Strategy

One of Independence Group’s (IGO’s) key strategies for achieving long term growth is the discovery and development of high-value ore bodies with a focus on gold, nickel and copper deposits. IGO recognises that exploration is inherently high risk and that many of the well known mining areas in Australia have been well explored. However, IGO believes that there are many more ore bodies yet to be discovered in Australia, in covered areas and in previously unrecognised mineralised belts. Whilst Australia continues to be the preferred destination, a number of overseas jurisdictions are becoming increasingly attractive for exploration and mining and opportunities in these countries are being actively considered. The following tactical approach is being applied to maximise our chance of success:

• Application of leading edge geoscientific techniques by a small, highly motivated and well resourced team with a track record of exploration success
• Investment in technical innovation, particularly in the development of geophysical tools and geochemical techniques to assist in the identification of buried deposits beneath thick cover
• Application of new technologies in established and emerging mineral belts to discover deposits missed by historical exploration methods
• Acquisition of major land positions in “frontier” belts not recognised as prospective by previous explorers, a classic example being the Tropicana Project
• Efficient assessment and farm-out or relinquishment of projects not meeting internal technical milestones.
• Exploration success requires focus and perseverance and IGO has the financial and technical resources to achieve this goal.

Exploration Technology and Techniques

An important component of IGO’s exploration strategy is the development of new and improved tools particularly in the fields of geophysics and geochemistry, both for in-mine use and on regional exploration programs. Through technical and research relationships IGO has assisted in the development of or gained access to geophysical tools that provide significant advantages in mine-site and greenfields exploration. These tools include:

• EM Torch System for use in-mine to identify new and remnant ore positions overlooked by traditional mine exploration techniques
• Down-hole magnetic TEM (“DHTEM”) systems and processing software that can be used to identify and model in 3D, mineralised systems intersected or closely missed in drilling programs
• High-Powered TEM Transmitter, which is significantly more powerful than commercially available systems, enabling surface TEM surveys to test deeper under cover and DHTEM surveys to test a greater distance around drill- holes both in-mine and on regional programs
• Surface Moving Loop TEM systems that can be used to identify bodies of conductive nickel sulphides in the highly- conductive regolith and salty groundwater environments of Western Australia, including beneath extensive salt lake cover where conventional EM systems are ineffective
• Low Temperature SQUID (“LTS”) technology via agreement with Anglo American Exploration (Australia) Pty Ltd (“AAE”), IGO has had access to AAEA’s LTS to explore for nickel in specified areas of the Yilgarn in Western Australia considered to be highly prospective for nickel sulphides.
• 3 D Seismic. IGO together with Curtin University have completed an extensive 3D seismic survey in the immediate vicinity of the Long Complex. IGO was one of the first adopters of this technology, originally developed for use in the petroleum industry, in nickel sulphide exploration. This survey has resulted in a greater understanding of the geological framework at Long and has aided in the identification of a number of interesting target positions that are planned to be tested for nickel sulphide mineralisation over the coming 12 months.

Exploration Technology and Techniques

Over the past 12 months IGO and its JV partners have made significant advances on a number of key gold projects and a number of new projects have been initiated. At Tropicana, the open-cut gold resource inventory for the Tropicana-Havana Zones now stands at over 5Moz, the Pre-feasibility Study was completed and a Bankable Feasibility study has commenced.

At Karlawinda, the focus of exploration has moved from Francopan to shallowly covered areas to the north at Bibra, where AC and RC programs are in the process of delineating what appears to be a very large gold mineralised system.

At Holleton, exploration has commenced testing the extensive greenstone belts under shallow cover evident in recent government aeromagnetic surveys which have not been explored by any previous companies.

Nickel exploration has concentrated on advancing key projects with highly significant results being returned from drilling at Duketon and continued encouragement from exploration on the Lake Lefroy tenure and also the Musgrave project which has reverted back to IGO control.
IGO looks forward to continued success from its ongoing aggressive exploration programs, at the Long mine, Tropicana and on regional exploration projects in the 2010 financial year.

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