IGO LIMITED — Annual Report 2011

Aug 30, 2011

==> picture [315 x 92] intentionally omitted <==

31 August 2011

Australian Securities Exchange Company Announcements Level 4, 20 Bridge Street SYDNEY NSW 2000

No. of Pages: (17)

2011 FINAL DIVIDEND DISTRIBUTION AND PRELIMINARY FINAL RESULT

FINAL DIVIDEND 2011

Independence Group NL is pleased to announce that a final dividend of 3 cents per share will be paid to shareholders based upon the financial results for the year ending 30 June 2011.

The dividend will be fully franked.

The dividend will be paid on 30 September 2011.

The record date to determine dividend entitlements is 15 September 2011.

PRELIMINARY FINAL RESULTS

Preliminary Final Report information is attached to this announcement.

==> picture [106 x 31] intentionally omitted <==

Christopher Bonwick Managing Director Independence Group NL

Att.

==> picture [416 x 20] intentionally omitted <==

INDEPENDENCE GROUP NL AND CONTROLLED ENTITIES ABN 46 092 786 304

PRELIMINARY FINAL REPORT INFORMATION – 1 JULY 2010 TO 30 JUNE 2011 LODGED WITH THE ASX UNDER LISTING RULE 4.3A

CONTENTS PAGE
Key Information – Results for Announcement to the Market ……………… 2
Preliminary Final Report
Review of Operations ………………………………………………………….... 4
Consolidated Statement of Comprehensive Income …………………………….. 5
Consolidated Statement of Financial Position …………………………………... 6
Consolidated Statement of Cash Flows ………………………………………..... 7
Consolidated Statement of Changes in Equity ………………………………….. 8
Notes to the Consolidated Financial Statements ………………………………… 9

Page 1

INDEPENDENCE GROUP NL AND CONTROLLED ENTITIES ABN 46 092 786 304

PRELIMINARY FINAL REPORT INFORMATION – 1 JULY 2010 TO 30 JUNE 2011 LODGED WITH THE ASX UNDER LISTING RULE 4.3A

Key Information – Results for Announcement to the Market

	$’000	% Increase/(Decrease) over Previous Corresponding Period
Revenue from continuing operations	162,497	39.3%
Profit from continuing operations after tax attributable to members	5,533	(80.7)%
Net profit attributable to members	5,533	(80.7)%

The previous corresponding period is the year ended 30 June 2010.

	2011	2010
Basic earnings per share (cents)	3.89	25.28
Diluted earnings per share (cents)	3.88	25.27
Net tangible assets per share (cents)	446.71	239.46

A number of factors have contributed to above results which are outlined below.

Revenue from continuing operations

During the financial year, the Company acquired a 100% interest in Jabiru Metals Limited (Jabiru), pursuant to the terms of an off-market takeover offer. The financial results of Jabiru have been consolidated from 1 April 2011, the date on which control was achieved. Refer to note 9 of this preliminary final report for further information. Revenue from continuing operations includes revenue from Jabiru for the three months ended 30 June 2011 of $16,411 thousand. In addition, spot nickel prices during 2011 were higher (by approximately US$4,578/tonne) than in the previous corresponding period.

Other than the acquisition described above, there have been no other acquisitions of entities or losses over control of entities during the period.

Page 2

Net profit attributable to members

The profit results can be summarised by movements before and after the acquisition of Jabiru:

$’000					Independence Group 3 months to 30 June 2011	Independence Group 3 months to 30 June 2011	The Company 12 months to 30 June 2011 "Post **acquisition" **
Revenue from sale of goods and other income		98,061		16,411a		36,889	151,361
Jabiru takeover related costs		(324)		(4,113)		(16,696)b	(21,133)
Other costs within EBITDA		(53,548)		(23,948)		(22,278)	(99,774)
EBITDA		44,189		(11,650)		(2,085)	30,454
Interest revenue		8,282		37		3,298	11,617
Depreciation & amortisation		(14,268)		(8,881)		(4,219)	(27,368)
Finance costs		(81)		(304)		(33)	(418)
Profit (loss) before tax		38,122		(20,798)		(3,039)	14,285
Tax expense		(10,805)		6,240		(4,187)b	(8,752)
Net profit (loss)		27,317		(14,558)b		(7,226)	5,533b

• a. During the June quarter Jaguar production was lower than originally forecast due to geotechnical issues, which required a change in ground support methodology, as the ASX was previously advised by Jabiru. Production from high grade stopes was suspended to enable additional ground support to be installed. As a consequence mill feed comprised ore from lower grade stopes and low grade surface stockpiles, resulting in lower head grades and metal production. This adversely impacted Jabiru’s revenue and profits for the quarter.

Based on the current improvement in copper and zinc head grades, it is expected that the Jaguar mine will return to normalised production in the September quarter. There have not been any losses in the Jaguar copper/zinc/silver operation ore reserves or mineral resources since the takeover of Jabiru and mining of high grade copper stopes has commenced. Considerable potential exists for additional discoveries on the Teutonic Bore tenements and for extensions to existing deposits. We also note that mining at Bentley has commenced.

• b. Underlying consolidated net profit after tax, prior to accounting for the acquisition of Jabiru, is estimated to be $37,792 thousand. This amount is arrived at by eliminating from the Company’s NPAT of $5,533 thousand; Jabiru’s 3 months net loss of $14,558 thousand and Independence Group’s share of after tax Jabiru takeover related costs of $16,696 thousand.

• c. The Company’s Long Nickel operations recorded an outstanding performance with total production for the year of 9,753 nickel tonnes at an average head grade of 4.34% (FY’10: 8,615 nickel tonnes). Cash costs per payable pound remained one of the lowest globally at A$4.48/lb (FY’10: A$4.44). A continued focus on cost control saw overall unit cash operating costs in line with budget (A$4.40/lb-A$4.60/lb) with production exceeding budget.

The Company paid a fully franked interim dividend of 4 cents per share from 2010/11 cashflows and profits. The Company has announced a fully franked 2010/11 final dividend of 3 cents per share which will be paid on 30 September 2011. The record date for determining dividend entitlements is 15 September 2011.

Page 3

INDEPENDENCE GROUP NL AND CONTROLLED ENTITIES ABN 46 092 786 304

Review of Operations

A summary of consolidated revenues and results for the year by significant industry segments is set out below: Segment revenues Segment results 2011 2010 2011 2010 $’000 $’000 $’000 $’000 Long nickel mine 139,723 115,767 63,250 53,083 Jaguar copper and zinc mine 16,454 - (14,375) - Tropicana gold project - - (815) - Other regional exploration - - (7,568) (6,248) Unallocated revenue - - - - 156,177 115,767 40,492 46,835 Unallocated revenue less unallocated expenses (26,207) (6,422) Profit before income tax 14,285 40,413 Income tax expense (8,752) (11,673) Profit after income tax 5,533 28,740 Net profit attributable to members of Independence Group NL 5,533 28,740	A summary of consolidated revenues and results for the year by significant industry segments is set out below: Segment revenues Segment results 2011 2010 2011 2010 $’000 $’000 $’000 $’000 Long nickel mine 139,723 115,767 63,250 53,083 Jaguar copper and zinc mine 16,454 - (14,375) - Tropicana gold project - - (815) - Other regional exploration - - (7,568) (6,248) Unallocated revenue - - - - 156,177 115,767 40,492 46,835 Unallocated revenue less unallocated expenses (26,207) (6,422) Profit before income tax 14,285 40,413 Income tax expense (8,752) (11,673) Profit after income tax 5,533 28,740 Net profit attributable to members of Independence Group NL 5,533 28,740	A summary of consolidated revenues and results for the year by significant industry segments is set out below: Segment revenues Segment results 2011 2010 2011 2010 $’000 $’000 $’000 $’000 Long nickel mine 139,723 115,767 63,250 53,083 Jaguar copper and zinc mine 16,454 - (14,375) - Tropicana gold project - - (815) - Other regional exploration - - (7,568) (6,248) Unallocated revenue - - - - 156,177 115,767 40,492 46,835 Unallocated revenue less unallocated expenses (26,207) (6,422) Profit before income tax 14,285 40,413 Income tax expense (8,752) (11,673) Profit after income tax 5,533 28,740 Net profit attributable to members of Independence Group NL 5,533 28,740
	156,177 115,767	40,492 46,835 (26,207) (6,422)
		14,285 40,413 (8,752) (11,673)
		5,533 28,740
		5,533 28,740

Comments on the operations and the results of those operations are set out below:

a) Long nickel mine

This division consists of Lightning Nickel Pty Ltd’s Kambalda operation, the Long Nickel Mine.

b) Jaguar copper and zinc mine

This division consists of Jabiru Metals Limited’s operations; the Jaguar and Bentley mines. This segment was established following the acquisition of Jabiru Metals Limited in April 2011.

c) Tropicana gold project

• This division consists of the Group’s expenditure on the Tropicana Joint Venture. The project is currently in the development and construction phase of a gold mine. The project is managed by AngloGold Ashanti Australia Limited (70%) and the Company has a 30% interest in the project.

d) Other regional exploration

Exploration expenditure is incurred throughout Australia. The exploration activities reflected in this segment relate to exploration expenditure incurred on projects excluding Tropicana and expenditure at the Long nickel and Jaguar copper and zinc mines.

Profit from ordinary activities before related income tax decreased by $26,128 thousand (64.6%) to $14,285 thousand.

Rounding of amounts to nearest thousand dollars

The company is of a kind referred to in Class Order 98/0100 issued by the Australian Securities & Investments Commission, relating to the “rounding off” of amounts in the directors’ report and financial report. Amounts in the directors’ report and financial report have been rounded off to the nearest thousand dollars in accordance with that Class Order.

Page 4

INDEPENDENCE GROUP NL AND CONTROLLED ENTITIES ABN 46 092 786 304

Consolidated Statement of Comprehensive Income For the year ended 30 June 2011

Notes Revenue from continuing operations 2 Other income Mining and development costs Employee benefits expense Share-based payment expense Revaluation (devaluation) of listed investments Depreciation and amortisation expenses Exploration costs expensed Capitalised exploration costs written off Provision for mine rehabilitation Ore tolling costs Royalty expense Net gains on fair value financial liabilities Costs associated with the acquisition of subsidiary Other expenses Profit before income tax Income tax expense Profit for the period Other comprehensive income Effective portion of changes in fair value of cash flow hedges Other comprehensive income/(expense) for the year, net of tax Total comprehensive income for the period Profit attributable to the members of Independence Group NL Total comprehensive income for the period attributable to the members of Independence Group NL Basic earnings per share Diluted earnings per share		Consolidated 2011 2010 $’000 $’000 162,497 116,670 481 30 (39,716) (18,856) (28,788) (19,966) (17) (87) 760 (554) (27,368) (11,400) (2,416) (2,291) (7,186) (4,977) (109) (28) (8,309) (7,512) (7,586) (4,920) 2,509 - (21,133) - (9,334) (5,696)	Consolidated 2011 2010 $’000 $’000 162,497 116,670 481 30 (39,716) (18,856) (28,788) (19,966) (17) (87) 760 (554) (27,368) (11,400) (2,416) (2,291) (7,186) (4,977) (109) (28) (8,309) (7,512) (7,586) (4,920) 2,509 - (21,133) - (9,334) (5,696)
		14,285 (8,752)	40,413 (11,673)
		5,533 11,065	28,740 (4,273)
		11,065	(4,273)
		16,598	24,467
		5,533 16,598 Cents 3.89 3.88	28,740 24,467 Cents 25.28 25.27

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

Page 5

INDEPENDENCE GROUP NL AND CONTROLLED ENTITIES ABN 46 092 786 304

Consolidated Statement of Financial Position As at 30 June 2011

Notes Current assets Cash and cash equivalents Trade and other receivables Current tax receivable Inventories Financial assets 3 Derivative financial instruments 6 Total current assets Non-current assets Trade and other receivables Property, plant and equipment Exploration and evaluation expenditure 4 Mine properties 5 Deferred tax assets Investments accounted for using the equity method Intangible assets Derivative financial instruments 6 Total non-current assets Total assets Current liabilities Trade and other payables Derivative financial instruments 6 Borrowings Current tax payable Provisions Financial liabilities at fair value through profit or loss Total current liabilities Non-current liabilities Borrowings Derivative financial instruments 6 Deferred tax liabilities Provisions Financial liabilities at fair value through profit or loss Total non-current liabilities Total liabilities Net assets Equity Share capital 7 Reserves 8 Retained earnings 8 Total equity	Consolidated 2011 2010 $‘000 $‘000 228,001 143,957 28,762 21,565 7,541 - 20,908 257 6,849 621 16,997 2,832
	309,058 169,232
	1,016 6 86,255 5,070 256,233 49,302 163,690 37,790 99,729 7,267 - 117 117,515 1,006 8,243 3,756
	732,681 104,314
	1,041,739 273,546
	60,994 17,107 15,014 13,922 5,789 - - 2,299 705 - 11,303 -
	93,805 33,328
	5,694 - - 3,696 111,233 20,335 11,402 1,407 5,725 -
	134,054 25,438
	227,859 58,766
	813,880 214,780
	617,860 29,552 12,483 (1,741) 183,537 186,969
	813,880 214,780

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

Page 6

INDEPENDENCE GROUP NL AND CONTROLLED ENTITIES ABN 46 092 786 304

Consolidated Statement of Cash Flows

For the year ended 30 June 2011

Cash flows from operating activities Receipts from customers (inclusive of goods and services tax) Payments to suppliers and employees (inclusive of goods and services tax) Finance costs Income tax payments Income tax receipts Exploration expenditure Other income Net cash from operating activities Cash flows from investing activities Interest received Payment for unlisted investments Payments for listed investments Payments for property, plant and equipment Proceeds from sale property, plant and equipment Payments for capitalised development costs Payments for exploration and evaluation expenditure Payments for acquisition of subsidiary, net of cash acquired Net cash used in investing activities Cash flows from financing activities Proceeds from issues of share capital Finance lease payments Share issue costs Payment of dividends Net cash from (used in) financing activities Net increase in cash held Cash and cash equivalents at the beginning of the reporting period Cash and cash equivalents at the end of the reporting period	Consolidated 2011 2010 $‘000 $‘000 174,418 118,512 (109,673) (53,116)
	64,745 65,396 (268) - (9,805) (7,565) 541 3,347 (2,416) (2,291) 19 30
	52,816 58,917
	9,897 5,075 - (93) (2,774) - (19,819) (1,987) 581 - (33,785) (16,110) (32,023) (23,874) (43,048) -
	(120,971) (36,989)
	169,266 474 (1,222) - (6,880) - (8,965) (5,683)
	152,199 (5,209)
	84,044 16,719 143,957 127,238
	228,001 143,957

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

Page 7

INDEPENDENCE GROUP NL AND CONTROLLED ENTITIES ABN 46 092 786 304

Consolidated Statement of Changes in Equity

For the year ended 30 June 2011

Consolidated	Issued Capital Retained Earnings Share-Based Payments Reserve Hedging Reserve Acquisition Reserve Total Equity
At 1 July 2009 Total comprehensive income for the period Profit for the period Other comprehensive income Profit (loss) on cash flow hedges, net of tax Total comprehensive income for the period Contributions by and distributions to owners Share-based payments Shares issued Dividends paid At 30 June 2010 At 1 July 2010 Total comprehensive income for the period Profit for the period Other comprehensive income Profit on cash flow hedges, net of tax Total comprehensive income for the period Contributions by and distributions to owners Share-based payments Shares issued Transaction costs on shares issued, net of tax Dividends paid Gain on acquisition of non- controlling interest At 30 June 2011	$’000 $’000 $’000 $’000 $000 $’000 29,078 163,912 3,954 (1,508) - 195,436 - 28,740 - - - 28,740 - - - (4,273) - (4,273)
	- 28,740 - (4,273) - 24,467 - - 86 - - 86 474 - - - - 474 - (5,683) - - - (5,683)
	29,552 186,969 4,040 (5,781) - 214,780
	29,552 186,969 4,040 (5,781) - 214,780 - 5,533 - - - 5,533 - - - 11,065 - 11,065
	- 5,533 - 11,065 - 16,598 - - 17 - - 17 593,537 - - - - 593,537 (5,229) - - - - (5,229) - (8,965) - - - (8,965) - - - - 3,142 3,142
	617,860 183,537 4,057 5,284 3,142 813,880

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

Page 8

INDEPENDENCE GROUP NL AND CONTROLLED ENTITIES ABN 46 092 786 304

Notes to the Consolidated Financial Statements For the year ended 30 June 2011

Note 1. Segment information

(a) Description of segments

Management has determined the operating segments based on the reports reviewed by the board that are used to make strategic decisions. The board of directors is the chief operating decision maker of the Group. The Group operates in predominately one geographic segment (ie. Australia) and has identified four operating segments, being the Long Nickel Mine which is disclosed under the Nickel mining segment, the Jaguar mine which is disclosed under the Copper and zinc mining segment, the Tropicana Project, and “other exploration” which is disclosed under Regional exploration activities.

The Long Nickel Mine produces nickel and copper from which its revenue is derived. All revenue derived by the Long Nickel Mine is received from one customer being BHP Billiton Nickel West Pty Ltd. The Resident Manager of the Long Nickel Mine is responsible for the budgets and expenditure of the mine, which includes exploration activities on the mine’s tenure. The Long Nickel Mine and exploration properties are owned by the Group’s subsidiary Lightning Nickel Pty Ltd.

The Jaguar mine primarily produces copper and zinc concentrate. Revenue is derived from a number of different customers. The Resident Manager of the Jaguar Mine is responsible for the budgets and expenditure of the mine, responsibility for ore concentrate sales rests with corporate management. This segment was established following the acquisition of Jabiru Metals Limited in April 2011.

The Tropicana Project represents the Group’s 30% joint venture interest in the Tropicana Gold Project. AngloGold Ashanti Australia is the manager of the project and holds the remaining 70% interest. Programs and budgets are provided by AngloGold Ashanti Australia and are considered for approval by the Independence Group NL board.

The Group’s Exploration Manager is responsible for budgets and expenditure by the Group’s regional exploration team. The Regional exploration division does not normally derive any income. Should a project generated by the Regional exploration division commence generating income or lead to the construction or acquisition of a mining operation, that operation would then be disaggregated from Regional exploration and become reportable as a separate segment.

Page 9

INDEPENDENCE GROUP NL AND CONTROLLED ENTITIES ABN 46 092 786 304

Notes to the Consolidated Financial Statements For the year ended 30 June 2011

Note 1. Segment information (continued)

(b) Segment information provided to the board

2011 External revenue Reportable segment profit (loss) before income tax Reportable segment assets Reportable segment liabilities 2010 External revenue Reportable segment profit before income tax expense Reportable segment assets Reportable segment liabilities	Nickel mining Copper and zinc mining Tropicana project Regional exploration activities Total $’000 $’000 $’000 $’000 $’000 139,723 16,454 - - 156,177
	63,250 (14,375) (815) (7,568) **40,492 **
	206,538 320,343 51,830 195,633 774,344
	31,156 39,371 3,980 32,849 107,356
	115,737 - - - 115,737
	53,083 - - (6,248) 46,835
	189,521 - 33,919 16,389 239,829
	34,305 - - - 34,305

The amounts provided to the board with respect to total assets are measured in a manner consistent with that of the financial statements. These assets are allocated based on the operations of the segment and the physical location of the asset.

A reconciliation of reportable segment profit or loss to operating profit before income tax is provided as follows:

Total profit or loss for reportable segments Interest revenue on corporate cash balances Unrealised gains (losses) on financial assets Share-based payments expense Other corporate costs Costs associated with the acquisition of subsidiary Net gains on silver hedge financing Profit before income tax from continuing operations	Consolidated 2011 2010 $‘000 $‘000 40,492 46,835 6,320 932 760 (554) (17) (87) (14,646) (6,713) (21,133) - 2,509 -
	14,285 40,413

Page 10

INDEPENDENCE GROUP NL AND CONTROLLED ENTITIES ABN 46 092 786 304

Notes to the Consolidated Financial Statements For the year ended 30 June 2011

Note 1. Segment information (continued)

A reconciliation of reportable segment assets to total assets is as follows:

Total assets for reportable segments Inter segment eliminations Deferred tax assets Listed and unlisted equity securities Current tax assets Cash and receivables held by the parent entity Office and general plant and equipment Goodwill Total assets as per the statement of financial position A reconciliation of reportable segment liabilities to total liabilities is as follows: Total liabilities for reportable segments Inter segment eliminations Deferred tax liabilities Current tax liabilities Creditors and accruals Financial liabilities at fair value through profit or loss Provision for employee entitlements Total liabilities as per the statement of financial position	Consolidated 2011 2010 $’000 $’000 774,344 239,829 (98,046) - 99,729 7,267 6,849 737 7,541 - 132,776 24,412 1,784 1,301 116,762 -
	1,041,739 273,546
	107,356 34,305 (30,164) - 111,233 20,335 - 2,299 19,212 1,469 17,028 - 3,194 358
	227,859 58,766

Note 2. Revenue

Revenue from continuing operations Sale of goods Other revenue Interest income Note 3. Financial assets Investments in Australian listed entities at market value	150,880 111,109
	11,617 5,561
	162,497 116,670
	6,849 621
	6,849 621

Page 11

INDEPENDENCE GROUP NL AND CONTROLLED ENTITIES ABN 46 092 786 304

Notes to the Consolidated Financial Statements For the year ended 30 June 2011

Note 4. Exploration and evaluation expenditure

Note 4. Exploration and evaluation expenditure
Exploration and evaluation expenditure Opening balance Current year’s expenditure Acquisition of subsidiary Transfers to mine properties in production Transfers to mine properties in development Written off during the year Disposals Note 5. Mine properties Mine properties in development (a) Mine properties in production (b) Mine acquisition costs (a) Mine properties in development Opening balance Current year’s expenditure Acquisition of subsidiary Transfer from property, plant and equipment Transfers from exploration and evaluation (b) Mine properties in production Opening balance Current year’s expenditure Acquisition of subsidiary Transfers from exploration and evaluation Transfer from mine acquisition costs Amortisation expense	Consolidated 2011 2010 $‘000 $‘000 49,302 33,118 31,781 23,962 186,618 - (2,294) (2,801) (988) - (7,186) (4,977) (1,000) -
	256,233 49,302
	89,770 - 73,920 37,064 - 726
	163,690 37,790
	- - 12,875 - 72,003 - 3,904 - 988 -
	89,770 -
	37,064 25,673 21,532 16,109 32,066 - 2,294 2,801 240 - (19,276) (7,519)
	73,920 37,064

Page 12

INDEPENDENCE GROUP NL AND CONTROLLED ENTITIES ABN 46 092 786 304

Notes to the Consolidated Financial Statements

For the year ended 30 June 2011

Note 6. Derivative financial instruments

Note 6. Derivative financial instruments	Note 6. Derivative financial instruments
Current assets Commodity hedging contracts – at fair value through profit or loss Foreign currency contracts – at fair value through profit or loss Foreign currency contracts – cash flow hedges Current liabilities Commodity hedging contracts – at fair value through profit or loss Commodity hedging contracts – cash flow hedges Non-current assets Commodity hedging contracts – cash flow hedges Foreign currency contracts – cash flow hedges Non-current liabilities Foreign currency contracts – cash flow hedges Note 7. Contributed equity Fully paid issued capital Movements in shares on issue 2011 2011 No. of Shares $’000 Balance at beginning of financial year 113,813,539 29,552 Issued during the year: - Share placement and rights issue 24,713,766 164,347 - Transaction costs, net of tax - (5,229) - Conversion of options 1,087,500 4,920 - Shares issued for acquisition of subsidiary 63,292,330 424,270 Balance at end of financial year 202,907,135 617,860			Consolidated 2011 2010 $‘000 $‘000 114 - 9,643 - 7,240 2,832
			16,997 2,832
			6,879 8,135 13,922
			15,014 13,922
			36 3,756 8,207 -
			8,243 3,756
			- 3,696
			- 3,696
			Consolidated 2011 2010 $‘000 $‘000 617,860 29,552
			2010 2010 No. of Shares $’000 113,613,539 29,078 - - - - 200,000 474 - -
	202,907,135 617,860		113,813,539 29,552

Page 13

INDEPENDENCE GROUP NL AND CONTROLLED ENTITIES ABN 46 092 786 304

Notes to the Consolidated Financial Statements

For the year ended 30 June 2011

Note 8. Retained earnings and reserves

(a) Reconciliation of retained earnings Balance at the beginning of the year Net profit attributable to members of Independence Group NL Total available for appropriation Dividends paid during the year Balance at the end of the year (b) Dividends paid Dividends paid during the year (fully franked) (c) Reserves Share-based payments reserve Hedge reserve Acquisition reserve	Consolidated 2011 2010 $‘000 $‘000 186,969 163,912 5,533 28,740
	192,502 192,652 (8,965) (5,683)
	183,537 186,969
	8,965 5,683
	4,057 4,040 5,284 (5,781) 3,142 -
	12,483 (1,741)

Note 9. Business combinations

(a) Summary of acquisition

During April 2011, the parent entity acquired 96.32% of the issued share capital of Jabiru Metals Limited (Jabiru) and declared the offer free from all conditions. By 9 June 2011, Independence Group NL had acquired 100% of the issued share capital of Jabiru. Jabiru was a listed public Australian company involved in the production and exploration of copper, zinc and silver.

Details of the purchase consideration, net assets acquired and goodwill are as follows:

Acquisition date fair value of consideration transferred (refer to (b) and (c) below): Cash paid Equity instruments issued Fair value of initial equity interest	2011 $000 48,579 409,357 848
	458,784

Page 14

INDEPENDENCE GROUP NL AND CONTROLLED ENTITIES ABN 46 092 786 304

Notes to the Consolidated Financial Statements For the year ended 30 June 2011

Note 9. Business combinations (continued)

The assets and liabilities recognised at the date of the acquisition are as follows:

Current assets Cash and cash equivalents Trade and other receivables Inventories Financial assets Derivative financial instruments Total current assets Non-current assets Receivables Property, plant and equipment Mine properties Exploration and evaluation expenditure Deferred tax assets Total non-current assets Total assets Current liabilities Trade and other payables Borrowings Derivative financial instruments Provisions Financial liabilities at fair value through profit or loss Total current liabilities Non-current liabilities Borrowings Provisions Financial liabilities at fair value through profit or loss Deferred tax liabilities Total non-current liabilities Total liabilities Net identifiable assets acquired Non-controlling interest in identifiable net assets acquired Goodwill Net assets acquired	Fair value $000 5,531 13,705 25,574 2,426 7,715
	54,951
	471 66,045 104,069 186,618 51,329
	408,532
	463,483
	19,160 4,415 7,787 314 13,235
	44,911
	3,288 8,845 9,520 37,347
	59,000
	103,911
	359,572 (17,550) 116,762
	458,784

There were no acquisitions in the year ending 30 June 2010.

Page 15

INDEPENDENCE GROUP NL AND CONTROLLED ENTITIES ABN 46 092 786 304

Notes to the Consolidated Financial Statements For the year ended 30 June 2011

Note 9. Business combinations (continued)

(b) Purchase consideration – cash outflow

b) Purchase consideration – cash outflow
Outflow of cash to acquire subsidiary, net of cash acquired Cash consideration Less: cash balances acquired with subsidiary Outflow of cash – investing activities	Consolidated 2011 2010 $’000 $’000 48,579 - (5,531) -
	43,048 -

Acquisition-related costs

Acquisition-related costs of $21,133 thousand (2010: $nil) are included in “costs associated with the acquisition of subsidiary” in the statement of comprehensive income.

(c) Additional acquisition of Jabiru Metals Limited

On 9 June 2011, Independence Group NL acquired the remaining 3.68% of voting shares of Jabiru Metals Limited by way of compulsory acquisition of outstanding shares. The difference between the carrying value of the non-controlling interest as at that date of $17,550 thousand and the fair value of the equity shares issued on that date of $14,408 thousand is recognised directly in equity attributable to the parent. Accordingly, a credit to acquisition reserve of $3,142 thousand is reflected in the statement of changes in equity.

Note 10. Subsequent events

On 31 August 2011 the Company announced a final 2010/11 dividend of 3 cents per share. The dividend will be fully franked and is payable on 30 September 2011. The record date for determining dividend entitlements is 15 September 2011.

Page 16