IGO Interactive Annual Report 2019

DIRECTORS’ REPORT 30 JUNE 2019 Your Directors present their report on the consolidated entity (referred to hereafter as the Group) consisting of Independence Group NL (referred to hereafter as IGO or the Company) and the entities it controlled at the end of, or during, the year ended 30 June 2019. DIRECTORS The following persons held office as Directors of Independence Group NL during the whole of the financial year and up to the date of this report, unless otherwise noted: Peter Bilbe Peter Bradford Debra Bakker Peter Buck Geoffrey Clifford Keith Spence Neil Warburton PRINCIPAL ACTIVITIES The principal activities of the Group during the financial year were nickel, copper and cobalt mining and processing at the Nova Operation, non-operator gold mining from the Company’s 30% interest in the Tropicana Operation and ongoing mineral exploration in Australia and overseas. DIVIDENDS Dividends paid to members during the financial year were as follows: 2019 $’000 2018 $’000 Final ordinary dividend for the year ended 30 June 2018 of 2.0 cents (2017: 1.0 cent) per fully paid share 11,809 5,868 Interim ordinary dividend for the year ended 30 June 2019 of 2.0 cents (2018: 1.0 cent) per fully paid share 11,810 5,868 23,619 11,736 In addition to the above dividends, since the end of the financial year the Company has announced the payment of a final ordinary dividend of $47,264,000 (8 cents per fully paid share, franked to 97%) to be paid on 26 September 2019. OPERATING AND FINANCIAL REVIEW This review should be read in conjunction with the financial statements and the accompanying notes. COMPANY OVERVIEW Independence Group NL is a leading ASX-listed (ASX:IGO) mining and exploration company with a strategic focus on high quality assets of scale and longevity, and an evolving strategy to be a globally relevant supplier of metals that are critical to energy storage and renewable energy. The Company’s focus is on its 100% owned, world class Nova nickel-copper-cobalt operation, its 30% interest in the Tropicana Operation, a joint venture with AngloGold Ashanti Australia Limited (AGAA), and its portfolio of belt scale exploration projects in Australia (Western Australia, Northern Territory, South Australia) and Greenland. The Company listed on the ASX on 17 January 2002, having traded as Independence Gold NL from 17 January 2002 to 19 December 2003. The Group currently has the following mining and processing operations in production in Western Australia: • The Nova Operation, 100% owned, was acquired as a development stage project via the acquisition of Sirius Resources NL (Sirius) in September 2015. The Nova Operation is located in the Fraser Range, approximately 140km east-northeast of Norseman, 360km southeast of Kalgoorlie and 380km from the port of Esperance in Western Australia. The Ngadju People are the Traditional Owners of the land. The Nova Operation comprises an underground mine consisting of two orebodies, Nova and Bollinger. The Nova-Bollinger magmatic nickel-copper deposits are hosted within the lower granulite facies mafic rocks of the Fraser Zone of the Albany-Fraser Orogen. The host rocks of the Nova-Bollinger deposit consist of a suite of meta-gabbroic to meta-picrite cumulates which have been metamorphosed to a high metamorphic grade. These units are interpreted to have been emplaced as a layered sill in an extensional sedimentary basis. The deposit is situated on the north-western side of an eye-like structural feature which is best seen in regional and ground magnetics. In addition, the Nova Operation consists of a processing facility with nameplate production capacity of 1.5 million tonnes per annum that produces a nickel concentrate and a copper concentrate and associated non-processing infrastructure. Commercial production was declared at the Nova Operation on 1 July 2017, with nameplate production capacity reached shortly thereafter. Nova has since demonstrated steady state production at or above the nameplate 1.5 million tonnes per annum rate throughout FY19 and options to increase throughput consistently beyond the nameplate capacity to maximise production as grade drops over the remaining mine life have progressed. • The Tropicana Operation (IGO 30%; AGAA 70% and operator) is located 330km east northeast of Kalgoorlie. The gold deposits occur over a 5km strike length with gold mineralisation intersected to a depth of 1km vertically beneath the natural surface. Mining is both surface, with production from up to four contiguous open pits extending along the strike length, and more recently underground, with the Boston Shaker Underground being developed and expected to deliver first gold production in the September 2020 quarter. The processing plant, utilising conventional crushing, grinding and CIL (carbon-in-leach) recovery technology, was originally designed with a nameplate capacity of 5.8 million tonnes per annum and this was achieved in March 2014. In 2016 and 2017, an optimisation project increased the 36 — IGO ANNUAL REPORT 2019