Igo Limited · ASX:IGO
Igo — Independence Group NL — Australian Nickel Conference 2019
37 slides from Igo's conference presentation, Oct 15, 2019
Slide 1: Australian Nickel Conference
For personal use only Independence Group NL Australian Nickel Conference 15 October 2019
Slide 2: Nickel Market
For personal use only Nickel Market 2
Slide 3: Market deficits expected to be positive for nickel price
Nickel Market Market deficits expected to be positive for nickel price For personal use only Nickel Stockpiles (t) Nickel Price (US$/t) 600,000 25,000 500,000 20,000 400,000 Consensus forecast nickel price range 15,000 300,000 LME Stockpile (11 October 2019) 10,000 200,000 98,600t 100,000 5,000 5,00
Slide 4: Clean Energy Metals
For personal use only Clean Energy Metals 4
Slide 5: EV sales are increasing rapidly
Electric Vehicles EV sales are increasing rapidly For personal use only Outlook for passenger electrification(1,2) (% of sales) 70% 600 Higher energy density and improved Profile of installed solar PV safety of batteries is driving new 60% cells from 1998 - 2016 500 applications 50% 400 40% Potentia
Slide 6: Multiple factors driving strong demand growth for EVs
Electric Vehicles Multiple factors driving strong demand growth for EVs For personal use only Falling battery cost and CO2 regulations driving sales(1) EV Sales US$/kWh Subsidies, regulation and penalties (Millions) and g/km 50 250 45 Investment in recharge 40 200 infrastructure 35 30 150 25 Improve
Slide 7: Higher nickel intensities improve battery performance and range
Battery Chemistry Higher nickel intensities improve battery performance and range For personal use only EV batteries becoming more nickel intensive(1) NMC (811) or NCA in 80% of EVs by 2025(2) +75kg of nickel in a 2019 Tesla Model S 30.2% 36.2% 71.9% 82.3% 73.1% NMC (111) NMC (433) NMC (811) NCA NCA
Slide 8: Making a Difference
Making a Difference IGO - strategically focused on metals critical to clean energy For personal use only Globally High-quality Relevant Products Vertically Proactively Integrated Green People 8
Slide 9: Corporate Overview
Corporate Overview Portfolio of high quality operating and exploration assets For personal use only Market Capitalisation(1) Shares on Issue(1) A$3.6 billion 590 million Cash(2) Debt(2) A$348 million A$86 million Shareholders(3) Institutional vs Retail Institutional holders by Geography 28% 34% 66%
Slide 10: Nova Nickel Operation
For personal use only Nova Nickel Operation 10
Slide 11: Outstanding operational performance and financial returns
Nova Outstanding operational performance and financial returns For personal use only Strong metal Nickel Copper Cobalt production in FY19 in Concentrate in Concentrate in Concentrate – exceeded 30,708t 13,693t 1,090t guidance ▲38% YoY ▲ 43% YoY ▲ 47% YoY Low cost Cash Costs AISC FY19 FCF Margin oper
Slide 12: Track record of outperformance
Nova Track record of outperformance For personal use only Nova Production & Cash Costs Tonnes Average quarterly A$/lb Improving production profile and 9,000 production rate from $4.50 reducing cash costs 8,000 feasibility study $4.00 7,000 $3.50 6,000 $3.00 5,000 $2.50 Free Cash Flow generated since
Slide 13: Capital development and grade control drilling complete
Nova Capital development and grade control drilling complete For personal use only 13
Slide 14: Nova – Smart Solutions
Nova – Smart Solutions Leveraging innovation and technology to optimise operations For personal use only Hybrid solar/diesel power generation Electronic tracking of personnel and equipment Remote bogging and blasting Drone technology 14
Slide 15: Exploration
For personal use only Exploration 15
Slide 16: Lack of investment in exploration is exacerbating the supply deficit
Nickel Market Lack of investment in exploration is exacerbating the supply deficit For personal use only Global nickel exploration budgets (US$M) 1,400 1,200 1,000 800 600 400 200 - 1) Source: S&P Market Intelligence 16
Slide 17: Tier-1 discoveries are becoming less frequent
Trends in Discovery Tier-1 discoveries are becoming less frequent For personal use only Number of Tier-1 discoveries since 1900 200 150 100 ? 50 1900 2017 1) Source: Minex Consulting 17
Slide 18: Increased exploration budget in FY20
Committed to Greenfields Exploration Increased exploration budget in FY20 For personal use only FY20 Exploration Budget A$6M A$3M A$3M A$4M A$66M A$26M A$24M Tropicana Nova Fraser Range West Kimberley Lake Mackay Other Greenfields & Generative 18
Slide 19: Aggressive exploration program at and near Nova
Nova Exploration Aggressive exploration program at and near Nova For personal use only Higher budget in FY20 to fund accelerated exploration program Multiple targets identified, with majority to be drilled in current drill season Objective is to deliver discovery success within trucking distance of
Slide 20: Nova intrusive system larger than originally apparent
Nova System Nova intrusive system now understood to be larger than was originally apparent For personal use only Interpreted magmatic intrusions over the Nova mining lease Drilling of 3D Seismic targets has confirmed a larger, live mineralised system Corridor of stacked intrusions identified through
Slide 21: Fraser Range
Fraser Range Belt-scale opportunity with a pipeline of targets For personal use only Extensive exploration program across the consolidated Fraser Range belt in FY20 FY20 Drilling Budget: Aircore: 100,000m Diamond: 60,000m Disciplined exploration strategy leveraging state-of-the-art geophysics and ge
Slide 22: Nickel Value Optimisation
For personal use only Nickel Value Optimisation 22
Slide 23: Parallel workstreams to deliver improved value from Nova nickel concentrate
Nickel Value Optimisation Parallel workstreams to deliver improved value from Nova nickel concentrate For personal use only Concentrate offtake Potential to negotiate Established reputation of agreement tender Nova concentrate quality improved commercial process terms Workstreams to be completed imm
Slide 24: Downstream Processing
Downstream Processing IGO Process designed to convert nickel sulphide concentrate into nickel sulphate For personal use only High metal extraction Lower cost (1) Lower emissions(1) Lower waste(1) 1) Compared to existing alternative processes to convert nickel concentrate to nickel sulphate 24
Slide 25: Tropicana Joint Venture
For personal use only Tropicana Joint Venture (IGO 30%, AngloGold Ashanti 70% and manager) 25
Slide 26: Tropicana Performance
Tropicana Performance A core asset, not aligned to strategy For personal use only Tropicana Production (100%) and AISC oz A$/oz Strong history of gold production and cost 160,000 $1,400 performance 140,000 $1,200 120,000 $1,000 100,000 $800 FY19 Result 80,000 Production (IGO share): 154,402oz 60,000
Slide 27: Tropicana Opportunity
Tropicana Opportunity Significant potential for value uplift from underground and exploration For personal use only 1) Refer ASX Announcement titled “CY18 Mineral Resources and Ore Reserve Statement”, released 20 February 2019 27
Slide 28: Summary
For personal use only Summary 28
Slide 29: IGO well positioned to deliver value and growth for shareholders
Summary IGO well positioned to deliver value and growth for shareholders For personal use only Operations Unlocking Value Exploration Outstanding Nickel sulphate Ongoing optimisation Enduring commitment operational downstream PFS to increase to exploration and performance from completion during prod
Slide 30: Making a Difference
For personal use only We believe in a world where people power makes amazing things happen. Where technology opens up new horizons and clean energy makes the planet a better place for every generation to come. We are bold, passionate, fearless and fun - a smarter, kinder, more innovative company. Ou
Slide 31: Cautionary Statements & Disclaimer
Cautionary Statements & Disclaimer • This presentation has been prepared by Independence Group NL (“IGO”) (ABN 46 092 786 304). It should not be considered as an offer or invitation to subscribe for or purchase any For personal use only securities in IGO or as an inducement to make an offer or invit
Slide 32: Competent Person's Statement
Competent Person’s Statement • Any references to IGO Mineral Resource and Ore Reserve estimates should be read in conjunction with IGO’s Annual Update of Exploration Results, Mineral Resources and Ore Reserves For personal use only dated 20 February 2019 (Annual Statement) and lodged with the ASX fo
Slide 33: FY19 Financial Results
FY19 Financial Results Operational outperformance delivered record financial results in FY19 For personal use only Revenue (A$M) Underlying EBITDA(1) (A$M) Net Profit After Tax (A$M) 900 781 793 400 100 800 339 341 76 350 80 700 60 53 300 600 40 250 17 500 417 422 20 200 400 138 151 0 150 300 -20 20
Slide 34: Nova – FY19 Results
Nova – FY19 Results Outstanding operational performance and financial returns For personal use only Strong metal Nickel Copper Cobalt production in FY19 in Concentrate in Concentrate in Concentrate – exceeded 30,708t 13,693t 1,090t guidance ▲38% YoY ▲ 43% YoY ▲ 47% YoY Low cost Cash Costs AISC FY19
Slide 35: Nova – FY20 Guidance
For personal use only Nova – FY20 Guidance (1) Nova Metric Units FY20 Guidance Nickel in concentrate t 27,000 – 30,000 Copper in concentrate t 11,000 – 12,500 Cobalt in concentrate t 850 – 950 Cash cost (payable)(2) A$/Ib Ni 2.00 – 2.50 Sustaining/ improvement Capex A$M 24 – 26 Development Capex A$M
Slide 36: Tropicana – FY19 Results
Tropicana – FY19 Results High margin gold production continued in FY19 For personal use only Gold Produced (100%) Gold Sold (IGO 30%) Gold production 518,172oz 154,402oz within guidance ▲ 11% YoY ▲ 11% YoY Cash Costs AISC FY19 EBITDA Margin Lower YoY cash costs delivering A$680/oz A$951/oz 62% high
Slide 37: Tropicana – FY20 Guidance
For personal use only Tropicana – FY20 Guidance (1) Tropicana Metric Units FY20 Guidance Gold produced (100%) oz 450,000 – 500,000 Gold Sold (IGO 30%) oz 135,000 – 150,000 Cash cost A$/oz 700 – 780 AISC A$/oz 1,090 – 1,210 Sustaining/improvement (30%) A$M 13 – 15 Waste stripping (30%) A$M 42 – 47 Un
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