INDEPENDENCE GROUP NL ANNUAL REPORT 2017

Directors' report 30 June 2017 (continued) Operating and financial review (continued) Operations Tropicana Operation Tropicana revenue for the period was $211.9 million, marginally lower than the previous year result of $215.0 million. The Company’s share of gold refined and sold was 128,601 ounces, down 5% on the prior year as a result of lower grade milled following the cessation of grade streaming in mid-FY16. This was partially offset by an increase in ore milled for the year, a total of 7.3 million tonnes, as a result of a plant throughput optimisation project completed during FY17. The average AUD gold price achieved throughout the period was $1,649 per ounce, an increase of $71 per ounce compared to the previous period. 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 $817 per ounce, while All-in Sustaining Costs (AISC) per ounce sold were $1,162 per ounce. 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. Total Tropicana assets increased by 23.5% due to ongoing contributions by the Company to the operation by way of cash calls paid to the joint venture manager ($154.9 million for the year). Tropicana liabilities largely remained steady, reducing by $2.7 million to $34.0 million. During the year, a total of 7.9Mt of full grade ore (>0.6g/t), 1.0Mt of marginal ore (grading between 0.4 & 0.6g/t Au) and 73.2Mt of waste material was mined, with the average run-of-mine grade for full grade ore (>0.6g/t Au) being 2.05g/t Au for the year. Ore milled was 7.3Mt, which was up 12% on the prior year as a result of the processing plant optimisation work, while grade milled was 2.07g/t for FY17. At year end, the capitalised run of mine stockpile totalled 9.5Mt grading an average of 0.93g/t (2016: 9.0Mt at 0.96g/t). Based on current Ore Reserves, the mine currently has a life of approximately 7.5 years. The table below outlines the key results and operational statistics during the current and prior year. Tropicana Gold Mine 2017 2016 Total revenue $'000 211,915 214,998 Segment operating profit before tax $'000 58,300 64,330 Total segment assets $'000 1,037,257 840,174 Total segment liabilities $'000 34,071 36,813 Gold ore mined (>0.6g/t Au) '000 dmt 7,900 7,289 Gold ore mined (>0.4 and 0.6g/t Au) '000 dmt 975 1,210 Waste mined '000 dmt 73,249 50,350 Gold grade mined (>0.6g/t) g/t 2.05 2.13 Ore milled '000 dmt 7,326 6,528 Gold grade milled g/t 2.07 2.39 Metallurgical recovery % 89.1 89.3 Gold recovered ounces 431,005 448,546 Gold produced ounces 431,625 448,116 Gold refined and sold (IGO share) ounces 128,601 135,864 Cash Costs $ per ounce produced 817 730 All-in Sustaining Costs (AISC)* $ per ounce sold 1,162 918 * 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. Independence Group NL 7 38 — IGO ANNUAL REPORT 2017 DIRECTORS’ REPORT 30 JUNE 2017 (continued)