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36 Independence Group NL
DIRECTORS’ REPORT
Directors' report
30 June 2016
(continued)
Operating and financial review (continued)
Operations (continued)
Tropicana Gold Mine (continued)
Tropicana Gold Mine
2016
2015
Total revenue
$'000
214,998
218,966
Segment operating profit before tax
$'000
64,330
76,117
Total segment assets
$'000
840,174
645,071
Total segment liabilities
$'000
36,813
31,748
Gold ore mined (>0.6g/t Au)
'000 dmt
7,289
10,763
Gold ore mined (>0.4 and 0.6g/t Au)
'000 dmt
1,210
1,601
Waste mined
'000 dmt
50,350
42,761
Gold grade mined (>0.6g/t)
g/t
2.13
2.06
Ore milled
'000 dmt
6,528
5,826
Gold grade milled
g/t
2.39
2.98
Metallurgical recovery
%
89.3
90.2
Gold recovered
ounces
448,546
492,780
Gold produced
ounces
448,116
496,413
Gold refined and sold (IGO share)
ounces
135,864
150,836
Cash Costs
$ per ounce produced
730
568
All-in Sustaining Costs (AISC)**
$ per ounce sold
918
795
** All-in Sustaining Costs is a measure derived by the World Gold Council. On 27 June 2013, the Council released a publication
outlining definitions of both Cash Costs and All-in Sustaining Costs.
Tropicana revenue for the period was $215.0 million, which was slightly lower than the previous year as a result of the
cessation of grade streaming in December 2015. The average AUD gold price achieved increased by $111 per ounce or
8% compared to the previous period whilst gold sold to the Company's account decreased by 14,972 ounces or 10%.
Cash costs per ounce produced, which comprises the costs of producing gold at the mine site and includes credit
adjustments for waste stripping costs and inventory build and draw costs, were $730 or 29% higher than the previous
period. All-in Sustaining Costs (AISC) per ounce sold were $918 or 15% higher. AISC comprises of cash costs and
capitalised sustaining deferred waste stripping costs, sustaining exploration costs, sustaining capital and non-cash
rehabilitation accretion costs. AISC excludes improvement capital expenditure and other sustaining or expansion
exploration expenditure.
During the period, optimisation and upgrades have steadily increased processing plant throughput. Annualised
throughput continued to trend higher with an annualised rate of 6.9Mtpa being achieved in the June 2016 quarter.
Total Tropicana segment assets increased by 30% due to ongoing contributions by the Company to the operation by
way of cash calls paid to the joint venture manager ($148.8 million for the year). During the year, a total of 7.3Mt of full
grade ore (>0.6g/t), 1.2Mt of marginal ore (grading between 0.4 & 0.6g/t Au) and 50.3Mt of waste material was mined,
with the average run-of-mine grade for full grade ore (>0.6g/t Au) being 2.13g/t Au for the year. At year end, the
capitalised run of mine stockpile comprised ore > 0.6g/t and totalled 9.0Mt grading an average of 0.96g/t (2015: 8.9Mt at
1.09g/t).
Based on current ore reserves, the mine currently has a life of approximately 7.5 years.
Long Operation
Independence Long Pty Ltd has entered into a long term ore tolling agreement with BHPB Nickel West whereby the
Group is paid for the nickel metal contained in the ore mined, less applicable ore toll charges and payability discounts.
Revenue from nickel sales is priced on a quotational period of three months after the month of production. 70% of the
sales receipt is provisionally paid based on the average London Metals Exchange (LME) price for the month of delivery;
a balancing adjustment is paid in the fourth month after delivery based on the average LME price of the third month
after delivery. The mine produced 8,493t of contained nickel during the year at payable cash costs including royalties
(net of copper credits) of $3.67/lb (2015: $4.01/lb).
Independence Group NL
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