IGO Interactive Annual Report 2018

DIRECTORS’ REPORT 30 JUNE 2018 LONG OPERATION Long nickel production was within guidance and the Operation has successfully transitioned to care and maintenance in June 2018. Up to the point of transition to care and maintenance, the Long Operation continued to supply ore to BHPB Nickel West under its ore tolling agreement, whereby the Group is paid for the nickel metal contained in the ore mined, less applicable ore toll charges and payability discounts. Total revenue decreased by 8% during FY18, due to decreasing mining activities. During the year a total of 181,822 tonnes of ore was mined, sourced from Moran (40%), Long (32%) and McLeay (28%), with the majority of ore continuing to be mined from long hole stoping. Payable cash costs including royalties (net of copper credits) were higher at $4.87 per payable pound of nickel (2017: $3.28 per payable pound of nickel). The table below highlights the key results and operational statistics during the current and prior year. LONG OPERATION 2018 2017 Total revenue $'000 64,782 70,475 Segment operating profit before tax $'000 1,368 716 Total segment assets $'000 22,194 38,693 Total segment liabilities $'000 26,725 40,402 Ore mined tonnes 181,822 205,372 Nickel grade head % 3.22 4.11 Copper grade head % 0.22 0.29 Tonnes milled tonnes 181,822 205,372 Nickel delivered (contained) tonnes 5,855 8,433 Copper delivered (contained) tonnes 394 592 Metal payable (IGO share) - Nickel tonnes 3,497 5,098 - Copper tonnes 160 240 Ni cash costs and royalties* A$ per pound of payable metal 4.87 3.28 * Cash costs include credits for copper. JAGUAR OPERATION FY18 financial and operational statistics provided below are for the period ending 31 May 2018, being the completion date for the divestment of the Jaguar Operation. Jaguar revenue for the period was $112.1 million, lower than the previous year result of $137.5 million due to lower zinc and copper production, combined with results for only 11 months of the year. This was partially offset by higher AUD dollar zinc and copper metal prices compared to the previous year. Segment operating profit before tax decreased by $20.6 million over the prior year predominately due to lower segment revenue, partially offset by higher general administration costs. Other production costs were in line with the previous financial year. Production from the Bentley underground mine was lower than the prior period predominantly due to the divestment at the end of May 2018, missing out on the final month of production. Higher grade stopes became available late FY18 which led to a strong finish to the year with ore mined for the month of May 2018 reaching a record production rate of 50,849 tonnes. Ore mined was 414,582 tonnes, at a zinc grade of 7.1% and copper grade of 0.6%. Processing plant performance was generally constrained by the availability of ore from the Bentley underground mine with 411,219 tonnes milled for the period ending May 2018. 40 — IGO ANNUAL REPORT 2018