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40 Independence Group NL
DIRECTORS’ REPORT
Directors' report
30 June 2016
(continued)
Operating and financial review (continued)
External factors affecting the Group's results (continued)
Other external factors and risks (continued)
• Changes in health, safety and environmental regulations;
• Environmental issues and social expectations; and
• Assumption of estimates that impact on reported asset and liability values.
Significant changes in the state of affairs
Significant changes in the state of affairs of the Group during the financial year were as follows:
The Company completed the acquisition of Sirius Resources NL (Sirius) in September 2015. Sirius was an ASX listed
minerals exploration and development company with a key focus on the development of the Nova Project, located east
of Norseman in Western Australia.
On 25 May 2015, the Company and Sirius announced two separate but inter-conditional Schemes of Arrangement,
being the Acquisition Scheme of Arrangement (the Acquisition Scheme), whereby the Company would acquire all of the
shares in Sirius, and the Demerger Scheme of Arrangement (Demerger Scheme), under which Sirius would create a
new listed company, S2 Resources Limited. Following the approval of the Schemes on 12 September 2015, the scheme
participants received 0.66 new shares in IGO and $0.52 cash per Sirius ordinary share.
The transaction was completed on 22 September 2015, resulting in cash consideration paid for the acquisition of Sirius
of $250.6 million plus the issue of 275,842,684 shares in the Company. Suspension of trading of Sirius was in effect on
close of business 10 September 2015. Implementation of the Schemes occurred on 22 September 2015 and integration
of Sirius into the Group was completed during the December 2015 quarter. During this quarter, the Company also
completed an Optimisation Study to bankable feasibility level which demonstrated a significant enhancement of the
project value.
In July 2015, the Company entered into a Syndicated Facility Agreement (Facility Agreement) with National Australia
Bank Limited, Australia and New Zealand Banking Group Limited and Commonwealth Bank of Australia Limited for a
$550 million unsecured committed term finance facility. The Facility Agreement comprises:
• A five year $350 million amortising term loan facility that was used to refinance the existing Nova Project finance
facility, and provide funds for the continued development, construction and operation of the Nova Project; and
• A five year $200 million revolving loan facility that was used to partially fund the payment of the cash component of
the Acquisition Scheme for Sirius (as discussed above) and transaction costs, in addition to providing funding for
general corporate purposes.
There have been no other significant changes in the state of affairs of the Group during the year.
Events since the end of the financial year
On 31 August 2016, the Company announced that a final dividend for the year ended 30 June 2016 would be paid on
23 September 2016. The dividend is 2 cents per share and will be fully franked.
On 27 July 2016, the Company announced it was conducting a fully underwritten institutional placement (Placement) to
raise approximately $250.0 million. The Placement comprised an issue of 66,666,667 new shares in the Company and
was underwritten at a price of $3.75 per share (Placement Price).
The Company also conducted a non-underwritten Share Purchase Plan (SPP) to facilitate retail shareholder
participation of up to $15,000 per eligible shareholder at the Placement Price, subject to an overall cap of $30 million (or
approximately 8 million shares) (the Placement and SPP together being the Equity Raising). The SPP was
oversubscribed, however in recognition of the strong interest in the SPP by eligible retail shareholders, the Company's
Board resolved to accept all valid applications without any scale back. The SPP resulted in the issue of an additional
8,388,689 ordinary shares and raised $31.5 million.
The Company undertook the Equity Raising to strengthen its balance sheet and to provide greater financial flexibility to
fund growth initiatives. Specifically, the Equity Raising provided funding for the remaining development capital
expenditure for the Nova Project, reducing the requirement for further drawdown under the Company's existing debt
facilities. The Equity Raising will also provide additional funds for the payment of residual acquisition costs (stamp duty),
funding for debt repayment and general corporate purposes including working capital.
Independence Group NL
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