IGO LIMITED — Interim / Quarterly Report 2015

Oct 28, 2015

INDEPENDENCE GROUP NL

Peter Bradford, Managing Director and CEO September 2015 Quarter Results Presentation 29 October 2015

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 securities in IGO or as an inducement to make an offer or invitation with respect to those securities in any jurisdiction.
• This presentation contains general summary information about IGO. The information, opinions or conclusions expressed in the course of this presentation should be read in conjunction with IGO's other periodic and continuous disclosure announcements lodged with the ASX, which are available on the IGO website. No representation or warranty, express or implied, is made in relation to the fairness, accuracy or completeness of the information, opinions and conclusions expressed in this presentation.
• This presentation includes forward looking information regarding future events, conditions, circumstances and the future financial performance of IGO. Often, but not always, forward looking statements can be identified by the use of forward looking words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "continue" and "guidance", or other similar words and may include statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs. Such forecasts, projections and information are not a guarantee of future performance and involve unknown risks and uncertainties, many of which are beyond IGO's control, which may cause actual results and developments to differ materially from those expressed or implied. Further details of these risks are set out below. All references to future production and production guidance made in relation to IGO are subject to the completion of all necessary feasibility studies, permit applications and approvals, construction, financing arrangements and access to the necessary infrastructure. Where such a reference is made, it should be read subject to this paragraph and in conjunction with further information about the Mineral Resources and Ore Reserves, as well as any Competent Persons' Statements included in periodic and continuous disclosure announcements lodged with the ASX. Forward looking statements in this presentation only apply at the date of issue. Subject to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing this information IGO does not undertake any obligation to publically update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.
• There are a number of risks specific to IGO and of a general nature which may affect the future operating and financial performance of IGO and the value of an investment in IGO including and not limited to economic conditions, stock market fluctuations, commodity demand and price movements, access to infrastructure, timing of environmental approvals, regulatory risks, operational risks, reliance on key personnel, reserve and resource estimations, native title and title risks, foreign currency fluctuations and mining development, construction and commissioning risk. The production guidance in this presentation is subject to risks specific to IGO and of a general nature which may affect the future operating and financial performance of IGO.
• Any references to IGO Mineral Resource and Ore Reserve estimates other than the Nova Project should be read in conjunction with IGO's 2014 Mineral Resource and Ore Reserve announcement dated 28 August 2014 (excluding Stockman Ore Reserves) and Stockman Optimisation Study announcement dated 28 November 2014 (updated Stockman Ore Reserves), and lodged with the ASX, which are available on the IGO website.
• Any references to Mineral Resource and Ore Reserve estimates for the Nova Project should be read in conjunction with Sirius Resources NL's ASX announcement dated 14 July 2014.
• All currency amounts in Australian Dollars unless otherwise noted.
• Cash Costs are reported inclusive of Royalties and after by-product credits on per unit of payable metal basis, unless otherwise stated
• IGO reports All-in Sustaining Costs (AISC) per ounce of gold for its 30% interest in the Tropicana Gold Mine using the World Gold Council guidelines for AISC. The World Gold Council guidelines publication was released via press release on 27th June 2013 and is available from the World Gold Council's website.
• Underlying EBITDA is a non-IFRS measure and comprises net profit or loss after tax, adjusted to exclude tax expense, finance costs, interest income, asset impairments, depreciation and amortisation, and once-off transaction costs.

September 2015 Quarter Highlights

Leading Australian diversified mining company

Financial and Corporate

• Completed acquisition of Sirius on 22 September 2015
• Cash and bullion of \$131.8M and debt of \$200.0M at quarter end for net debt of \$68.2M
• \$33.0M of operating cash flow for the quarter, which is after expenditure of \$8.2M on exploration
• Underlying EBITDA of \$40.3M and underlying profit after tax of \$12.5M
• Unaudited loss of \$49.9M after attributable transaction costs of \$63.6M

Tropicana performance within guidance and improved relative to June quarter

• 35,461oz (IGO share) at a cash cost of \$624/oz and AISC of \$798/oz

Jaguar productivity continuing to improve

• 11,404t Zn and 1,429t Cu at a C1 cash cost of \$0.65/lb of payable Zn

Long restructuring implemented in September

• 2,262t contained Ni at a C1 cash cost of \$4.24/lb of payable Ni

Nova construction on schedule and on budget

• Project currently 44% complete with underground development and process plant construction currently ahead of plan – first concentrate production forecast for December 2016

Sustainability

Continued strengthening and improvement across the business

Safety

• Two lost time injuries recorded in the quarter

Sustainability reporting

• First sustainability report released
• Available in soft copy from the IGO website (www.igo.com.au)

1) LTIF is lost time injury frequency rate expressed in number of injuries per million hours worked

2) TRIF is total recordable injury frequency rate expressed in number of injuries per million hours worked

Unaudited financial highlights

Balance sheet remains strong

Unaudited (\$'million)	Q1 FY16	Q1 FY15
Revenue	124.2	129.1
Underlying EBITDA(1)	40.3	58.1
Underlying NPAT(1)	12.5	25.1
Profit after tax	(49.9)	25.1
Net Cash Flow From Operating Activities	33.0	48.4
Underlying Free Cash Flow(1)	16.6	25.4
Cash (at end of period)	131.3	44.3
Marketable Securities (at end of period)	15.7	1.1
Refined bullion (at end of period)	0.5	0.0
Debt (at end of period)	200.3	2.7

1) Underlying NPAT and Underlying EBITDA are non-IFRS measure (refer to Disclaimer page). Underlying NPAT excludes \$63.6 million of Sirius acquisition transaction costs. Underlying Free Cash Flow excludes the cash component of the Sirius acquisition, net of cash acquired; totalling \$202.0 million.

Financial Notes

Adjustments for Sirius transaction and updated gold hedging position

Finalising Sirius Acquisition

• Underlying EBITDA of \$40.3M (June 2015 \$38.0M)
• Unaudited profit after tax of \$12.5M (June 2015 \$7.5M)
• Unaudited loss after tax of \$49.9M included tax unadjusted transaction costs of \$63.6M relating to the acquisition of Sirius
• Cash and bullion of \$131.8M and debt of \$200.0M at quarter end for net debt of \$68.2M

Gold Hedging

• During the quarter small additions were made to existing gold hedging positions:

Additional Hedging
Gold in FY2016 –	Avg. 1,950oz/mth to June 2016 at avg
Par Forwards	price of \$1,606/oz
Gold in FY2017 –	Avg. 2,750oz/mth to June 2017 at avg
Par Forwards	price of \$1,637/oz

• Total gold hedging, including the above and pre-existing costless caps and collars, does not exceed 45% of forecast attributable production in any one month.

Tropicana

Production and cash costs within or better than annualised guidance

Gold production and costs

• 35,461oz gold produced and 36,341oz sold (IGO share)
• Cash costs of \$624/oz produced and AISC of \$798/oz sold

Mining

• Higher productivity rates sustained with 6.2M BCM mined

Processing

• 1.56Mt processed at average grade of 2.66g/t and 89.3% recovery
• 6.2Mtpa rate achieved in the quarter at an average utilisation of 90%

Capital projects

• Gas pipeline ahead of schedule
• Process plant debottlenecking continues with current work focussed on conveyor capacity in the crushing area

Near mine exploration

• 34km of RC and DDH drilling completed with positive results
• Focus is down-dip and along strike extensions of existing ore bodies
• Regional exploration focussed on targets within 25km of mine

Jaguar

Zinc production beats guidance but cash costs impacted by lower Copper by-product credits than guidance

Production and costs

• 11,407t Zn and 1,429t Cu produced in concentrates
• Cash cost of \$0.65/lb payable zinc net of by-product credits and royalties

Underground mining

• Tonnes mined were in line with mine plan at 120,157t

Processing

• 123,550t milled at average grade of 10.40% Zn and 1.41% Cu
• Represents annualised rate of 494,000tpa

Near mine exploration

• Drilling commenced to upgrade the Flying Spur mineral resource from inferred to indicated and extend understanding of Arnage lens at depth and is expected to be complete in January
• Drilling to date confirms or improves the overall width and grade of Flying Spur
• Significant intersection drilled 100m below the existing Arnage resource wireframe
• At Triumph a resource drilling program was completed and preliminary economic studies have been commenced

Long

Quarter of transition to scaled back production rate

Production and costs

• 2,262t contained nickel produced
• Cash costs of \$4.24/lb payable Ni net of by-product credits and royalties

Underground mining

• 66,315t mined at an average grade of 3.41% Ni
• Mining activities scaled back during the quarter with mining now focussed on longhole open stoping of the Moran deposit

Near mine exploration

• Drilling at Moran South has identified a mineralised envelope
• Drilling of the mineralised envelope and potential extensions to the south continues in the December quarter

Nova overview

Fully financed, in construction, on schedule and on budget

Overall

• Significant progress made during quarter and project now 44% complete
• Project remains on track for commissioning in late 2016 and production of first concentrates in December 2016
• Optimisation study underway and expected to be completed in December 2015

Infrastructure

• Tailings dam is complete and being used to store water from mine dewatering
• Aerodrome, accommodation complex, central water management facility and concrete batch plant are all operational
• Permanent access road is expected to be completed in the December quarter
• Power generation contract awarded and 11kv overhead powerline commenced

Underground development

• Mine development ahead of schedule with 1,460m development to date and the decline passing the 1,000m mark in September

Process plant construction

• GR Engineering Services mobilised to site and commenced installation of structural concrete

Nova Project progress

Project currently on time and on budget

Greenfields exploration

Long term commitment to delivering organic growth

Lake Mackay

• AC program of 3,216m completed over six gold and multi-element surface anomalies
• Bumblebee discovery
• 2m @ 1.3g/t Au, 34.6g/t Ag, 7.4% Cu, 1.6% Zn, 1.3% Pb and 0.09% Co from 29m (oxide)
• 7m @ 3.3g/t Au, 37.7g/t Ag, 3.2% Cu, 1.3% Zn, 0.9% Pb and 0.08% Co from 35m (supergene)
• 5m @ 2.4g/t Au, 12.4g/t Ag, 1.4% Cu, 1.0% Zn, 0.2% Pb and 0.1% Co from 56m (fresh rock)

Bryah Basin

• RC/DDH to test 2.5km long anomaly at Neptune on 5x500m sections
• Drilling intersected disseminated, blebby and stringer style sulphides
• Currently waiting for final assays

Salt Creek

• East of Tropicana prospective for magmatic Ni-Cu mineralisation
• Anomalism in AC with elevated Ni-Cu at Cobra to be followed up by a MLEM program in December quarter

FY16 guidance

Long guidance modified in September following restructuring

Tropicana (IGO share)

• 129,000 to 141,000oz at average cash cost of \$640 to \$710/oz Au
• AISC of \$820 to \$910/oz Au sold
• Sustaining capex of \$8 to \$10M and Exploration of \$9 to \$11M

Jaguar

• 35,000 to 40,000t Zn and 7,500 to 8,500t Cu in conc. at average cash cost of \$0.40 to \$0.60/lb Zn
• Sustaining capex of \$4 to \$5M, development of \$12 to \$14M and exploration of \$10 to \$12M

Long

• 8,500 to 9,000t contained Ni at average cash cost of \$3.50 to \$4.00/lb Ni
• Sustaining capex of \$3 to \$5M and Exploration of \$13 to \$15M

Nova

• Total development cost of \$443M of which \$120M spent to 30 September 2015

Exploration and Development

• \$10 to \$12M on greenfields and generative exploration
• \$2M on Stockman Project permitting and holding costs

Concluding comments

Diversified mining company delivering cash flow and growth

Solid quarter of operating results

• All mines delivering broadly in line with guidance range
• Restructuring implemented at Long in September to reset cost structure

Nova acquisition completed: focus now on continued delivery from operations and Nova construction completion

• Nova is fully funded and expected to commence production in late 2016
• Also actively drilling to extend mine lives at Long, Jaguar and Tropicana

Outlook and catalysts for value recognition

• Complete Nova optimisation study in December 2015
• Commencement of production at Nova in December 2016
• Ongoing operations and brownfields exploration progress at Tropicana, Jaguar and Long
• Greenfields exploration progress at Lake Mackay, Fraser Range-Tropicana and Bryah Basin