Grade Contained (Mt) (g/t) 1 Gold (Mt) (g/t) 3 Gold 2 4 (Moz) (Moz) Measured 24.2 2.3 1.79 Proved 22 2.4 1.7 Indicated 39.8 2.0 2.5
Slide 49: Competent Person Statement
COMPETENT PERSON STATEMENT Note: The information in this presentation that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Christopher M Bonwick who is a full‐time employee of the Company and is a member of the Australasian Institute of Mining
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