Igo Limited · ASX:IGO
Igo — Independence Group NL — Euroz Securities Rottnest Island Conference 2019
32 slides from Igo's conference presentation, Mar 12, 2019
Slide 1: Euroz Securities – Rottnest Island Conference
INDEPENDENCE GROUP NL Euroz Securities – Rottnest Island Conference For personal use only Peter Bradford – Managing Director & CEO 12 March 2019 ASX:IGO / ADR:IIDDY 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 Annual Update of Exploration Results, Mineral Resources and Ore Reserves For personal use only dated 20 February 2019 (Annual Statement) and lodged with the ASX f
Slide 4: Our focus for 2019
Our focus for 2019 • Continue strong operational For personal use only performance at Nova and Tropicana ─ Deliver on production guidance ─ Maintain leading safety and ESG performance • Continue to generate strong free cash flow and build the balance sheet • Progress transformational growth initiati
Slide 5: Leveraging Opportunity
For personal use only Leveraging Opportunity 5
Slide 6: Our Purpose is Making a Difference by aligning the business to the structural shift to clean energy
Our Purpose is Making a Difference by aligning the business to the structural shift to clean energy For personal use only Globally relevant Quality Products supplier of metals that are critical to desired by end users made safely, energy storage and renewable ethically, sustainably and reliably ener
Slide 7: A clear global trend toward renewable energy
A clear global trend toward For personal use only renewable energy • Strong government support globally for mass adoption of EVs and energy storage ─ Bans on conventional ICE vehicles ─ Subsidies, tax exemptions & rebates ─ Substantial investments in recharge infrastructure • Battery pack costs are
Slide 8: EV sales forecast and nickel demand
EV sales forecast(1) 20 Global EV sales 18 (million units) For personal use only 16 14 12 38% CAGR(2) Nickel demand to be driven by 10 8 strong battery demand and 6 4 45% CAGR(2) evolution of battery chemistry 2 0 • EV demand to be led by China and Europe China Europe US Japan ROW • Industry trend t
Slide 9: EV battery demand disruption and nickel stockpiles
EV battery demand disruption Decreasing nickel stockpiles and For personal use only expected to require 300-900kt of stainless steel demand growth to additional nickel by 2025(1) maintain market supply deficit Nickel Market Supply/Demand Balance Outlook(2) Official Nickel Exchange Stockpiles and Pri
Slide 10: Nova
For personal use only Nova 10
Slide 11: Nova de-risked
Nova de-risked For personal use only • Successful first six quarters of commercial production ─ 1.5Mtpa nameplate exceeded ─ Record production during 1H19 ─ Cash costs trending down • Mine life sustained at 8 years with reserve marginally higher • Grade control drilling and underground capital devel
Slide 12: Nova Underground Mine Design & Drilling
Nova Underground Mine Design & Drilling For personal use only 12
Slide 13: Nova Metal Production
Nova Metal Production Tonnes 12,000 A$/lb Payable 4.50 Nova is performing For personal use only 10,000 4.00 3.50 • Increasing metal production and 8,000 3.00 falling cash costs 2.50 • Strong contribution to cash build 6,000 2.00 4,000 1.50 2,000 1.00 since Nova production commenced 0.50 0 - in June
Slide 14: Directional Production and Cash Costs
Directional Production and Cash Costs For personal use only Strong outlook for Nova kt A$/lb payable • Consistent and higher production 30 3.0 rate expected next three years 2.5 • Main driver is higher grade stopes 20 2.0 in core of Nova and Bollinger • Assumes: 1.5 ─ 1.5Mtpa mining/processing rate
Slide 15: Tropicana
For personal use only Tropicana 15 15
Slide 16: Tropicana: increased production and lower costs in FY19
Tropicana: increased production For personal use only Tropicana Production (100%) & AISC and lower costs in FY19 Gold production (oz) AISC (A$/oz) 600,000 1,200 • 30% IGO & 70% AngloGold Ashanti (managers) 500,000 1,000 • 8.0Mtpa annualised processing rate 400,000 800 achieved in 1H19 • 1H19 product
Slide 17: Tropicana Optimisation: Second ball mill delivering as planned
For personal use only Tropicana Optimisation: Second ball mill delivering as planned • Project successfully commissioned in 2Q19 as guided • Immediate increase in throughput rate and improvement in grind, resulting in improved gold recovery Throughput (tph) Throughput (t/op.h) Grind Grind (microns)
Slide 18: Tropicana Underground Potential
Tropicana Underground Potential For personal use only Boston Shaker Underground Development Layout (3) • Boston Shaker PFS completed in December 2018(1) - confirmed technical and financial viability of an underground development ─ Mining ~1Mtpa to produce ~100koz/year over a 7 year mine life ─ Capex
Slide 19: Tropicana mineralised system
Tropicana mineralised system For personal use only 1) Refer to IGO ASX release dated 20 Feb 2019: CY18 Mineral Resource & Ore Reserve Statement 19
Slide 20: Growth Initiatives
For personal use only Growth Initiatives 20
Slide 21: Downstream Processing: Nickel sulphate for EV batteries
Downstream Processing For personal use only Nickel sulphate for EV batteries • Produce nickel sulphate direct from Nova nickel concentrate • Technical feasibility confirmed with continuous pilot plant testwork • Delivers potential for: Demand Outlook for Nickel Sulphate (2) ─ Higher payability kt Ni
Slide 22: Exploration & Discovery: A$51M investment in FY19
Exploration & Discovery For personal use only A$51M investment in FY19 • Best in class exploration and discovery capability • Greenfields focus to discover the mines of the future A$12.0M Nova Tropicana A$3.0M A$2.5M Long A$33.0M Greenfields, Generative & Other 22
Slide 23: Exploration & Discovery: Nova Near Mine a focus
For personal use only Exploration & Discovery Nova Near Mine a focus • A$12M commitment to exploration within Nova mining lease in FY19 • Potential to discover brownfields extensions to Nova system • Leveraged multiple geophysical platforms including largest hard rock 3D seismic survey in Australia
Slide 24: Exploration & Discovery: Fraser Range Targets
February 2018 For personal use only Exploration & Discovery Fraser Range Targets • Greenfields exploration targeting Nova style discoveries • Systematic exploration over ~15,000km2 • 40 targets identified for drilling in CY19 • Technical success at Andromeda with Cu-Zn-Au-Ag discovery 1) www.dmirs.w
Slide 25: Exploration & Discovery: Widowmaker
For personal use only Exploration & Discovery Widowmaker • Located immediately South of Silver Knight Discovery(2) (30km NE of Nova) • Five high-priority targets defined using EM and aircore drilling, including: ─ Ecliptic contains disseminated sulphides in aircore drilling ─ Solar is a Squid EM ano
Slide 26: Exploration & Discovery: Lake Mackay
For personal use only Exploration & Discovery Lake Mackay is a 12,800km2 belt scale greenfields exploration project for IGO • Polymetallic intersections in drilling at Grapple & Bumblebee • Spectrem airborne EM survey completed • Ni and Co in laterite rock chips at Grimlock (2.5% Co, 1.1% Ni(1)) and
Slide 27: Corporate & Financial
Corporate & Financial For personal use only 27
Slide 28: Financial Performance: Building Momentum
Financial Performance: Net Cash from Operating Activities Building Momentum A$(M) For personal use only 180 167 163 160 Net Cash Position 140 120 111 A$(M) 100 80 150 60 52 40 26 100 91 94 20 0 1H17 2H17 1H18 2H18 1H19 50 Underlying Free Cash Flow (1) A$(M) 0 140 -4 120 111 98 100 -50 80 60 41 40 -1
Slide 29: Capital Allocation to balance growth and cash returns to shareholders
Capital Allocation to balance growth For personal use only and cash returns to shareholders Grow the Sustain the business and • New policy aligns shareholder interests business and to cash generation of asset portfolio increase deliver underlying ─ Cash return of 15-25% of FCF consistent value per r
Slide 30: ESG Performance
ESG Performance 2018 ACSI Rating of ASX200 Sustainability Reporting (5) Key Lag Safety Metrics(1,2,4) For personal use only 6 5 Leading LTIFR 12 MMA 4 MTIFR 12 MMA Detailed 3 Moderate 2 1 Basic 0 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 No Reporting Key Lead Safety Metrics(3) Sector Sector ASX 200
Slide 31: Concluding Comments
Concluding Comments For personal use only • Strong free cash generation and strengthening balance sheet • Nova and Tropicana delivering metal production within guidance • Transformational growth initiatives being successfully implemented • Assessment of downstream nickel sulphate opportunity nearing
Slide 32: Follow Us
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Independence Group NL — Euroz Securities Rottnest Island Conference 2019 on 6ix