Igo Limited · ASX:IGO
Igo — Independence Group NL — Investor Presentation (July 2016)
57 slides from Igo's investor presentation, Jul 27, 2016
Slide 1: Equity Raising Presentation
NOT FOR RELEASE OR DISTRIBUTION IN THE UNITED STATES INDEPENDENCE GROUP NL For personal use only Equity Raising Presentation 27 July 2016
Slide 2: Important notices and disclaimer
Important notices and disclaimer For personal use only This presentation has been prepared by Independence Group NL (ACN 092 786 304) (“IGO”) in relation to an institutional placement (“Placement”) of new fully paid ordinary IGO shares (“New Shares”) and a share purchase plan (“SPP”). Summary inform
Slide 3: Important notices and disclaimer
Important notices and disclaimer For personal use only Investment risk: An investment in IGO shares is subject to known and unknown risks, some of which are beyond the control of IGO and some of which are described in the "Key Risks" section of this presentation. IGO does not guarantee any particula
Slide 4: Important notices and disclaimer
Important notices and disclaimer For personal use only No liability: IGO has prepared this presentation based on information available to it at the time of preparation. No representation or warranty, express or implied, is made as to the fairness, accuracy or completeness of the information, opinion
Slide 5: Contents
Contents For personal use only 1 Overview page 6 to 7 2 Offer Details page 8 to 14 3 Investment Highlights page 15 to 17 4 IGO Overview page 18 to 31 5 Snapshot of IGO’s June 2016 Quarterly page 32 to 34 6 Appendix page 35 to 57 A JORC Mineral Resource and Ore Reserves B Key Risks C International Of
Slide 6: 1. Overview
For personal use only 1. Overview
Slide 7: Overview
Overview For personal use only IGO is raising up to A$280 million via an institutional placement and SPP Equity Raising Use of Funds Quality Investment • Fully underwritten placement to • Strengthen the balance sheet and • Leading Australian diversified sophisticated, professional and provide enhanc
Slide 8: 2. Offer Details
For personal use only 2. Offer Details
Slide 9: Placement overview
Placement overview Placement to raise A$250 million For personal use only • Fully underwritten Placement to institutional and sophisticated investors to raise approximately A$250 million Placement • Approximately 66.7 million shares (“New Shares”) will be issued (approximately 13.0% of issued capita
Slide 10: Share purchase plan overview
Share purchase plan overview Share purchase plan to raise up to A$30 million For personal use only • Non-underwritten SPP, subject to an overall cap of A$30 million • Eligible IGO shareholders with registered addresses in Australia and New Zealand Share will be invited to invest up to a maximum of A
Slide 11: Source and uses of funds
Source and uses of funds Equity raising to strengthen the balance sheet, enhance flexibility to fund IGO’s growth projects, repay debt and working capital For personal use only Sources A$M Uses A$M Cash on hand (as at 30 June 2016)(1) 46 Nova development remaining capital expenditure 140 – 150 Proce
Slide 12: Position post Equity Raising
Position post Equity Raising The Equity Raising will ensure a strong and stable capital structure as IGO completes the development of Nova For personal use only Proforma unaudited liquidity position pre/post the Placement Item Units Proforma position Unaudited cash (as at 30 June 2016)(1) A$M 46 Una
Slide 13: Well positioned post Equity Raising
Well positioned post Equity Raising For personal use only Strong balance sheet and greater financial flexibility • Proceeds from the Equity Raising will help to reduce IGO’s gearing to a comfortable 6.6% - 7.1%(1) • Ensures strong financial flexibility during the final stages of Nova development Enh
Slide 14: Equity Raising timetable
Equity Raising timetable For personal use only Placement Timetable Event Date(1),(2) Placement bookbuild Wednesday, 27 July 2016 Announcement of completion of Placement Thursday, 28 July 2016 Settlement of New Shares issued under the Placement Tuesday, 2 August 2016 Allotment and trading of New Shar
Slide 15: 3. Investment Highlights
For personal use only 3. Investment Highlights
Slide 16: Investment highlights
Investment highlights For personal use only Three operating mines with commodity diversification through exposure to gold, QUALITY nickel, zinc, copper, cobalt and silver DIVERSIFIED All located in Western Australia ASSETS High-margin operating assets with proven cash flow generation through t
Slide 17: Investment risks
Investment risks For personal use only There are various risks associated with an investment in Independence Group and many of these are outside the control of the Company. Please refer to Appendix B - Key Risks for further details. Key Risks General Risks Operational Risks • Commodity price volatil
Slide 18: 4. IGO Overview
For personal use only 4. IGO Overview
Slide 19: Corporate overview
Corporate overview For personal use only IGO vs key commodity prices(1) Key information Pre-Offer Post-Offer(4) IGO LME Nickel Price (Rebased) Gold Price (Rebased) 4.50 Share price(2) A$ 4.08 n/a Share price (A$/share) 4.00 52 week high/low A$ 4.40/2.01 n/a 3.50 Shares outstanding(3) M 511.6 578.3 3
Slide 20: IGO assets
IGO assets Consistent high-margin production with platform for growth For personal use only DISCOVERY DEVELOPMENT & CURRENT OPERATIONS CONSTRUCTION Emerging belt scale regional Construction of the world- Tropicana (Au) exploration opportunities class Nova Ni-Cu-Co Project • Albany Fraser/ Trop
Slide 21: Snapshot of IGO asset base
Snapshot of IGO asset base For personal use only Nova Ni, Cu, Co Long Ni World-class development project Cash flow positive throughout nickel Status Under construction cycle Est. Mine Life 10+ years Status Producing Est. cash cost FY17: A$4.00 – $4.50/lb(1) Est. Mine Life 2 years FY18: A$1.50 – $2.0
Slide 22: Tropicana Gold Mine
Tropicana Gold Mine One of Australia’s leading open-pit gold mines For personal use only Overview JV IGO 30% with AngloGold Ashanti 70% Open pit with potential for expansion 7+ years current LOM Resource Reserve 7.04Moz (100%) 2.1Moz (30%) 30 June 2015 (1) 3.01Moz (100%) 0.9Moz (30%) Production (100
Slide 23: Tropicana Gold Mine: Long Island
Tropicana Gold Mine Long Island - Likely to deliver material step-change For personal use only • Long Island Study designed to unlock full potential of Tropicana including: • Completion of extensive resource extension exploration program with significant intersections outside current Mineral Resourc
Slide 24: Nova Project
Nova Project World class Ni-Cu-Co project in construction For personal use only IGO 100% magmatic Ni – Cu 1.5Mtpa underground mine Overview Construction 93% complete On time and on budget for first production in December 2016 Resource 30 June 2015 (1) 325,000t Ni, 134,000t Cu Reserve 14 December 201
Slide 25: Nova Project: Construction on time and on budget
Nova Project Construction is on time and on budget For personal use only • Preliminary operating guidance for Nova provided through to FY19 • Additional opportunities exist to improve mining production and processing rates • These further enhancements will be pursued following commissioning and ramp
Slide 26: Nova Project: Improved mining schedule
Nova Project Improved mining schedule delivers significant benefits For personal use only • IGO has delivered significant enhancement in project value Nova Mining Schedule compared to the DFS • Optimisation Study completed in December 2015 moved Nova down the cost curve • Optimisation Study delivere
Slide 27: Jaguar Mine
Jaguar Mine VMS Corridor with cluster of orebodies For personal use only Overview IGO 100% High grade Underground Cu – Zn VMS Resource 67,000t Cu, 294,000t Zn & 15.4Moz Ag Reserve 20,000t Cu, 88,000t Zn & 4.7Moz Ag 30 June 2015 (1) Production 39,000 to 43,000t Zn in concentrate Guidance FY17 4,600 t
Slide 28: Jaguar Mine: Resource extension and regional opportunities
Jaguar Mine Resource extension and regional opportunities For personal use only • Opportunities to extend mineralisation and Resources down plunge at the Bentley mine • 50km long prospective corridor • Potential to discover VMS mineralisation under cover along strike from known deposits 1) For furth
Slide 29: Long Mine
Long Mine High grade underground nickel on the Kambalda dome For personal use only IGO 100% high-margin underground nickel Overview Average grade project to date of 3.8% Ni Consistent low cost producer Resource 66,000 Ni t Reserve 22,000 Ni t 30 June 2015 (1) Production Guidance 7,400 to 8,200 Ni t
Slide 30: Long Mine: Consistent low cash cost production
Long Mine Consistent low cash cost production For personal use only Historical Quarterly Cash Cost & Realised Price A$/lb Ni 25 20 15 10 5 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Financial Quarters Payable Cash Cost + Royalties Realised Ni Price Including Hedging Historica
Slide 31: IGO and Equity Raising summary
IGO and Equity Raising summary Strong balance sheet provides greater financial flexibility to fund growth portfolio For personal use only • A$250 million fully underwritten institutional Placement EQUITY RAISING • Share purchase plan to raise up to A$30 million • Strengthen the balance sheet and pro
Slide 32: 5. Snapshot of June 2016 Quarter
For personal use only 5. Snapshot of June 2016 Quarter
Slide 33: June 2016 quarterly highlights
June 2016 quarterly highlights Delivery of strong quarterly performance For personal use only Corporate (June quarter 2016) Long Mine (Ni) Jaguar Mine (Zn-Cu) • Cash of A$46.3M and debt of • Consistently delivering to new • 149% increase in copper A$271M as at 30 June 2016 plan production quarter on
Slide 34: June 2016 quarterly highlights: cash flow
June 2016 quarterly highlights June quarter cash flow – strong cash management For personal use only Unaudited (A$’million) Q4 FY16 Q3 FY16 Q4 FY15 FY16 Revenue 105.9 88.5 118.7 417.1 • As at 30 June A$140M Underlying EBITDA(1) 38.9 28.7 38.0 135.7 to A$150M capital Net Profit After Tax 16.4 2.8 7.5
Slide 35: Appendix
For personal use only APPENDIX 35
Slide 36: Appendix A. Mineral Resources & Ore Reserves
For personal use only Appendix A. Mineral Resources & Ore Reserves
Slide 37: Mineral resource & ore reserve: Tropicana
Mineral resource & ore reserve Tropicana Operation Mineral Resource 30 June 2015 Ore Reserve 30 June 2015 For personal use only 100%100% Basis (IGO 30% Interest) Project 100%100% Basis (IGO 30% Interest) Project Classification Tonnes Mt Au g/t Contained Au Moz Classification Tonnes Mt Au g/t Contain
Slide 38: Mineral resource & ore reserve: Long
Mineral resource & ore reserve Long Operation Mineral Resource 30 June 2015 Ore Reserve 30 June 2015 For personal use only Classification Tonnes Ni% Ni Tonnes Classification Tonnes Ni% Ni Tonnes LONG Measured 65,000 5.4 3,500 LONG Proved 28,000 3.6 1,000 Indicated 287,000 5.1 14,600 Probable 94,000
Slide 39: Mineral resource & ore reserve: Jaguar
Mineral resource & ore reserve Jaguar Operation For personal use only Mineral Resource 30 June 2015 Ore Reserve 30 June 2015 Classification Tonnes Cu% Zn% Ag g/t Au g/t Classification Tonnes Cu% Zn% Ag g/t Au g/t BENTLEY Measured 529,000 2.1 11.5 159 0.8 BENTLEY Proved 323,000 2.0 10.8 155 0.8 Indic
Slide 40: Mineral resource & ore reserve: Nova
Mineral resource & ore reserve Nova Project For personal use only Mineral Resource 30 June 2015 Ore Reserve December 2015 Classification Tonnes (Mt) Ni% Cu% Co% Ni Kt Cu Kt Co Kt Classification Tonnes (Mt) Ni% Cu% Co% Ni Kt Cu Kt Co Kt NOVA Measured - - - - - - - NOVA Proved - - - - - - - Indicated
Slide 41: Mineral resource & ore reserve: Stockman
Mineral resource & ore reserve Stockman Project Mineral Resource 30 June 2015 Ore Reserve 30 June 2015 For personal use only Classification Tonnes Mt Cu% Zn% Ag g/t Au g/t Classification Tonnes Mt Cu% Zn% Ag g/t Au g/t CURRAWONG Measured - - - - - CURRAWONG Proved - - - - - Indicated 9.5 2.0 4.2 42
Slide 42: Appendix B. Key Risks
For personal use only Appendix B. Key Risks
Slide 43: Key risks
Key risks For personal use only There are various risks associated with investing in IGO, both because of the nature of stock market investments and specifically because of the nature of IGO’s mining business and operations. The following slides identify some of the key risks relevant to an investme
Slide 44: Key risks (continued)
Key risks (continued) For personal use only Joint venture and other IGO may hold assets, developments or undertake projects through incorporated and unincorporated joint ventures with third parties. There is a risk of arrangements financial failure or default by a participant in any joint venture to
Slide 45: Key risks (continued)
Key risks (continued) For personal use only Mineral Resource and The volume and quality of the commodities that IGO recovers may be less than the estimates previously provided to shareholders. While IGO’s Ore Reserve estimates Mineral Resources and Ore Reserves estimates are prepared in accordance w
Slide 46: Key risks (continued)
Key risks (continued) For personal use only Security of tenure IGO cannot guarantee that all or any licences or permits in which IGO has interests will be renewed. Such renewals are at the discretion of relevant government bodies and ministries in the jurisdiction, and often depends on IGO being suc
Slide 47: Key risks (continued)
Key risks (continued) For personal use only Export and import The import and export policies of any jurisdiction in which IGO operates or sells product to may change in the future. As the revenues of IGO depend regulations upon the process of exporting commodities, the profitability and financial po
Slide 48: Key risks (continued)
Key risks (continued) For personal use only General risks Commodity price IGO’s revenues and cash flows are largely derived from the sale of a variety of commodities, including nickel, copper, zinc, silver and gold. IGO’s volatility financial performance will be exposed to fluctuations in the prices
Slide 49: Key risks (continued)
Key risks (continued) For personal use only Dividends IGO’s dividend policy is to maintain a minimum dividend payout ratio of 30% of NPAT (excluding non-recurring items), rounded to the nearest whole cent. However, the payment of dividends (if any) by IGO is determined by the IGO board from time to
Slide 50: Appendix C. International Offer Restrictions
For personal use only Appendix C. International Offer Restrictions
Slide 51: International offer restrictions
International offer restrictions For personal use only This document does not constitute an offer of new ordinary shares ("New Shares") of Independence Group NL (the “Company”) in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and t
Slide 52: International offer restrictions (continued)
International offer restrictions (continued) For personal use only Canada (British Columbia, The following is a summary of the statutory rights of rescission or to damages, or both, available to purchasers in Ontario. In Ontario, every purchaser Ontario and Quebec of the New Shares purchased pursuan
Slide 53: International offer restrictions (continued)
International offer restrictions (continued) For personal use only France This document is not being distributed in the context of a public offering of financial securities (offre au public de titres financiers) in France within the meaning of Article L.411-1 of the French Monetary and Financial Cod
Slide 54: International offer restrictions (continued)
International offer restrictions (continued) For personal use only Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has it been authorised by the Securities a
Slide 55: International offer restrictions (continued)
International offer restrictions (continued) For personal use only Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any
Slide 56: International offer restrictions (continued)
For personal use only United Kingdom Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Market
Slide 57: igo.com.au
© AS WE GO FROM UL STRENGTH TO STRENGTH igo.com.au
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