Igo Limited · ASX:IGO
Igo — Independence Group NL — Q2 FY2018 Earnings Presentation
31 slides from Igo's earnings presentation, Feb 6, 2018
Slide 1: Investor Information Booklet
INDEPENDENCE GROUP NL For personal use only Investor Information Booklet Nova and Tropicana underpin strong 2Q18 quarterly result February 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: 2Q18 Highlights
2Q18 Highlights Nova and Tropicana underpin strong quarterly result For personal use only • Nova production and costs within guidance range ─ Ore mining/milling rate better than nameplate in December ─ Improved metallurgical recoveries ─ Bollinger stoping commenced • Tropicana gold production, cash
Slide 4: Corporate Summary
Corporate Summary Positioned for a strong 2H18 For personal use only A$M FY17 YTD Share Ownership Revenue 422 355 Substantial Holders(5) Institutional Ownership(4) Underlying EBITDA(1) 151 133 Mark Creasy 16% Australia 62% Net Profit after Tax 17 3 FIL 9% USA & Canada 27% Cash Flow from Operations(2
Slide 5: A Company with Purpose
A Company with Purpose To create long-term shareholder value For personal use only IGO EBITDA Profile (A$M)(1) 600 500 400 300 200 100 0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18e FY19e FY20e Long ($M) Jaguar ($M) Tropicana ($M) Nova ($M) 1) Euroz Research – 31 Jan 2018 5
Slide 6: Sustainability
Sustainability Focused on better outcomes for our people Key Lag Safety Metrics(1,2,3) For personal use only 9 • No lost time injuries during the Quarter bringing 8 LTIFR(2) down to 2.09 7 LTIFR 12 MMA 6 MTIFR 12 MMA • Visible safety leadership focus continues driving 5 significant improvement in le
Slide 7: Strengthening Financial Results
Strengthening Financial Results Balance sheet continuing to strengthen with net debt reduced to A$120M For personal use only Units 1Q18 2Q18 YTD Revenue and Other Income A$M 147.5 207.3 354.8 Underlying EBITDA(1) A$M 68.9 64.5 133.4 Profit (Loss) After Tax A$M 4.7 (1.5) 3.2 Net Cash from Operating A
Slide 8: 2Q18 Cash Flow Reconciliation
2Q18 Cash Flow Reconciliation Cash flow lower due to timing of A$27M December sales receipts For personal use only A$M 70 60 4 5 13 2 50 11 5 40 29 30 7 51 20 29 10 - Cash at 30 Sep Nova FCF Tropicana FCF Jaguar FCF Long FCF Exploration & BD Corporate & Proceeds from Net Finance/ Cash at 31 Dec 2017
Slide 9: Nova
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 25,000t Ni (contained metal in 11,000t Cu concentrate) 925t Co Operatin
Slide 10: Nova: Nickel production and costs within guidance
Nova Nickel production and costs within guidance, and improved metallurgical recoveries QoQ For personal use only Tonnes Metric Units 1Q18 2Q18 YTD Guidance(1) Nova Production 5,000 4,500 4,454 Nickel in concentrate t 4,500 4,454 8,954 7,500 – 9,000 4,500 4,000 Copper in concentrate t 1,832 2,011 3,
Slide 11: Nova Grade Control
Nova Grade Control(1) Early de-risking of mineral resource For personal use only • Grade control drilling well progressed • Nova main orebody complete with final drilling to commence on the Upper Nova levels Plan view of Nova- Red traces = Remaining Diamond drilling • Drilling of Bollinger Inferred
Slide 12: Nova Mining Lease Exploration
Nova Mining Lease Exploration 3D Seismic program to commence in 3Q18 For personal use only Initial work program completed in 1Q18: • Drilled historical EM plates • Drilled Western Mafic complex • Drilled several stratigraphic holes on the 2D seismic line to aid planning for 3D seismic program Positi
Slide 13: Nova Mining Lease Exploration
Nova Mining Lease Exploration Near mine exploration space is wide open For personal use only 13
Slide 14: Nickel and Cobalt Sulphate
Nickel and Cobalt Sulphate LME Nickel Versus Nickel Sulphate (US$/t)(1,2) Nova Downstream Processing Potential US$/t For personal use only 23,000 Scoping study underway to investigate the potential for downstream processing to produce 21,000 nickel and cobalt sulphates 19,000 • Expected to be comple
Slide 15: 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 465koz 139.5koz Operating cost Guidance Cash cost AISC FY18 A$715/
Slide 16: Tropicana: Production, cash costs and AISC better than guidance
Tropicana Production, cash costs and AISC significantly better than guidance For personal use only Tropicana Metric Units 1Q18 2Q18 YTD Guidance(2) koz Production (100%) and AISC A$/oz 160 1,400 Gold produced (100%) koz 114.1 135.2 249.3 220.0 – 245.0 1,229 1,286 140 1,167 1,200 Gold Sold (IGO 30%)
Slide 17: Transitioning to Long Island Strategy
Tropicana Transitioning to Long Island Strategy For personal use only Based on strip mining and in-pit waste dumping Directional Production and AISC(1) • Possible due to tabular geometry and strike extent koz A$/oz Step change in mining costs 750 1,500 • Transition to face shovels • Bigger benches t
Slide 18: Boston Shaker drilling and underground studies continue
Tropicana Boston Shaker drilling and underground studies continue For personal use only Underground drilling returned significant intercepts • 18m at 6.58g/t Au from 587m • 37m at 6.49g/t Au from 509m • 20m at 5.82g/t Au from 609m Next steps: • Drill program scheduled for completion 3Q18 • Scoping s
Slide 19: 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 31,000t Zn (contained metal in 2,800t Cu concentrate) Operating cost
Slide 20: Jaguar zinc guidance met YTD
Jaguar Jaguar zinc guidance met YTD, with production expected to increase QoQ in 3Q18 For personal use only Metric Units 1Q18 2Q18 YTD Guidance(1) Tonnes Jaguar Production 9,000 8,105 Zinc in concentrate t 8,105 6,885 14,990 14,500 – 16,500 8,000 7,399 6,599 6,885 7,000 Copper in concentrate t 530 5
Slide 21: 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) 54,000t Ni Reserve(1) 6,200t Ni Production Guidance FY18 (contained metal in 5,700t Ni concentrate) Operating cost Guidance A$4.65/lb F
Slide 22: Long production guidance met YTD
Long Long production guidance met YTD For personal use only Tonnes Long Production Metric Units 1Q18 2Q18 YTD Guidance(1) 2,500 2,136 Contained nickel produced t 1,572 1,374 2,946 2,700 – 3,000 2,069 2,000 Cash cost (payable) A$/lb Ni 4.80 5.47 5.10 4.40 – 4.90 1,572 1,500 1,374 Sustaining capex A$M
Slide 23: FY18 Exploration
FY18 Exploration A$50M commitment to exploration in FY18 For personal use only FY18 Exploration Budget A$10M Fraser Range Nova A$1.5M A$21M Tropicana A$4M Jaguar Long A$4.5M Other Greenfields A$9M 23
Slide 24: Why Explore in the Fraser Range
Why Explore in the Fraser Range Creation of Belt Scale opportunity by consolidation of 14,300km2 For personal use only September 2015 February 2018 >330% tenure increase 24
Slide 25: Why Explore in the Fraser Range
Why Explore in the Fraser Range “Where there’s smoke there’s fire” For personal use only • Several mafic/ultramafic intrusions are known to occur along the Fraser Range • Multiple companies have reported magmatic Ni-Cu sulphides in mafic and ultramafic rocks along the entire belt • Sulphide occurren
Slide 26: Magmatic Sulphide Mineralisation
Magmatic Sulphide Mineralisation What do mafic Ni-Cu deposits and camps look like – Voisey’s Bay example For personal use only Deposit analogues • Chonoliths have a small footprint • The small size is important to the genesis of world class deposits Scale 1500E 3000E 4500E 6000E 00 2 Approximate Sur
Slide 27: Fraser Range Exploration
Fraser Range Exploration Multiple systematic work programs For personal use only Systematic belt scale exploration activities continued during 2Q18: • Spectrem and downhole EM surveys ongoing, which have identified conductors • Ongoing gravity survey and mapping • Aircore program with 88,183m drille
Slide 28: Lake Mackay Exploration
Lake Mackay Exploration Belt scale greenfields project For personal use only Total area under granted licences and applications increased to 12,800km2 • 6 new exploration licence applications added First diamond drilling at Grapple(1,2) • Six holes completed for 2,917m • Multiple narrow sulphide int
Slide 29: Stockman divestment and management changes
Corporate Update For personal use only Divestment of Stockman Project to CopperChem completed in December 2017(1) • Proceeds of A$11.2M were received at completion • A$21M cash payments are scheduled to be received during the 12 months following completion Change of Chief Operating Officer effected
Slide 30: Concluding Comments
Concluding Comments • A strong 2Q18 with Nova nickel production For personal use only and costs within guidance ─ Improved metallurgical recoveries ─ Bollinger stoping commenced • Solid contributions from Tropicana, Jaguar and Long • Tropicana Long Island Phase One and second ball mill installation
Slide 31: For personal use only
a el a “FOLLOW US ~ UAS WE GO FROM STRENGTH TO STRENGTH igo.com.au
Independence Group NL — Q2 FY2018 Earnings Presentation on 6ix