IGO LIMITED — Interim / Quarterly Report 2012

Oct 31, 2011

INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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QUARTERLY REPORT FOR THE 3 MONTHS ENDED 30 SEPTEMBER 2011

GROUP HIGHLIGHTS

• Long ore reserves increased by 4,800 Ni t to 58,100 Ni t and increased mine life to 6.5 years (27% increase after taking into account 2010/11 production).

• Long contained nickel metal production exceeded budget for the quarter.

• Tropicana development advancing well. All major treatment plant equipment has now been ordered.

• Continued exploration success including:

• 19m @ 4.8 g/t Au and 14m @ 4.0 g/t Au intersected at Tropicana, approximately 860m below the surface.

• New downhole TEM anomaly at Lagonda prospect north of Jaguar/Bentley.

• Reverse circulation drilling at Karlawinda intersected 24m @ 2.5 g/t Au (including 17m @ 3.3 g/t Au) approximately 150m beneath the surface.

OPERATIONS HIGHLIGHTS FOR QUARTER

LONG OPERATIONS (NI) (IGO 100%)

• Production: 56,897t @ 3.51% Ni for 1,999t Ni at A$5.29/lb Ni payable cash costs.

• (Budget 55,816t @ 3.46% Ni for 1,930t Ni t @ A$5.22/lb Ni payable cash costs).

• Construction: Moran paste plant construction completed.

• Exploration: 5m @ 3.0% Ni (true width) intersected north of Moran.

• Reserve Reserves have been increased to 58,100 Ni Tonnes (from 53,300 Ni tonnes in 2010), resulting in the Upgrade: longest mine life at Long to date of 6.5 years based on reserves. This increase reflects an increase in reserves taking into account the 9,753 Ni Tonnes mined during the 2010/11 financial year.

JAGUAR OPERATIONS (CU, ZN, AG) (IGO 100%)

• Production 92,526t @ 1.97% Cu, 5.24% Zn, 78.0 g/t Ag at A$0.49/lb Zn payable cash costs. (milled): (Budget: 83,866t @ 2.72% Cu, 7.60% Zn, 102 g/t Ag at A$0.09/lb Zn payable cash costs).

• Metal in 1,570t Cu (Budget 1,946t Cu), 3,714t Zn (Budget 4,747t Zn) Concentrates: Compared to Budget, Cu and Zn in concentrate increased from 54% to 81% and 43% to 78% respectively Quarter on Quarter, reflecting the positive effects of the revised mining plan.

• Development: Bentley development on track with primary ventilation commissioned.

• Construction: The Heavy Media Separation (HMS) plant construction nearing completion with commissioning planned for December 2011 and ramp-up to full utilisation in January 2012.

• Shipping: Port of Geraldton concentrate shipping recommenced.

• Exploration: Downhole TEM conductor identified on a favourable geological contact at the Lagonda prospect between base metal mineralised holes.

DEVELOPMENT PROJECTS

TROPICANA JV (AU) (IGO 30%, ANGLOGOLD ASHANTI 70% (MANAGER))

• Development of the Tropicana Gold Project progressed well during the quarter.

• Construction of the 214km access road is 48% complete.

• Pump testing of bore field yielded 100% of treatment plant operating water requirements.

• Commencement of plant construction remains on schedule for June quarter 2012.

• 19m @ 4.8 g/t Au and 14m @ 4.0 g/t Au (both true width) intersected approximately 1.4km down plunge of the proposed Havana open pit, 860m below surface, supports underground potential.

• 51m @ 3.3 g/t Au, 27m @ 3.3 g/t Au, 22m @ 4.2 g/t Au (all true width) intersected outside the proposed Havana BFS open pit suggest potential for an additional cut back.

• Further intercepts (16m @ 3.8 g/t Au) at Swizzler Prospect between the Tropicana and Havana open pits continues to indicate potential to merge the pits.

FEASIBILITY PROJECTS

STOCKMAN (CU) (IGO 100%)

• Definitive Feasibility Study and Environmental Effect Statement continues.

• 13.5m @ 3.9% Cu and 9.0m @ 2.9% Cu intersected at the Currawong deposit extending the “A” lens 60m to the west.

• 23.5m @ 2.7% Cu intersected in the Wilga deposit stringer zone.

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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EXPLORATION HIGHLIGHTS

KARLAWINDA (AU) (IGO 100%)

• RC drilling at Bibra intersected 24m @ 2.5 g/t Au (including 17m @ 3.3 g/t Au) approximately 150m beneath the surface.

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Figure 1: IGO Major Project Locations

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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CORPORATE

PROFIT AND LOSS

ISSUED CAPITAL - CURRENT CASH BALANCES

The estimated and unaudited NPAT for the quarter was a loss of $8.5 million (June quarter loss of $16.2 million).

202,907,135 ordinary shares. There are no options on issue.

At the end of the quarter, the Company had $157.8 million cash including 30% share of Tropicana Joint Venture (June $228.0 million).

Delayed shipping resulted in stocks of copper and zinc awaiting shipment at the Company‟s Geraldton shed facilities at the end of quarter comprising 3,500 tonnes of zinc concentrate and 11,000 tonnes of copper concentrate with a combined value net of treatment and refining charges of in excess of US$22M. It is expected that this concentrate will be shipped in the December quarter.

CASH FLOWS

Material cash flows during the quarter comprised:-

• $14.5 million net outflow of cash operating activities, primarily the result of shipping delays.

• $6.5 million on Long, Jaguar, Stockman and regional exploration.

• $14.3 million contributions to the Tropicana JV.

• $12.9 million on plant and equipment including Long $1.6M, Jaguar/Bentley $10.2M, Stockman $0.8M.

• $3.1 million Stockman Feasibility Study.

• $11.1 million capitalised development costs (Long $3.7M and Jaguar/Bentley $7.4M).

• $2.5 million income tax payments.

• $6.1 million fully franked dividend payment.

DEBT

SALES PRICE CALCULATION

HEDGING

The Company had debt at the end of the quarter of $27 million, comprising finance lease obligations of $13.8 million and a silver loan of $13.2 million.

Sales for any given month are required to be estimated. One reason for this is as a consequence of the nickel off-take agreement which the Company has for its Long Nickel Operation with BHP Billiton Nickel West Pty Ltd. The agreement requires final settlement to be based on a future nickel price. In addition, in relation to copper and zinc sales, customers of the Company will often negotiate a sale based on a future price for that particular metal. The Company is also required to estimate the USD/AUD exchange rate when calculating sales for any given month, since payment for metal sold is received in US dollars. When calculating the quarter‟s profits, revenue and receivables are determined with reference to future metal prices which are estimated using price information available at quarter end. The net receivables figure above incorporates the estimated final USD metal payment converted to AUD, at the applicable exchange rate at quarter end.

Total hedged nickel metal at the date of this report is 4,020t at an average price of A$24,846/t, which is scheduled to be delivered at 180 tonnes per month from October 2011 to June 2012 and 200 tonnes per month from July 2012 to June 2013.

Total hedged zinc metal at the date of this report is 3,875t at US$1,967/t, which is scheduled to be delivered in December 2011 to June 2012. The Company also has US$3 million in foreign exchange forward contracts at an average rate of 0.846, US$12 million in call options at an average strike of 0.912, US$6 million collar options (cap: 0.853 and floor: 0.70), and US$15 million collar options (cap: 0.98 and floor: 0.83) – all expiring during December 2011 and June 2012.

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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INVESTMENTS UPDATE

The Company‟s portfolio of investments in companies outside of its Group as at the end	The Company‟s portfolio of investments in companies outside of its Group as at the end
of the quarter were as follows:
Musgrave Minerals Limited:	9.0 million fully paid shares
Argentina Mining Limited:	11.9 million fully paid shares
Brumby Resources Limited:	6.9 million fully paid shares
Phillips River Mining NL*:	3.8 million fully paid shares
	[formerly Tectonic Resources NL] previously 30.3
	million fully paid shares before August 2011 share
	consolidation.
Laconia Resources Limited*:	10.0 million fully paid shares
Enerji Limited*:	1.5 million fully paid shares

Investments marked * were acquired through the acquisition of Jabiru Metals Limited.

MINING OPERATIONS

LONG NICKEL OPERATION (IGO 100%)

SAFETY

Lightning Nickel incurred no Lost Time Injuries (LTI) during the quarter, bringing the Frequency Rate (LTIFR) to 6.13 for the life of the operation.

The operation commenced implementation of the Strategic Safety Management Plan for 2011-12 and updated operational procedures from baseline risk assessments.

PRODUCTION

Production for the quarter was 56,897t at 3.5% Ni for 1,999 tonnes of contained nickel, which was mined by the following methods:

Jumbo Stoping	5,088 t	@	5.03	Ni for	256	Ni T
Long-hole	19,064t	@	3.18	Ni for	606	Ni T
Hand-held	7,751t	@	4.45	Ni for	345	Ni T
Jumbo Development	24,994t	@	3.17	Ni for	792	Ni T
TOTAL	56,897t	@	3.51	Ni for	1,999	Ni T

Production was from the following areas:

Long	5,794t	@	4.29	Ni for	248	Ni T
McLeay	24,152t	@	2.98	Ni for	719	Ni T
Victor South	6,363t	@	4.43	Ni for	282	Ni T
Moran	20,588t	@	3.64	Ni for	750	Ni T
TOTAL	56,897t	@	3.51	Ni for	1,999	Ni T

(See Figure 2 for location of ore bodies)

Contained nickel metal exceeded budget (1,930 Ni t) by almost 70 Ni T or 4%. The additional metal was produced via a combination of additional production (+1,083 ore tonnes) and a slight improvement in forecasted grade.

Metal during the quarter was produced at a cash cost of A$5.29 per payable pound of nickel versus a budgeted $5.22/lb.

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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Operational highlights for the quarter included:

• Establishment of infrastructure to support Moran production.

• Decommissioning of the Long shaft and winder.

• Long and Victor South mining areas out-performing on budget grade (+1.27% Ni and +1.51% Ni respectively).

• Moran paste plant completion.

• Establishment of primary ventilation through Moran supporting increased production.

• Commencement of longhole stoping in Moran.

DEVELOPMENT

CAPITAL DEVELOPMENT

During the quarter a total of 346.2 metres were advanced as capital development, 248.4 metres in Moran and 97.8 metres between the Long 13/7 and 16/5 exploration drill drives.

OPERATING DEVELOPMENT

A total of 633 metres of operating development was also undertaken during the quarter, of which 278.6m occurred in McLeay, 90.8m in Victor South with the remaining 263.6m in Moran. Operating development costs are included in cash costs.

RESOURCES AND RESERVES

During the quarter the Company released the June 2011 Mineral Resource and Ore reserve estimates as follows:

Resources: 1,566,000t @ 5.3% Ni for 83,000 Ni tonnes

Reserves: 1,610,000t @ 3.6% Ni for 58,100 Ni tonnes

After taking into account 2010/11 production, reserves increased by 27% (14,553 Ni t) extending mine life to at least 2017 based on reserves only. Success at Moran, McLeay and Long North deposits, which remain open along strike, could further add to mine life.

Refer to the Company’s 2011 Annual Report, released through an ASX Announcement dated 20 October 2011 for further details regarding the resource and reserve estimate.

FOCUS FOR DECEMBER QUARTER The December quarter will see the operation focus on:

• Operator skills training and development.

• Implementation of the Strategic Safety Management Plan for 2011/12.

• Moran paste plant optimisation.

• Increasing Moran production from stoping.

• Establishment of access into the Moran northern ore-body extension.

• Extension of the Long North exploration platforms.

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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Figure 2: Long Nickel Mine – Longitudinal Projection Showing Target Areas, TEM Conductors and Significant Intercepts Outside June 2011 Ore Reserves

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EXPLORATION
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DRILL DRIVE DEVELOPMENT

Development of drilling platforms designed to allow Long North and Long Deeps targets continued during the quarter in the 13/7 and 16/5 mining Levels.

MORAN SOUTH TARGET

As at the end of the quarter, the Moran South exploration underground diamond drill hole LSU-323W2 was at 413m depth, in lava channel ultramafic containing minor disseminated nickel sulphides (7m @ 0.4%Ni). Drilling is continuing with the aim to intersect the basalt – ultramafic footwall contact.

MORAN NORTH TARGET

A further northerly extension to the Moran system was located 100m east of the Moran decline 150m up dip to the north of Moran ore body. Drilling was designed to follow up TEM anomalies and historical nickel intercepts. Nickel mineralisation was intersected in three drill holes. The most significant intercept was reported in hole LSU-376 with 7.6m @ 3.0% Ni from 152m (Figure 2 ) and is open to the north.

Table 1: Long Nickel Mine – Moran North Significant September Exploration Holes

								m
							m From		**Interval **	True **Width **	Assay Grade %Ni
Hole ID	Northing	Easting	RL	**EOH **	Dip	**Azimuth **		To
LSU-376	547916	375173	-533	217	-20	78	152.0	159.6	7.6	5.0	3.0
							181.1	182.3	1.2	0.5	3.4
LSU-377	547919	375172	-533	195	-4	34	192.0	199.5	7.5	5.0	1.9

HIGH POWERED TEM TRANSMITTER MARK III

Site testing of the new IGO High Powered Geophysics Transmitter (HPT – Mark III) continued during the quarter with continued refinements of the electronic design.

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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LONG NICKEL MINE PRODUCTION SUMMARY

				Sep „11		2010/11	2010/11	Prev. Corresp.
			Note	Quarter	FY to Date			Quarter
Mining Reserve (Dry Tonnes)								(Sep ’10)
Start of Period				1,610,000		1,610,000		1,315,000
-	ROM Production		1	(56,897)		(56,897)		(60,235)
End of Period				1,553,103		1,553,103		1,254,765
Production Details:
Ore Mined (Dry Tonnes)			1	56,897		56,897		60,235
Ore Milled (Dry Tonnes)				56,897		56,897		60,235
Nickel Grade (Head %)				3.51		3.51		4.49
Copper Grade (Head %)				0.24		0.24		0.30
Metal in Ore Production (Tonnes)
Nickel delivered			2	1,999		1,999		2,702
Copper delivered			2	138		138		184
Metal Payable IGO share (Tonnes)
Nickel				1,208		1,208		1,634
Copper				56		56		75
Hedging
Tonnes delivered into Hedge				540		540		600
Average Price (AU$/t)				21,898		21,898		19,013
		Note 1. Production is sourced from both inside and outside reserve and updated as at 1 July 2011.
		Note 2. The Recovery Rate is fixed with BHP depending on head grade.
Revenue/Expense Summary				A$'000's		A$'000's		A$'000's
Sales Revenue (incl. hedging)				20,278		20,278		36,025
Cash Mining/Development Costs				(8,676)		(8,676)		(9,577)
Other Cash Costs			3	(5,452)		(5,452)		(6,102)
Depreciation/Amortisation/Rehabilitation				(4,015)		(4,015)		(4,801)
				A$/lb Total Metal	A$/lb Total Metal			A$/lb Total Metal
Unit Cost Summary				Produced		Produced		Produced
Cash Mining/Development Costs				1.96		1.96		1.61
Other Cash Costs			3	1.23		1.23		1.02
Depreciation/Amortisation/Rehabilitation				0.91		0.91		0.81
				A$/lb Payable	A$/lb Payable			A$/lb Payable
Unit Cost Summary				Metal		Metal		Metal
Sales Revenue (incl. hedging)			4	7.60		7.60		10.01
Cash Mining/Development Costs				3.25		3.25		2.66
Other Cash Costs			3	2.04		2.04		1.70
Depreciation/Amortisation/Rehabilitation				1.50		1.50		1.34
		Note 3. Other Cash Costs include milling, royalties and site administration.
		Note 4. Sales Revenue per pound includes nickel price adjustments for prior periods.
Safety and Productivity
-	Lost Time Injuries			-		0		1
-	Medically Treated IFR			32.5		32.5		29.3
-	Nickel Productivity Rate		5	63.1		63.1		40.1
		Note 5. Nickel Productivity Rate = Annualised nickel tonnes per full-time-equivalent-employee.
Production/Exploration Drilling				Metres		Metres
Production				1,302		1,302		-
Exploration				2,600		2,600		5,278
				3,902		3,902		5,278

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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JAGUAR & BENTLEY COPPER / ZINC OPERATION (IGO 100% )\

SUMMARY

In the June 2011 quarter, leading up to IGO gaining 100% control of the Jaguar assets, geotechnical issues arose in the Jaguar underground mine. As a result IGO initiated an in-depth review which resulted in the development of a new stress model. This model explained the observed failure mechanism and a revised mining plan was developed to ensure the safety of our employees and that no ore reserves were sterilised. The revised mining plan required the postponing of high grade stoping and the development of additional footwall waste drives to facilitate a change in mining method. The mining sequence that was used to predict budgeted performances was also altered to reflect this new geotechnical information. While this action has resulted in additional operating costs which have been borne through this and the previous quarter, it was essential to ensure no reserves were lost. The geotechnical issue is now well understood and the recovery plan has been to date successful in allowing the return of stoping, with production beginning to return to normal budget levels.

• Development work at Jaguar is now largely completed with only 100 metres of mullock development remaining. This will set the mine up for continued mining of the higher grade areas.

• Development of Bentley has contributed 31,343t during the quarter with production levels being as expected against budget. Bentley is higher in zinc content than Jaguar.

• The Heavy Media Separation ( HMS ) plant is on track for commissioning in the December quarter, with ramp up to full utilisation in January 2012 (see section below).

Operational highlights for the quarter included:

• All safety indices are trending positively;

• The new Tails Dam lift was completed;

• The site‟s cash spend was below budget;

• Bentley‟s primary fan was commissioned;

• Bentley was successfully transferred to “owner operator” status with the delivery of the Company‟s new twin boom jumbo and underground loader and demobilisation of the Bentley contractor; and

• Construction of the Power Station upgrade and Bentley transmission line commenced.

SAFETY

During the quarter, a Lost Time Injury (LTI) occurred at the Jaguar Operation which was a finger injury requiring surgery. The site‟s Frequency Rate (LTIFR) levelled to 1.70 for the life of the operation.

MINE PRODUCTION

Ore tonnage during the September quarter was in line with annualised forecast, however the run of mine (rom) grades were slightly lower due to additional low grade development ore and the requirement to reschedule high grade stoping blocks. As a consequence, the lower rom grades have adversely impacted the operations metal production. Production for the quarter was 100,752t at 2.00% Cu, 5.18% Zn and 78.6g/t Ag, which was mined by the following methods:

Tonnes Mined
Stoping – Jaguar	33,839t	@	3.34% Cu, 4.93% Zn, 69 g/t Ag
Development Jaguar	35,570t	@	1.81% Cu, 2.27% Zn, 36 g/t Ag
Development Bentley	31,343t	@	0.74% Cu, 8.44% Zn, 130 g/t Ag
TOTAL	100,752t	@	2.00% Cu, 5.18% Zn, 78.6 g/t Ag

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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MILL PRODUCTION

The budget throughput for the mill was 83,866t. Production for the quarter was 92,526t at 1.96% Cu, 5.24% Zn and 78g/t Ag, which was sourced primarily from the mine and stockpiles. Mill throughput was 3.0% above budgeted expectations.

Tonnes Processed (dmt)	Actual Budget
	92,526 t 83,866t
Cu(%)	1.96 % 2.72 %
Zn(%)	5.24 % 7.6 %
Ag(g/t)	78.6g/t 102.0 g/t
Recovery (%)
Copper	86.2 % 85%
Zinc	77.0 % 74%
Silver	53.3 % 48%
Concentrate Produced
Copper (dmt)	6,971t 8,461t
Cu (%)	22.5% 23%
Cu (t)	1,570t 1,946t
Zinc (dmt)	8,175t 9,889t
Zn (%)	45.4% 48%
Zn (t)	3,714t 4,747t

Payable zinc metal during the quarter was produced at an average C1 cash cost of A$0.49/lb, after considering by-product credits.

HMS PLANT

The HMS plant construction continues on schedule with commissioning in the December quarter, and ramp-up to full utilisation in January 2012. The HMS plant seeks to improve mill feed grade and efficiencies by separating the softer sulphides and rejecting harder waste material. The „upgraded‟ sulphides are then fed into the grinding circuit, allowing the optimum grind size to be achieved quicker and cheaper.

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Photo: HMS Plant under construction 24 October 2011.

The overall production from the HMS plant is estimated to be around 360,000 tonnes per annum, based on a 45 tonne per hour throughput capacity.

The cost of the plant is estimated at $9.5 million, with one repayment remaining in relation to the construction. Although the feasibility was based only on the treatment of the Bentley lower grade material, there are obvious benefits to treating lower grade resources in both the Jaguar and Teutonic Bore mines. A thorough review is underway to re-evaluate these resources.

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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CONCENTRATE SHIPMENTS

Concentrate shipments have resumed as normal out of Geraldton. One shipment (5,500wmt) of zinc concentrate was shipped during the quarter. Delayed shipping resulted in stocks of copper and zinc awaiting shipment at the Company‟s Geraldton shed facilities at the end of quarter comprising 3,500 tonnes of zinc concentrate and 11,000 tonnes of copper concentrate.

MINE DEVELOPMENT

CAPITAL DEVELOPMENT

During the quarter a total of 926 metres were advanced as capital development, 267m at Bentley and 659m at Jaguar.

OPERATING DEVELOPMENT

During the quarter a total of 782 metres were advanced as ore drive development, 381m at Bentley and 401m at Jaguar.

RESOURCE AND RESERVE During the quarter, the Company released the June 2011 Mineral Resource and Ore Reserve estimates as follows:

Resources: 5,453,000t @ 2.0% Cu, 6.9% Zn, 102 g/t Ag, 0.4 g/t Au Reserves: 3,276,000t @ 1.7% Cu, 7.4% Zn, 93 g/t Ag, 0.4 g/t Au

Refer to the Company’s 2011 Annual Report released through an ASX Announcement dated 20 October 2011 for further details regarding the resource and reserve estimates. Please note that Table 4 on page 25 of that Annual Report contained a typographical error in the breakup of the above-mentioned 5,453,000t Resource. The reference to the copper grade in the Bentley component of that Mineral Resource should have been to 2.0% Cu, not 2.7% Cu as stated. The grand total of the Jaguar / Bentley / Teutonic Bore Mineral Resource in that Table referred to the correct copper grade.

FOCUS FOR DECEMBER QUARTER

The December quarter will see the operation focus on:

• Maintaining a continuous feed from the Jaguar high grade stopes

• Continue access development to the Far Side ore body high grade copper zones

• Commissioning of the site HMS plant

• Continue developing the ore-drives at Bentley for stope setup so that stoping can be brought online in the June 2012 quarter.

• Shipload the stockpiled concentrate in Geraldton as budgeted.

EXPLORATION

The Jaguar Regional Exploration Project covers 50kms of strike prospective for the discovery of VMS (volcanogenic massive sulphide) deposits ( Figure 3 ). It encompasses three high grade copper-zinc-lead-silver-gold deposits: Teutonic Bore (inactive), Jaguar and Bentley, centred on the Jaguar Operations, located 300km north of Kalgoorlie in Western Australia.

Regional exploration is focused on identifying and testing targets within the prospective corridor through the use of detailed geological mapping, regolith geochemistry, ground-based geophysics followed by RC and/or diamond core (DDH) drilling.

During the quarter systematic AirCore (AC) drilling (167 holes for 11,133m) continued in key target areas from north of Bentley through to north of Lagonda (Figure 3). Results returned to date have defined high order, cohesive, multi-element basemetal anomalies in the Lagonda and Gravel Pit areas. Other discrete anomalies were outlined at Warramboo (east of Jaguar) and Teutonic Bore South.

Diamond drill testing was completed in three targets areas; Lagonda, Jaguar South and Jaguar up-plunge.

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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Figure 3: Jaguar / Bentley Operation – Tenure, Regional Geology, Mines and Significant Prospect Locations

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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At Lagonda three DDH holes (11TRDD003 – 11TRD005) spaced approximately 200m (N-S) apart were completed to test a zone of intense alteration and strong mineralisation defined from historic drilling and strong geochemical anomalism in recently completed aircore drilling. All 3 holes intersected zones of disseminated and/or stringer style pyrite ± chalcopyrite ± sphalerite ± galena mineralisation proximal to the targeted horizon. These results are highly encouraging as they are very similar in nature to intercepts from drilling marginal to the Bentley and Jaguar orebodies.

Downhole TEM was completed on all three holes and delineated a conductive plate in the plane of mineralisation between holes 11TRD003 and 11TRD005 (Figure 4). This plate is to be drilled tested early in Q3.

At Jaguar South, 900m south of Jaguar, a diamond drilling program commenced testing a zone of strong alteration and zinc mineralisation (max 12.8m @ 5.2% Zn) identified in previous drilling programs. At quarter‟s end 1 drill hole extension (TBD0246) and one new hole (11TRDD006) had been completed. Both holes intersected encouraging VMS sulphide alteration and further drilling is planned in the December quarter.

The drill hole testing the up-plunge position at Jaguar (11TRD002) intersected an andesitic/basaltic sequence with a black shale horizon but no significant mineralisation.

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Figure 4: Jaguar / Bentley Operation – Lagonda Prospect Longitudinal Projection showing significant intercepts, planned drilling, down hole TEM anomaly and sericite hydrothermal alteration zone.

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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JAGUAR / BENTLEY OPERATION PRODUCTION SUMMARY

		Sept „11	2011/12
	Note	Quarter	FY to Date
Mining Reserve (Dry Tonnes)
Start of Period	1	3,276,000	3,276,000
- ROM Production	2	(100,752)	(100,752)
End of Period		3,175,248	3,175,248
Production Details:
Ore Mined (Dry Tonnes)		100,752	100,752
Ore Milled (Dry Tonnes)		92,526	92,526
Copper Grade (Head %)		1.96	1.96
Zinc Grade (Head %)		5.24	5.24
Silver Grade (g/t)		78	78
Metal in Concentrate Production (Tonnes)
Copper		1,570	1,570
Zinc		3,714	3,714
Metal Payable IGO share (Tonnes)
Copper		1,498	1,498
Zinc		3,060	3,060
Revenue/Expense Summary		A$'000's	A$'000's
Sales Revenue (incl. hedging TC‟s/ RC‟s)		2,788	2,788
Cash Mining & Processing Costs		(12,777)	(12,777)
Site Admin & Trucking Costs		(4,255)	(4,255)
Shipping		(549)	(549)
Royalties		(141)	(141)
		A$/lb Total Zn Metal	A$/lb Total Zn Metal
Notional Unit Cost Summary		Produced	Produced
Mining & Processing Costs		1.56	1.56
Other Cash Costs	3	0.91	0.91
Copper and Silver Credits		(2.07)	(2.07)
C1 Costs	4	0.40	0.40
Royalties		0.02	0.02
		A$/lb Total Zn Metal	A$/lb Total Zn Metal
Notional Unit Cost Summary		Payable	Payable
Mining & Processing Costs		1.89	1.89
Other Cash Costs	3	1.11	1.11
Copper and Silver Credits		(2.52)	(2.52)
C1 Costs	4	0.49	0.49
Royalties		0.02	0.02

Note 1: Reserve updated as of 1 July 2011. Note 2: Production sourced from inside and outside of reserves. Note 3: Other Cash Costs include, site administration, trucking & notional TC‟s/ RC‟s and notional shipping Note 4 C1 Costs include credits for copper and silver notionally priced at A$4.08/lb and A$37.15/Oz respectively.

Safety and Productivity

• Lost Time Injuries

• Medically Treated IFR

1 1 17.02 17.02

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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DEVELOPMENT AND FEASIBILITY PROJECTS

TROPICANA JV (IGO 30%, ANGLOGOLD ASHANTI AUSTRALIA LIMITED, MANAGER 70%)

PROJECT DEVELOPMENT

Construction of the 214km Tropicana Site Access Road continued, with 48% of site preparation, earth and road works now complete.

Pump testing to date of the Minigwal Trough production borefield, 45km north-west of Tropicana, yielded 100% of Treatment Plant water requirements and 70% of start up requirements.

Construction of accommodation village and airstrip are expected to commence in the December quarter.

Recent Tropicana development activities include:

• All major treatment Plant equipment on order.

• Engineering and design completion 45%.

• Construction of village accommodation units commenced.

 Commencement of project microwave communications link to Kalgoorlie supporting mine development and operations, with commissioning scheduled for 2012 March quarter.

Commencement of plant construction activities remains on schedule for June quarter 2012.

TECHNICAL STUDIES

Preliminary assessment of the Swizzler discovery, located between the Tropicana and Havana deposits, suggests potential to merge the two open pits. This presents an opportunity to reduce operating costs and truck haulage distances. This merging could result in a single pit with a 3.75km strike length.

Boston Shaker Feasibility completion has been re-scheduled to December quarter in order to facilitate inclusion of the cost reduction opportunity afforded by the Tropicana/Havana Pit re-design.

Havana Deeps Pre-feasibility delineation success continued with recent intercepts of 51m @ 3.3 g/t Au in HDD065A, 19m @ 4.8 g/t Au in HDD201 and 14m @ 4.0 g/t Au in HDD202A supporting likely amenability to underground extraction.

TROPICANA-HAVANA PROXIMAL EXPLORATION

During the quarter the following drilling was completed in an around the Tropicana Havana Resource area:

	Holes Drilled
Target Area		RC (m)	DDH(m)
Havana Deeps	25	969	13340
Swizzler Deeps	26	2607	5080

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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HAVANA DEEPS

A pre-feasibility study is being undertaken to evaluate open pit and underground mining potential of the Havana Deeps mineralisation.

The results of a “super-deep” step out hole (TFD204) announced in November 2010 confirmed that the Tropicana-Havana mineralised system continues at least 2.1km down plunge beneath the proposed pit floor (1000m vertically) returning 2m @ 1.8g/t Au.

Drilling completed during the quarter was designed to infill potential open cut extension beneath the current proposed Havana open pit and step out incrementally down-plunge and to the north beyond the zone of Havana Deeps Inferred Resource. Although many assay results from this program had yet to be received by quarter‟s end, results received are highly encouraging.

HAVANA OPEN PIT Drilling immediately down dip of the proposed BFS Havana open pit design EXTENSION DRILLING intersected a number of encouraging intercepts including 51m @ 3.3 g/t Au in HDD065A, 27m @ 3.3 g/t Au in HDD064 and 22m @ 4.2 g/t Au in HDD075 (Figure 6). This drilling has been undertaken to determine whether a further open pit cut back is viable with the aim to increase open pit reserves. HAVANA DEEPS EXTENSIONS Thick high grade intercepts were intersected at depth beyond the current resource, including:

• 22m @ 4.2g/t Au from 946m including 19m @ 4.8 g/t Au in HDD201

•  29m @ 2.5 g/t Au from 990m including 14m @ 4.0 g/t Au from 1004m in HDD202A The locations of significant intercepts returned during the quarter are included in Figure 6.

The intercept in HDD202A extends the mineralisation at Havana to 1.4 km down plunge of the proposed Havana open pit, approximately 860m beneath the surface (Figure 7). This intercept remains open down plunge.

A list of significant intercepts received during the quarter from Havana Deeps is included in Table 2 .

SWIZZLER/SWIZZLER Mineralisation intersected at Swizzler last quarter, situated between the Tropicana and DEEPS PROSPECT Havana Pits, indicates the potential for the two pits to eventually merge. Further shallow drilling between the two pits intersected 16.0m @ 3.8 g/t Au in TFRC3560 and 13m @ 2.3 g/t Au in TFRC 3563D (Table 3) .

A program comprising 26 RC/diamond holes was completed in the Swizzler Deeps target area immediately down-dip of Swizzler between the Tropicana and Havana Pits. The program was designed to determine down dip continuity of Swizzler mineralisation. Assay results are pending.

Results and wireframes at Swizzler are being incorporated into an updated resource estimate that will enable new pit optimisations to be completed.

REGIONAL EXPLORATION An RC/diamond drilling program (36 RC holes, 3 DDH holes) was completed at the Iceberg Prospect (32km SW of Tropicana), where AC drilling last quarter returned a number of encouraging intercepts including 20m @ 1.0g/t Au (including 8m @ 2.2 g/t Au ). Drilling intersected strongly sheared and sericite-altered gneissic and granitic lithologies containing sulphide aggregations and stringers (pyrite, chalcopyrite and pyrrhotite) associated with deformed quartz-rich units. Results from the first 7 holes returned some moderately wide anomalous zones but no significant intercepts.

A second phase of RC and DDH drilling was completed at the Voodoo Child Prospect. Results from the program included 7m @ 4.1g/t Au and 3m @ 2.9g/t Au. Several zones of altered gabbroic rocks with minor disseminated sulphides were intersected and it is interpreted that mineralisation is confined to a narrow N-S trending zone within the mafic suite rather than a granite-mafic contact as previously thought.

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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This interpretation limits the potential size of the system at Voodoo Child, however the broader geological domain hosting Voodoo Child remains prospective and is currently being tested by air core drilling.

Table 2: Significant September Quarter Tropicana - Havana Deeps Drilling Results

COLLAR							INTERCEPTDETAILS	INTERCEPTDETAILS
**HOLENO. **	NORTHING (M)	EASTING (M)		RL (MAHD)	AZI (DEGR)	DIP (DEGR)	TOTAL DEPTH	DEPTH FROM	DEPTH TO	WIDTH (M)
												AU (G/T)
					TROPICANA- HAVANARC INFILL
HDD060	6762119	650111		359.9	322.9	-59.9	360.5	301.0	334.0	33.0		1.6
							including	326.0	334.0	8.0		3.7
HDD062	6762171	649988		358.8	320.4	-60.3	332	245.0	264.0	19.0		2.4
HDD063A	6762140	650021		359.8	323.7	-58.1	342.5	272.0	297.0	25.0		2.2
HDD064	6762101	650058		360.3	324.2	-60.4	360.6	299.0	326.0	27.0		3.3
HDD065A	6762083	650076		360.2	321.1	-66.4	384.5	291.0	342.0	51.0		3.3
							including	321.0	342.0	21.0		5.9
HDD067	6762190	649934		357.8	318.8	-60.9	255.5	211.0	235.0	24.0		2.8
HDD069	6762082	650007		361.4	320.6	-75.9	333.9	281.0	305.0	24.0*		2.8
							including	287.0	304.0	17.0*		3.6
HDD071	6761959	650059		360.7	321.9	-58.0	390.5	310.0	317.0	7.0		6.2
								320.0	335.0	15.0		5.2
HDD072	6761890	650129		360.3	324.0	-62.5	423.5	353.0	377.0	24.0		2.2
HDD073	6761800	650218		360.2	322.6	-57.8	462.5	403.0	413.0	10.0		5.9
HDD075	6761819	650129		360.9	323.6	-58.8	438.5	365.0	387.0	22.0		4.2
HDD079	6761694	650112		362.3	319.5	-59.3	441.4	383.0	407.0	24.0		2.1
							including	383.0	387.0	4.0		7.0
HDD080	6761660	650147		362.4	321.6	-59.4	462.5	415.0	434.0	19.0		2.1
HDD081	6761624	650183		362.2	320.3	-59.1	491.7	449.0	461.0	12.0		2.7
HDD201	6760846	650925		359.0	317.1	-60.4	1043.1	946.0	968.0	22.0		4.2
							including	949.0	968.0	19.0		4.8
HDD202A	6760718	650907		360.6	321.6	-61.6	1121.8	990.0	1019.0	29.0		2.5
							including	1004.0	1018.0	14.0		4.0

RC = Reserve Circulation drill hole DD = Diamond drill hole

(Downhole widths approximate true width except where indicated as * not true width )

Table 3: Significant September Quarter - Swizzler Drilling Results

COLLAR						INTERCEPTDETAILS	INTERCEPTDETAILS
	NORTHING (M)	EASTING (M)	RL (MAHD)	AZI (DEGR)	DIP (DEGR)	TOTAL DEPTH	DEPTH FROM	DEPTH TO	WIDTH (M)	AU (G/T)
**HOLENO. **
				**SWIZZLERRC **
TFRC3560	6762908	649952	347.3	324.5	-60.6	168	127.0	143.0	16.0	3.8
TFRC3563D	6762930	649968	347.6	322.0	-60.7	180.4	130.0	143.0	13.0	2.3
						including	137.0	143.0	6.0	4.0

RC = Reverse Circulation drill holes DDH = Diamond drill holes (Down-hole widths approximate true widths)

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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PROPOSED DECEMBER QUARTER

• RC and DDH drilling will continue testing the Havana Deeps and Swizzler Regional Exploration Program Deeps target.

• RC and DDH drilling will continue at Iceberg and other southern prospects.

• Regional aircore drilling will continue at Tropicana West and in Tropicana Group 1 and 2 tenements before demobilising in November.

• Auger sampling will re-commence over Tropicana Group 2 and 3 tenure as soon as permitting approval is received.

• An airborne TEM survey is scheduled to be flown over the northern part of the Tropicana JV to assist with interpretation of cover depth which in turn will be used to prioritise regional areas for further testing.

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Figure 5: Tropicana JV – Tenure, Tropicana and Havana Reserve Locations, Gold Geochemical Anomalies, Significant Drill Intercepts and Selected Prospect Locations

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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Figure 6: Tropicana JV – Proposed Boston Shaker, Tropicana, Havana and Havana South Open Pit Outlines, g/t Au x Thickness (m) Contours in 3D Isometric Model and significant September 2011 quarter intercepts.

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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Figure 7: Tropicana JV – Havana Deeps TPD040 – HDD202A cross section showing continuation of gold mineralised zone down plunge from the base of the proposed Havana open pit.

STOCKMAN BASE METALS PROJECT (IGO 100%)

STOCKMAN PROJECT OVERVIEW The Stockman Project is located in eastern Victoria, 300km north-east of Melbourne (Figure 1). The project encompasses two copper-zinc-lead-silver-gold VMS (volcanogenic massive sulphide) deposits, Wilga and Currawong, which were discovered by Western Mining in 1978/9. Copper-rich ore was mined at Wilga from 1992 to 1996.

Both massive sulphide deposits are approximately 350m in strike and dip extent, dip shallowly to the north and are located only 100m below the surface. The Currawong deposit comprises five massive sulphide lenses and associated stringer style mineralisation stacked by a series of post-mineralisation faults. Located 3.5km to the south, Wilga comprises a single massive sulphide lens with an extensive halo of stringer-style mineralisation that contributes significantly to the resource.

The massive sulphide lenses contain copper-rich domains that in part reflect primary hydrothermal fluid pathways controlled by primary structural trends. The structural complexity of the area is being interpreted and the potential for additional host stratigraphy under barren cover is being investigated both regionally and in the vicinity of the two deposits.

The project is currently in the final stages of a feasibility study examining the optimal development route for the Currawong and Wilga deposits. In addition to feasibility work, an exploration program is being carried out both in the vicinity of existing deposits and in other target areas throughout the project tenure. In the coming quarter the Company intends to deploy its proprietary geophysical equipment to the project to assist in the exploration effort.

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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STOCKMAN FEASIBILITY STUDY

PROJECT DEVELOPMENT

The Feasibility Study has progressed in parallel to permitting throughout the quarter and is expected to be complete at the end of 2011. The extensive metallurgical test work campaign is drawing to a conclusion with a relatively simple process route defined that is suitable for the different lenses and mineralisation types. Fine primary grinding of the concentrator feed (P80 = 25µm) will be required to maximise metal recoveries, and blended stringer – massive sulphide feeds have shown advantages over batch processing.

Capital and operating costs have been assembled for the main power supply options of a 66kV grid extension or trucked compressed natural gas (cng) to onsite storage. The final solution will depend on the level of participation the Victorian government can be convinced to take within their regional development scope.

PERMITTING

The Environmental Effects Statement (EES) is the Victorian government‟s overarching permitting process and is accredited with the Federal Environmental Protection and Biodiversity (EPBC) Act. The permitting timeline is broadly segregated into the preparation and submission of the EES document, followed by a process of government review and inquiry into the EES document. The final stage in the government process is project approval, inclusive of any operating conditions. Preparation of the EES document has continued throughout the quarter and is well advanced, with submission of the final version to government expected in the first half of 2012 and approvals by late 2012 as previously indicated.

The EES document describes the proposed Stockman project and the likely environmental, social and economic impacts throughout the project life cycle. The Stockman EES document will address 21 separate technical areas (such as flora, fauna, social impact, economic impact, and rehabilitation) to provide a complete assessment of the project. Each technical area is sub-divided into:

• existing conditions

• potential impacts, and

• impact mitigation and management plans

The majority of the technical areas have completed the existing conditions and potential impact sub-sections which have been presented to the government‟s Technical Reference Group (TRG) to ensure the Ministers scoping requirements for the EES are met. As this review cycle can be an iterative, rather than fixed process, the timeline to completion may be subject to some variation. Work is underway on the impact mitigation sections and preparation of the summary document.

RESOURCE ESTIMATE

During the quarter the Company released the June 2011 Mineral Resource as follows:

Resources: 12,690,000t @ 2.1% Cu, 4.4% Zn, 0.7% Pb, 39 g/t Ag, 1.0 g/t Au.

Refer to the Company’s 2011 Annual Report released through an ASX Announcement dated 20 October 2011 for further details regarding the resource estimate.

It is expected that a maiden reserve statement will be published in conjunction with the DFS.

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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STOCKMAN EXPLORATION

Exploration is focused on a number of key positions proximal to both Currawong and Wilga, as well as on geochemical, geophysical and conceptual targets generated from historical datasets and a comprehensive and detailed airborne VTEM survey covering the entire project area ( Figure 8 ). IGO will be deploying a dedicated proprietary High Powered Transmitter to the project in late October. This application of this technology to both down hole (DHTEM) and surface surveys has the potential to significantly enhance exploration by providing improved drill hole targeting and the detection of conductors not recognisable in previous ground and airborne TEM surveys.

During the quarter exploration diamond drilling was undertaken at the Wilga South and Bigfoot Prospects

A total of 4 holes for 801.2m were completed at the Wilga South Prospect where historic diamond drilling identified copper-rich stringer mineralisation only 400m from the Wilga deposit.

Two holes from the current program intersected zones of stringer style mineralisation with up to 1% chalcopyrite (visual estimate). Assays results are awaited.

At Big foot, located immediately north of Currawong, four step-out holes (11SMDD004-006, 11SMDD008) and one scissor hole (11SMDD012) tested a zone of vein-style mineralisation identified in historic drilling containing base metals with significant gold credits.

The four step-out holes did not intersect mineralisation however the scissor hole, which was principally drilled as a DHTEM platform intersected 1.2m of massive sulphide (assay results awaited) extending the known mineralisation a further 15m updip. This intercept is currently open for approximately 250m to the south-west towards Currawong, with only one hole drilled in the mineralised horizon between the intersection and Currawong „M‟ lens.

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Figure 8: Stockman Project – Regional Geology, Tenure, Deposits and Prospects

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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REGIONAL GOLD EXPLORATION

KARLAWINDA (IGO 100%)

The Karlawinda Project is located on the southern margin of the Archaean Sylvania Inlier, 65km south-east of Newman, Western Australia, close to the Great Northern Highway and gas pipeline infrastructure ( Figure 1 ).

The project area covers a previously unrecognised greenstone belt on the southern margin of the Sylvania Inlier. The discovery prospect, Frankopan, comprises a very large gold mineralised system extending over a strike length of 1.1km and 0.5km down dip beneath approximately 190m of Bangemall Basin cover sediments. The current focus of exploration is on the Bibra Prospect, located approximately 5km NE of Frankopan, and other regional targets north of Frankopan, where Archaean bedrock is not obscured by thick Bangemall cover.

BIBRA PROSPECT

At the Bibra prospect, the Company has defined a large gold mineralised zone extending over 1km both along strike and down-dip (Figure 9). Mineralisation strikes NNE and is developed in a series of shallowly WNW plunging rod-like shoots within a more continuous lower grade halo.

The prospect is now undergoing a Scoping Study to determine the potential viability of heap leach and/or conventional CIL development.

Modelling based on 100m x 50m spaced drilling on the supergene, oxide and upper transitional material estimated an Inferred Resource of 5.9Mt @ 1.1 g/t (0.22Moz). Refer to IGO 31 March 2011 ASX Quarterly Report for Resource Estimate.

An RC drilling program comprising 10 holes for 1,474m was completed to test known higher grade shoots within Bibra and other nearby features exhibiting a similar magnetic signature.

Drilling intersected the northern shoot approximately 150m beneath the surface and 450m down dip and remains open down plunge (Figure 10 ). The mineralised intersection of 24m @ 2.5 g/t Au , including 17m @ 3.3 g/t Au , is higher grade than mineralisation intersected 100m up-dip, indicating a preferred structural position for the development of higher grade gold mineralisation.

A close spaced drill line traversing the southern gold shoot identified a higher grade mineralised shoot within a broader lower grade envelope (Figure 11).

A complete listing of significant RC intercepts from the quarter is included in Table 4.

A program of 46 RC holes for 8210m commenced in October, designed to extend the Inferred Resource estimate to a vertical depth of 200m. A second fence of close spaced drill holes is planned to better define the geometry of the southern shoot 100m down plunge of the existing fence. In additional to the resource drilling, a series of DDH holes will be completed to provide material for further metallurgical test work.

A mining lease application (MLA) covering Bibra and providing sufficient space for mining infrastructure, plants and a camp has been lodged.

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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Figure 9: Karlawinda Project – Bibra Prospect Drill Defined Gold Anomalies, Significant September 2011 quarter drill Intercepts, Figures 10 and 11 Cross section location over g/t Au x metre contours.

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Figure 10: Karlawinda Project – Bibra long section of central gold shoot (refer Figure 9 for location)

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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Figure 11: Karlawinda Project – Bibra cross-section of southern gold shoot (Refer Figure 9 for location)

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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Table 4: Significant September Quarter Bibra Prospect RC Drilling Results

COLLAR								INTERCEPTSDETAILS	INTERCEPTSDETAILS
	NORTHING (M)		EASTING (M)		RL (MAHD)	AZI (DEGR)	DIP (DEGR)		DEPTH FROM	DEPTH TO	WIDTH (M)	AU (G/T)
**HOLENO. **								TOTALDEPTH
KBRC153	7368920	204026.4		591.17		52.57	-87.54	184	125	149	24	2.5
								including	127	144	17	3.3
KBRC154	7368714	203836.58		589.94		91.82	-88.9	184	89	105	16	1.3
KBRC155	7368699	203837.02		589.85		95.24	-88.24	142	82	87	5	5.5
									94	111	17	0.9
KBRC156	7368669	203839.81		589.78		125.06	-89.36	142	70	103	33	1.5
								including	70	97	27	1.6
KBRC157	7368654	203839.82		589.77		71.66	-88.4	136	68	94	26	1.1
KBRC158	7368639	203840.73		589.73		121.64	-85.73	190	79	95	16	1.2
KBRC159	7368624	203840.79		589.72		102.04	-88.74	130	71	94	23	0.7
KBRC160	7368880	203236.35		588.85		114	-87.66	136	92	108	16	0.8

REGIONAL BASE METALS EXPLORATION

DUKETON NICKEL JOINT VENTURE (IGO MANAGER EARNING 70% NICKEL RIGHTS)

The Duketon Nickel JV with South Boulder Mines Ltd covers ultramafic-rich stratigraphy in the Duketon Greenstone Belt approximately 80km north of the Windarra nickel deposit ( Figure 1 ). Exploration by the Company, assisted by in-house proprietary geophysical techniques, has confirmed the prospectively of the belt for massive and disseminated nickel-copper-PGE sulphide mineralisation.

The Company is focusing on the Bulge ultramafic, a prominent thickened portion of ultramafic with a strike length of 8km situated along a more extensive ultramafic package located on the western flank of the project tenure.

Resource drilling was completed at Rosie last quarter on a nominal spacing of 80m x 80m with selected 40m x 80m infill as part of a Scoping Study on the prospect. An initial JORC Code compliant resource is currently being finalised.

BIRRINDUDU TIN PROJECT (IGO 100%)

The Birrindudu project is located 290km southeast of Kununurra in the Tanami Region of the Northern Territory. The project was initially identified during a review of results from the WMC Diamond Division database, being used for target generation by the Company under agreement with WMC, (now BHP Billiton) which highlighted an area of strongly anomalous tin.

Analysis of samples in the Company‟s own DBAE database over the area and subsequent reconnaissance and follow-up systematic stream sediment and soil sampling has confirmed the presence of tin and tungsten spatially associated with the Palaeoproterozoic Winnecke Granophyre.

A RAB drilling program to test the magnetic feature and confirm the source of primary tin mineralisation was undertaken during the quarter. A total of 220 shallow holes for a total 2099m was completed on 7 E-W and 1 N-NW trending traverses. Analytical results from drill samples are not yet available, however, the absence of readily pannable cassiterite in drill cuttings appears to have downgraded the potential of the project to host a large primary cassiterite accumulation.

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INDEPENDENCE GROUP NL QUARTERLY REPORT: 30 SEPTEMBER 2011

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EXPLORATION PROJECT GENERATION

DE BEERS DATABASE (IGO 100%)

In 2009 the acquired the non-diamond specific exploration database of De Beers Australia Exploration Limited (“DBAE”). This database represents the culmination of more than 30 years of exploration. The key assets of the database are the 292,000 surface geochemical samples and associated analytical results covering many mineral prospective regions throughout Australia ( Figure 1 ). As DBAE was solely focused on diamond exploration, less than half of the samples were appraised for commodities other than diamonds.

A total of 37,569 samples have been submitted for geochemical analysis with results from 32,693 samples having been received.

This work continues to generate a significant number of anomalies in gold, base metals and other commodities. Systematic prioritisation and field appraisal and ground acquisition of these anomalies is progressing.

DECEMBER QUARTER EXPLORATION PROGRAM

NICKEL/BASE METALS JAGUAR: DDH drilling at Lagonda. AC drilling along the Lagonda to Daimler trend and West Bentley. STOCKMAN: DDH drilling at Wilga South. DUKETON: Ongoing Scoping Study activities. BIRRINDUDU: Evaluation of RAB results. GOLD PROJECTS TROPICANA: Follow-up of targets north of Boston Shaker. Regional auger sampling and RC/aircore drill testing regional prospects. KARLAWINDA: Resource step-out and metallurgical drilling at Bibra. PROJECT GENERATION: DE BEERS: Continued analysis of priority geochemical samples and field follow-up of anomalies.

INDEPENDENCE GROUP NL

CHRISTOPHER M. BONWICK MANAGING DIRECTOR

COMPETENT PERSONS STATEMENTS:

Competent Person Sign Off: With the exception of the Tropicana Mineral Resources and Ore Reserves, the information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr Christopher M Bonwick who is a full-time employee of the Company and is a member of the Australasian Institute of Mining and Metallurgy. Christopher Bonwick has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Christopher Bonwick consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Tropicana: Please refer to the Company’s 26 July 2011 ASX announcement for Tropicana Mineral Resource and Ore Reserve Competent Persons Statement.

FORWARD-LOOKING STATEMENTS :

This document may include forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning Independence Group NL’s planned exploration program and other statements that are not historical facts. When used in this document, the words such as "could," "plan," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are forward-looking statements. Although Independence Group NL believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements.

Suite 4, Level 5 I South Shore Centre I 85 South Perth Esplanade I South Perth, Western Australia, 6151

PO BOX 496 I SOUTH PERTH I WESTERN AUSTRALIA 6951

T: +61 8 9238 8300 F: +61 8 9238 8399 E: contact@igo.com.au W: www.igo.com.au

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