IGO Interactive Annual Report 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 30 JUNE 2019 14 Mine properties (continued) (b) Key estimates and judgements (continued) (ii) Deferred stripping The Group defers advanced stripping costs incurred during the production stage of its open cut mining operations. This calculation requires the use of judgements and estimates, such as estimates of tonnes of waste to be removed over the life of the mining area and economically recoverable reserves extracted as a result. Changes in a mine's life and design may result in changes to the expected stripping ratio (waste to mineral reserves ratio). Any resulting changes are accounted for prospectively. 15 Exploration and evaluation Nova Operation $'000 Windward $'000 Stockman Project $'000 Jaguar Operation $'000 Other $'000 Total $'000 Year ended 30 June 2019 Opening net book amount 34,100 17,823 13,052 - 5,518 70,493 Additions* - - - - 27,478 27,478 Transfer from (to) mine properties in production - - - - (2,774) (2,774) Closing net book amount 34,100 17,823 13,052 - 30,222 95,197 Year ended 30 June 2018 Opening net book amount 34,100 17,823 13,052 5,250 2,843 73,068 Additions - - - 2,486 2,675 5,161 Transfer from (to) mine properties in production - - - 1,473 - 1,473 Disposal of subsidiary - - - (9,209) - (9,209) Closing net book amount 34,100 17,823 13,052 - 5,518 70,493 * Additions during the current financial year includes $22,243,000 relating to acquisition of the Southern Hills tenements. (a) Impairment The Group did not recognise any impairment charges during the current or previous reporting period. (b) Recognition and measurement Exploration for and evaluation of mineral resources is the search for mineral resources after the entity has obtained legal rights to explore in a specific area, as well as the determination of the technical feasibility and commercial viability of extracting the mineral resource. Exploration and evaluation expenditure is expensed to the profit or loss as incurred except in the following circumstances in which case the expenditure may be capitalised: • The existence of a commercially viable mineral deposit has been established and it is anticipated that future economic benefits are more likely than not to be generated as a result of the expenditure; and • The exploration and evaluation activity is within an area of interest which was acquired as an asset acquisition or in a business combination and measured at fair value on acquisition. Independence Group NL 30 Notes to the consolidated financial statements 30 June 2019 (continued) 15 Exploration and evaluation (continued) (b) Recogniti n a d measurement (continued) A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. An impairment exists when the carrying value of expenditure exceeds its estimated recoverable amount. The area of interest is then written down to its recoverable amount and the impairment losses are recognised in profit or loss. Upon approval for the commercial development of an area of interest, exploration and evaluation assets are tested for impairment and transferred to 'Mine properties in development'. No amortisation is charged during the exploration and evaluation phase. (c) Key estimates and judgements The recoverability of the carrying amount of the exploration and evaluation assets is dependent on the successful development and commercial exploitation, or alternatively, sale of the respective area of interest. The Group reviews the carrying value of exploration and evaluation expenditure on a regular basis to determine whether economic quantities of reserves have been found or whether further exploration and evaluation work is underway or planned to support continued carry forward of capitalised costs. This assessment requires judgement as to the status of the individual projects and their estimated recoverable amount. IGO ANNUAL REPORT 2019 — 93