Igo Limited · ASX:IGO
Igo — Independence Group NL — BofAML 2018 APAC Resources Conference
40 slides from Igo's conference presentation, Dec 4, 2018
Slide 1: BofAML 2018 APAC Resources Conference
INDEPENDENCE GROUP NL BofAML 2018 APAC Resources Conference For personal use only Peter Bradford, Managing Director & CEO 4-5 December 2018 ASX:IGO / ADR:IIDY
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 securities in IGO or as an inducement to make an offer or invitation with respect to
Slide 3: Focus on high quality, long life assets that deliver great financial outcomes
Focus on high quality, long For personal use only life assets that deliver great Share Ownership financial outcomes Substantial Holders(1) Mark Creasy 15% Institutional Ownership(3) Australia 70% FIL 9% USA 22% T Rowe Price 8% Europe 5% ASX IGO CBA 6% ROW 3% Base Perth, WA Ausbil 5% Market Cap(1) A$
Slide 4: Our Winning Aspiration is to be a globally relevant supplier of critical metals
Our Winning Aspiration is to be a globally relevant supplier of metals that are critical for clean energy and future generations For personal use only Globally relevant supplier of metals that are critical to energy storage and renewable energy Delivered by Vertically integrated to produce battery g
Slide 5: A Streamlined Portfolio
A Streamlined Portfolio Strategic focus on minerals critical to energy storage and For personal use only electric vehicles 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$M) 1) Macquarie Resear
Slide 6: Tropicana
For personal use only Tropicana 6 6
Slide 7: Tropicana
Tropicana • 30% IGO & 70% AngloGold For personal use only Tropicana Production (100%) & AISC Ashanti (managers) Gold production (oz) AISC (A$/oz) 600,000 1,200 • Higher gold production and lower costs expected in FY19 500,000 1,000 • 8.0 Mtpa processing rate 400,000 800 achieved in 1Q19 300,000 600
Slide 8: Tropicana value drivers
Tropicana value drivers For personal use only • Additional ball mill delivers higher throughput rate and improved gold recovery ─ Commissioning by end CY18 • Boston Shaker Underground Pre- feasibility study nearing completion ─ Market release in 2Q19 • Further underground potential at Havana and Hav
Slide 9: Tropicana – 5km strike of mineralisation
Tropicana – 5km strike of mineralisation For personal use only 1) Refer to AGA ASX release dated 3 Aug 2018: Tropicana Site Visit 9
Slide 10: Nova
For personal use only Nova 10
Slide 11: Nova de-risked
Nova de-risked • Successful first year of commercial For personal use only production with 1.5Mtpa nameplate capacity exceeded • Nova – Bollinger grade control completed • Underground capital development expected to be completed in FY19 Nova Metal Production in Concentrate Tonnes 8,000 7,344 6,854 7
Slide 12: Strong outlook for Nova
Strong outlook for Nova For personal use only Directional Production and Cash Costs A$/lb • Consistent and higher production kt 30 3.0 rate expected next three years 2.5 • Main driver is higher grade stopes in core of Nova and Bollinger 20 2.0 • Assumes: 1.5 ─ 1.5Mtpa mining/processing rate 10 1.0 ─
Slide 13: Nova Underground Mine Design & Drilling
Nova Underground Mine Design & Drilling For personal use only 13
Slide 14: Zenith Energy to build 12.5GWh solar farm at Nova
For personal use only Zenith Energy to build 12.5GWh solar farm at Nova • First fully integrated commercial hybrid diesel/solar PV facility in Australia • Includes state-of-the-art PV modules, single axis tracking and control systems • First power expected September 2019 quarter • Breakeven at diese
Slide 15: EV Batteries, Nickel & IGO's Opportunity
For personal use only EV Batteries, Nickel & IGO’s Opportunity 15
Slide 16: Trend to Increased EV Penetration & More Nickel in Cathodes
Trend to Increased EV Penetration & Vehicle Numbers(1) Trend to More Nickel in Cathodes For personal use only Global EV sales 2.1% 2.1% (million units) 20 9.0% 4.6% 18 13.8% 30.4% 27.4% 16 14 38% CAGR 12 10 8 30.2% 36.2% 71.9% 6 82.3% 45% CAGR 73.1% 4 2 0 28.3% 25.5% China Europe US Japan ROW 8.4% 1
Slide 17: Nickel to be a big winner from EV battery demand
Decreasing stockpiles and Nickel to be a big winner from For personal use only stainless steel demand growth to EV battery demand disruption maintain market supply deficit with 300-900kt of additional Official Nickel Exchange Stockpiles and Price(1) nickel required by 2025(3) Nickel Stocks Nickel Pr
Slide 18: LME Nickel Versus Nickel Sulphate
LME Nickel Versus Nickel Sulphate (US$/t)(1,2) For personal use only 20000 Downstream processing potential at IGO 18000 • Produce nickel and cobalt 16000 sulphates for EV batteries NiSO4 Price • Delivers potential for higher 14000 Premium payability, premium price and higher concentrator recoveries
Slide 19: Nickel sulphate hexahydrate crystals produced from Nova nickel concentrate
For personal use only Nickel sulphate hexahydrate crystals produced from Nova nickel concentrate • Demonstrated technical feasibility of process route • Test work validated and improved upon previous metallurgical assumptions indicating potential for lower capex & opex • Prefeasibility underway 1) P
Slide 20: Discovery
For personal use only Discovery 20
Slide 21: A$51M committed to discovery in FY19
A$51M committed to discovery in FY19 For personal use only Nova A$12.0M Tropicana A$3.0M Long A$33.0M A$2.5M Greenfields, Generative & Other Best in Class exploration and discovery capability 21
Slide 22: A$12M commitment on Nova Mine Lease in FY19 to unlock brownfields discovery
For personal use only A$12M commitment on Nova Mine Lease in FY19 to unlock brownfields discovery • Leveraged multiple geophysical platforms • Largest hard rock 3D seismic survey in Australia • Now drill testing first seismic targets with two drill rigs onsite 22
Slide 23: Systematic exploration over ~15,000km2 of consolidated tenure
February 2018 September 2018 Systematic exploration over For personal use only ~15,000km2 of consolidated tenure • Multiple EM platforms • Bedrock geochem using Aircore • Gravity survey & mapping • Follow up RC/DDH Testing numerous targets • Technical success at Andromeda with Cu-Zn-Au-Ag discovery
Slide 24: Lake Mackay greenfields exploration project
For personal use only Lake Mackay is a 12,800km2 belt scale greenfields exploration project for IGO • Polymetallic intersections in drilling at Grapple & Bumblebee • Rock chip samples from Grimlock prospect confirm results with up to 2.5% Co, 1.1% Ni, 46.4% Mn(1) • Spectrem airborne EM survey commen
Slide 25: ESG
For personal use only ESG 25
Slide 26: Safety & Sustainability
Safety & Sustainability 2018 ACSI Rating of ASX200 Sustainability Reporting(5) Key Lag Safety Metrics(1,2,4) For personal use only 9 8 7 LTIFR 12 MMA MTIFR 12 MMA Leading 6 5 Detailed 4 3 Moderate 2 1 Basic 0 No Reporting Sector Sector ASX 200 Key Lead Safety Metrics(3) Average Leader Average 2.5 “L
Slide 27: Part of the IGO Difference is our focus on people and culture
For personal use only Part of the IGO Difference is our focus on people and culture • 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 leade
Slide 28: We need more mining people
Mining Activity Vs Mining Engineering Enrolments(1,2) For personal use only We need more mining people 9,000,000 350 8,000,000 • Several years of rhetoric 300 perpetuated a myth that the mining Mining Engineering Enrolments 7,000,000 boom had busted Gold & Iron Ore Production 250 6,000,000 5,000,000
Slide 29: Concluding Comments
Concluding Comments For personal use only 29
Slide 30: Concluding Remarks
Concluding Remarks For personal use only • Two low cost assets of scale and long mine life • Strong free cash flow delivering strong and strengthening balance sheet • Strong team passionate about making a difference • Positioned for transformational organic growth: ─ Underground at Tropicana ─ Nicke
Slide 31: Appendix
For personal use only Appendix 31
Slide 32: FY18 highlights
FY18 highlights: For personal use only • Record revenue and EBITDA • Completed first full year of commercial production at Nova • Tropicana and Long production better than mid-point of guidance • Exploration portfolio strengthened and non-core assets divested • Net debt reduced from A$164M to A$4M d
Slide 33: Significantly Improved Financial Results in FY18
Significantly Improved Financial Results in FY18 Driven by first full year of commercial production at Nova and a strong year for Tropicana For personal use only Revenue and Other Income Underlying EBITDA Net Profit after Tax Net Cash from Operating Activities 277.8 780.6 338.6 52.7 421.9 150.5 17.0
Slide 34: FY19 Guidance
FY19 Guidance(1) Stronger year at Nova and Tropicana in FY19 For personal use only Nova guidance de-risked by grade control drilling Tropicana grade streaming to deliver higher and first year of commercial production in FY18 production and lower cash costs Metric Units FY19 Guidance Metric Units FY1
Slide 35: 1Q19 Highlights
1Q19 Highlights Underlying Free Cash Flow A$82M For personal use only • Net cash increased to A$62M • Nova and Tropicana deliver metal production within guidance ─ Reduced by-product credits, higher fuel price and non recurring costs, impacted Nova cash costs • Strategic contracts executed ─ Nova so
Slide 36: Financial Results
Financial Results Balance strengthened and debt reduced For personal use only Units 4Q18 1Q19 QoQ Revenue and Other Income A$M 243.1 167.4 -31% Underlying EBITDA(1) A$M 131.5 62.9 -52% Profit After Tax A$M 40.3 0.2 -100% Net Cash from Operating Activities A$M 74.2 108.1 46% Underlying Free Cash Flow
Slide 37: 1Q19 Cash Flow Reconciliation
1Q19 Cash Flow Reconciliation 27% increase in cash on hand whilst retiring debt and disciplined payment of dividends For personal use only AUD M 250 2 18 19 12 6 200 29 12 71 150 A$91M cash flow 100 from operating 176 activities 139 50 ‐ Cash at Nova FCF Tropicana FCF Long FCF Exploration & BD Sale
Slide 38: Nova
Nova Metal production on guidance For personal use only Tonnes Nova Production Metric Units 4Q18 1Q19 Guidance(1) 8,000 7,344 6,854 7,000 Nickel in concentrate t 7,344 6,854 6,750 – 7,500 5,961 6,000 Copper in concentrate t 3,230 3,019 2,750 – 3,125 5,000 4,454 Cobalt in concentrate t 251 245 213 –
Slide 39: Tropicana
Tropicana Record mill throughput delivered and value enhancement studies on track Tropicana For personal use only oz Production (100%) and AISC A$/oz Metric Units 4Q18 1Q19 Guidance(1) 160,000 1,200 1,093 1,076 939 1,040 Gold produced (100%) koz 114.3 125.1 125.0 – 137.5 140,000 1,000 Gold Sold (IGO
Slide 40: For personal use only
LR | a. wv “FOLLOW US LIAS WE GO FROM STRENGTH TO STRENGTH igo.com.au
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