I
G
O
A
N
N
U
A
L
R
E
P
O
R
T
2
0
1
9
I
N
D
E
P
E
N
D
E
N
C
E
G
R
O
U
P
N
L
A
B
N
4
6
0
9
2
7
8
6
3
0
4
ANNUAL
REPORT
2019
WHO WE ARE
Independence Group NL (‘IGO’ or ‘the
Company’) is a leading ASX-listed
exploration and mining company with a
strategic focus on metals that are critical
to energy storage and renewable energy.
Headquartered in Perth, Western Australia,
the Company owns 100% of the Nova
nickel-copper-cobalt operation and a 30%
non-operator interest in the Tropicana
Operation, a Joint Venture with AngloGold
Ashanti Australia Limited. In addition, the
Company is pursuing aggressive organic
growth through its portfolio of high-quality
belt scale exploration projects across
Australia and overseas that prioritise nickel
and copper exploration and discovery.
ABOUT THIS REPORT
This annual report is a summary of IGO
and its subsidiary companies’ operations,
activities and financial position as at
30 June 2019.
All dollar figures are expressed in Australian
dollars unless otherwise stated.
Nova Operation
CONTENTS
FY19 Snapshot
Chairman & CEO Message
Our Purpose & Strategy
Executive Leadership Team
Our People
Our Safety Performance
Making a Difference
Sustainability
Operational Scorecard & Outlook
Key Operations & Projects
Nova Operation
Tropicana Operation
Regional Exploration & Development
Mineral Resources & Ore Reserves
Corporate Governance
Board Profile
Directors’ Report & Remuneration Report
FY19 Financial Statements
Additional ASX Information
Company Directory
02
04
06
08
10
14
16
18
20
21
22
24
26
28
32
34
36
65
129
132
IGO ANNUAL REPORT 2019 — 1
FY19 SNAPSHOT
IGO achieved record revenue and underlying EBITDA during the 2019 financial year. The successful delivery of
the second year of commercial production at Nova exceeded production guidance, and the continuing strong
performance from Tropicana comfortably met production guidance. The performance of our two core assets
generated underlying free cash flow of $278M and net profit after tax of $76M.
These outstanding financial results reflect the quality of our world class asset portfolio and our people, who are
focused on delivering high margin products made safely, ethically, sustainably and reliably.
AT A GLANCE
NOVA'S PRODUCTION
Nova’s second year of commercial
production exceeded the top end
of metal production guidance with
production of 30,708t nickel and
13,693t copper.
TROPICANA PRODUCTION
Tropicana delivered 518,172oz of
gold production on a 100% basis.
EXPLORATION ACTIVITY
Substantial exploration activity
continued across the IGO portfolio.
NEW DEVELOPMENT
Development of the Boston Shaker
Underground mine commenced at
Tropicana in May 2019.
SMART SOLUTIONS
Construction of a six-megawatt
hybrid diesel-solar plant
commenced at Nova.
PORTFOLIO
Further portfolio rationalisation with
divestment of the Long Operation.
2 — IGO ANNUAL REPORT 2019
FY19 FINANCIAL SUMMARY
HIGHLIGHTS
Total revenue and other income
Underlying EBITDA1
Profit after tax
Net cash flow from operating activities
Underlying free cash flow1
Total assets
Cash
Marketable securities
Total liabilities
Shareholders’ equity
Net tangible assets per share ($ per share)
Dividends per share paid – fully franked (cents)
SHARE PRICE PERFORMANCE 2
FY19
$M
793
341
76
372
278
2,190
348
28
341
1,849
$3.13
4.0
FY18
$M
781
339
53
278
138
2,175
139
24
396
1,779
$3.03
2.0
FY17
$M
422
151
17
78
(113)
2,208
36
15
476
1,733
$2.95
3.0
IGO HISTORICAL PAYABLE METAL
The historical payable metal charts represent five years of contribution from IGO’s current operations
and historical contributions from the Long and Jaguar operations that are no longer in our portfolio.
In FY19 all nickel, copper and cobalt was derived from Nova with all gold contributed from the
Tropicana JV (IGO 30% share).
NICKEL (t)
GOLD (oz)
COPPER (t)
COBALT (t)3
25,000
20,000
15,000
10,000
5,000
-
5
1
Y
F
6
1
Y
F
7
1
Y
F
8
1
Y
F
9
1
Y
F
200,000
150,000
100,000
50,000
-
5
1
Y
F
6
1
Y
F
7
1
Y
F
8
1
Y
F
9
1
Y
F
15,000
12,000
9,000
6,000
3,000
-
5
1
Y
F
6
1
Y
F
7
1
Y
F
8
1
Y
F
9
1
Y
F
400
350
300
250
200
150
100
50
-
5
1
Y
F
6
1
Y
F
7
1
Y
F
8
1
Y
F
9
1
Y
F
1 See Notes to Glossary of Terms for definitions
2 As at market close 23 August 2019
3 FY18 represented the first year of commercial
production at Nova and first production of cobalt
in the IGO portfolio.
OUR PEOPLE
Company-wide employee
engagement survey completed
with positive improvements across
many areas:
Award of 27% of internal promotions
to female candidates, along with
60% of manager promotions to
female candidates.
• Overall engagement score of 70%,
an increase of 15% from 2018.
• 90% of those surveyed said
IGO has a work environment
accepting of diverse
backgrounds.
• 86% of those surveyed indicated
that they are proud to work for IGO.
Improved gender diversity balance
achieved for new graduates
recruited for FY20
(38.5% graduates female).
Participation in the IGO Graduate
and Vacation Programs increasing
year-on-year with a total of 13 first,
second- and third-year graduates
working with us at year-end.
SAFETY PERFORMANCE
Lost Time Injury Frequency Rate per
million hours worked was 1.37, down
from 2.39 in FY18.
IGO’s Total Reportable Injury
Frequency Rate for FY19 was 9.58,
down from 19.14 for the previous year.
Embedding an inter-dependent
safety culture and reducing
potential incidents continues to be a
key focus for the Company in FY20.
MAKING A DIFFERENCE
IGO’s Corporate Giving program
made a difference to over 46
organisations and programs.
Over 80 IGO employees
participated in IGO volunteer
opportunities in FY19.
Over $475,000 invested in Corporate
Giving over the year compared to
$252,000 in FY18.
SUSTAINABILITY
In FY19, IGO made production
royalty payments to the Ngadju
Native Title Aboriginal Corporation
(NNTAC) totalling $3.3M.
Positive results from the IGO Social
Impact Assessment study following
over 300 responses from stakeholders
in our host communities in Norseman
and Esperance.
IGO ANNUAL REPORT 2019 — 3
CHAIRMAN &
CEO MESSAGE
In FY19, IGO continued to uphold
our social licence to operate and
further understand the matters that
are material to our stakeholders.
Community consultation and
engagement efforts included the
completion of a Social Impact
Assessment study related to our
Nova Operation and Fraser Range
exploration activities, holding
local community update meetings,
investing in our community with our
corporate giving programs, as well as
active engagement with the Ngadju
people, who are the native title
holders of the land on which the Nova
Operation sits, as well as a key area of
our exploration activities.
We are very pleased to report that we
made significant improvements in our
Lost Time Injury Frequency rates and
Medically Treated Injury Frequency
rates during the year. In addition, we
also saw a lower number of reported
serious potential incidents indicating
more active and engaged visible safety
leadership by our people.
At IGO, we are highly committed to
delivering safe, reliable and sustainable
operations and we will be held
accountable for ensuring continuous
improvement of our performance. We
can, and always will, pursue efforts to
make our workplaces safe for all people
and promote a culture that prioritises
the care and wellbeing of our people.
An engaged workforce
Over the last few years we have made
great progress in understanding and
shaping the IGO culture, to deliver
the type of organisation that our
people want to be part of and can be
proud of. This journey has involved
everyone in the business in many
different ways, including the employee
engagement and opinion surveys that
we have undertaken since December
2016, culture workshops and, most
importantly, one on one conversations.
We are proud of what we have achieved
and continue to be impressed with
the genuine insights and engagement
by our people. This has enabled us to
shape a unique company culture that is
delivering real and lasting benefits to
many areas of the business. In FY19, we
achieved a significant improvement in
employee engagement compared to the
previous year with IGO’s organisational
engagement score increasing by 15%
to 70%. Importantly, 86% of our survey
respondents indicated that they
are proud to work for IGO, and 82%
indicated that their career intention
was to stay at IGO. These results are all
better than the external benchmarking
norm and pleasing to see.
IGO’s transformation and continued
success is a tribute to our people. They
are bold, passionate, fearless and fun.
They make IGO a smarter, kinder, more
innovative company. Together, we are
making a difference!
Streamlined portfolio with
world-class assets
In FY19, we continued our enduring
focus on establishing IGO’s portfolio
of high quality, longer life and larger
scale projects. This is reflected in both
Nova and Tropicana delivering solid
production results as well as the further
strengthening of the portfolio through
the divestment of the Long Operation.
A number of notable achievements
were made during FY19, including:
• better than guidance production
from Nova in its second year
of commercial production and
continued strong performance
from Tropicana;
• commencement of the development of
the Boston Shaker Underground mine;
• continued commitment to
exploration, including assembling
a talented and experienced
geoscience team, as well as
encouraging results from the
Ladies and gentlemen, it is our
joint pleasure to summarise
IGO’s achievements for the 2019
financial year.
Our purpose and strategy
At IGO, we have made good progress
on our strategic aspiration to become
a globally relevant supplier of metals
that are critical to energy storage and
renewable energy. We do this with our
purpose at the heart of everything we
do - making a difference.
We care
Our alignment to clean energy is
complemented by our commitment
to being proactively green, which is
achieved by embracing renewable
energy and innovation to reduce our
carbon footprint. IGO will continue to
produce high-quality products that
meet our customers’ needs, made
safely, sustainably and reliably.
We understand that not only
shareholders, but also current
and prospective employees, local
communities and customers all
have a growing interest in how
companies are conducting their
business; a matter that is increasingly
scrutinised with environment, social
and governance (ESG) evaluations, in
addition to analysing operational and
financial performance.
4 — IGO ANNUAL REPORT 2019
drilling programs and signing new
partnerships, all in an effort to
discover the mines of the future; and
• continuing to emphasise the
importance that culture has on our
business, resulting in an engaged
workforce, by co-creating a
workplace that is fun, dynamic and
exciting, made up by people who are
motivated and energised to come to
work and make a difference.
The better than guidance production
performance at Nova and on guidance
production from Tropicana for FY19
reflects the quality of our assets,
and, more importantly, the consistent
high performance by our world class
operating team at Nova and the joint
venture team at Tropicana.
This impressive operational
performance from both Nova and
Tropicana underpins our growth
strategy that remains focused on
exploration and discovery, as well as
the potential downstream processing
opportunity to produce battery grade
nickel sulphate from Nova concentrate.
Vertical integration
During FY19, we made notable
progress with our nickel sulphate
downstream processing studies,
achieving high extraction rates for
nickel and cobalt in excess of 97%, and
having produced high-quality, battery
grade nickel sulphate and saleable
copper-cobalt mixed sulphide
products. Further work remains to be
done to optimise the process design to
minimise waste and maximise saleable
by-product, as well as completion of
trade-off studies to determine the
optimum project location, with key
drivers being access to and availability
of power, water, transportation
options, workforce and environment
and community considerations.
The objective of the downstream
processing study is to demonstrate
whether or not the project can deliver
a compelling value to IGO relative
to conventional nickel sulphide
concentrate offtake arrangements.
Consequently, in parallel to the
downstream processing studies, we
continue to engage with offtakers to
understand strengthening demand
and pricing for Nova style Class I nickel
sulphide concentrates.
Organic growth
Exploration and discovery are core
to the IGO DNA and over the last few
years we have prioritised exploration
and building a “best in class”
exploration team and capability.
Our exploration team has a diversity
of experience and expertise and a
strategy firmly aligned with our focus
on the discovery of metals critical to
clean energy. We prioritise nickel and
copper exploration and discovery
while remaining attentive to other
commodity opportunities.
In parallel, we have transformed
our exploration project portfolio
to increase our exposure to belts
and projects that have the potential
to deliver multiple tier one nickel
and copper discoveries. We have
also continued to consolidate a
leading ground position in the highly
prospective Fraser Range to capitalise
on our investment in and geological
understanding of Nova.
Our portfolio also includes belt-
scale greenfield opportunities in the
Northern Territory at the expanded
Lake Mackay Project and 100% owned
Raptor Project, as well as our new
West Kimberley Project, and Frontier
Project in Eastern Greenland.
Nickel as a strategic metal of
the future
Nickel is poised to benefit from
the structural shift to energy
storage and electric vehicles, and
importantly the transition to increased
use of nickel dominant, higher
energy density lithium-ion battery
technologies in electric vehicles. This,
combined with continued demand
growth for nickel from the stainless
steel and specialist nickel alloy
markets, will transform our industry
and our Company.
Thank you
We would like to take the opportunity
to thank all of our stakeholders,
which include our employees, host
communities, suppliers, contractors,
joint venture partners, industry
associates and regulators. Thank you
also to our shareholders, including
our employees, who are all owners
of the business, for your continuing
support and trust in the Board and
management team.
These are exciting times at IGO, and
we look forward to our current and
future work programs producing
additional value creation for all
stakeholders for many years to come.
PETER BRADFORD
MANAGING DIRECTOR
& CHIEF EXECUTIVE OFFICER
PETER BILBE
CHAIRMAN
IGO ANNUAL REPORT 2019 — 5
OUR PURPOSE
& STRATEGY
Our purpose gives meaning to what we do, beyond just
being a mining company.
Our purpose narrative gives context
to and communicates our story.
We are finding and producing
the metals that are critical to the
development of clean energy
solutions. These include nickel,
copper and cobalt, which are
increasingly being used in batteries
that power electric vehicles and
provide grid scale energy storage
as well as green energy generation
such as solar and wind power.
Power generated from these
greener sources will contribute
to decreasing carbon emissions
emitted into the air rather than
traditional non-renewable energy
sources for power.
Our purpose was co-created by
people from all across the IGO
business; from the board room
to our operations. Collectively
our people told us that making a
difference is what they want to do,
and why we all want to come to work.
Our purpose gives meaning to
what we do, beyond just being a
mining company. At IGO, we want to
make a positive contribution to the
world, not only by delivering value
to shareholders but also by making
the world a better place for future
generations to come.
IGO STRATEGY
Our strategy is to become a globally
relevant producer of materials
critical to clean energy.
Our 100% owned Nova nickel-copper-
cobalt operation is central to this
strategy. Whilst our 30% interest in the
Tropicana Operation is not, Tropicana
continues to be core to the portfolio,
delivering strong free cash flow and
potential for further growth.
To deliver on our strategy, we are
actively pursuing step-change
organic growth through our portfolio
of belt scale exploration projects
in Australia and internationally. Our
diverse in-house team has a wide
breadth of experience and expertise
firmly aligned with our strategic
focus on energy storage and
transmission metals.
IGO has established a commanding
position through our consolidation
of an extensive brownfields ground
position in the highly prospective
Fraser Range, to take advantage of
our major infrastructure investment
and advancing geological
understanding at Nova. Our
discovery portfolio also includes
belt-scale greenfield opportunities
in the Northern Territory at the
expanded Lake Mackay Project,
the 100% owned Raptor Project,
the new West Kimberley Project,
as well as the Frontier Project in
Eastern Greenland. In addition,
we have entered into a number
of strategic investments and
exploration joint ventures.
THE IGO PURPOSE
Making a Difference
We believe in a world where
people power makes amazing
things happen.
Where technology opens up new
horizons and clean energy makes
the planet a better place for every
generation to come. Our people are
bold, passionate, fearless and fun –
we are a smarter, kinder and more
innovative Company.
Our work is making fundamental
changes to the way communities all
over the world grow, prosper and stay
sustainable. Our teams are finding
and producing the specialist metals
that will make energy storage mobile,
efficient and effective enough to
make long-term improvements to
the lifestyle of hundreds of millions of
people across the globe.
How? New battery storage technology
is finally unleashing the full potential
of renewable energy by allowing
power produced from the sun, wind
and other sources to be stored and
used when and where it’s needed.
This technology will impact future
generations in ways we cannot yet
imagine, improving people’s quality of
life and changing the way we live.
We believe in a green energy future
and by delivering the metals needed
for new age batteries, we are making
it happen.
6 — IGO ANNUAL REPORT 2019
We are living our strategy through
our actions, such as endeavouring
to be proactively green and
embracing renewable energy,
innovation and technology to
reduce our carbon footprint. This
is demonstrated in the current
construction of the solar farm at
Nova, and our investigation and
development of numerous ways to
introduce electrification into our
Nova mining operation.
We are also focused on vertical
integration across the clean energy
value chain. We have ongoing
workstreams to investigate the
opportunity for IGO to have
exposure to the downstream nickel
sulphate, and potential cathode
precursor chemicals markets. This
would unlock greater value from
the metals we produce whilst also
unlocking value via the supply chain
of materials critical for clean energy.
This focus on vertical integration is
reflected in the work we commenced
in 2018 to produce nickel sulphates
directly from nickel sulphide
concentrates. The IGO Process™ is
a new and innovative concept we
have developed for producing high
quality nickel sulphate directly from
nickel sulphide concentrate, which
is more environmentally friendly,
lower cost and more efficient with
extraction rates in excess of 97% for
nickel and cobalt.
At IGO, we will continue to produce
high quality products that are made
safely, sustainably and reliably to
meet our customers’ needs; all
delivered by people who are bold,
passionate, fearless and fun.
We are a smarter, kinder, more
innovative mining company.
The IGO Strategy
Strategically focused on metals
critical to clean energy
GLOBALLY
RELEVANT
Globally relevant supplier
of metals that are critical
to energy storage and
renewable energy.
VERTICALLY
INTEGRATED
Vertically integrated
to produce battery
grade chemicals and
cathode precursors.
QUALITY
PRODUCTS
Quality products
desired by end users
made safely, ethically,
sustainably and reliably.
PROACTIVELY
GREEN
Proactively green using
renewables, energy
storage and EV mining
equipments to reduce
carbon footprint.
Delivered by people who are bold, passionate, fearless
and fun - a smarter, kinder, more innovative team.
IGO ANNUAL REPORT 2019 — 7
EXECUTIVE
LEADERSHIP
TEAM
PETER
BRADFORD
MANAGING
DIRECTOR & CHIEF
EXECUTIVE
OFFICER
KEITH
ASHBY
HEAD
OF HSEQ
& RISK
BAppSc Extractive Metallurgy, FAusIMM, MSMME
BSc (Botany)(Hons), MSc (Environmental Science)
Peter is accountable to the Board of Directors, for the day-
to-day management of the Company.
Peter was appointed Managing Director & CEO for IGO in
2014. Peter is a metallurgist and has significant experience in
operational and executive roles in Australia and internationally.
Peter is President of the Association of Mining and Exploration
Companies Inc (AMEC), Vice President of the Western
Australian Mining Club, and Chairman of the Curtin University
Brighter Futures Scholarship Program.
Keith’s role is accountable for strategic leadership and good
governance of occupational health and safety, environment,
community engagement, internal audit and risk management
within IGO.
Keith was appointed Sustainability Manager for IGO in 2015.
Keith has 25 years’ local and international experience in the
resources industry. Keith has held HSEC management positions
within WMC Resources, BHP Billiton, Zinifex, Nyrstar and
Newcrest. These included HSEC Manager, Group Environment
Manager, Approvals Manager and Resettlement Manager.
KATE
BARKER
GENERAL
COUNSEL
MATT
DUSCI
CHIEF
OPERATING
OFFICER
LLB; BA
BAppSc Geol (Hons), MAIG
Kate’s role is to provide guidance to the Company on all
legal matters. She provides direction to the Exploration and
Operational teams, legal oversight to support the Company’s
growth strategy and is directly involved in the Company’s key
stakeholder relationships and negotiations.
Matt’s role is accountable for the performance of the Nova
and Tropicana Operations. Matt is also accountable for
technical services, project development including the
Nickel Sulphate Project, technology and innovation, and
information technology.
Kate joined IGO in 2011 and was appointed General Counsel in
2017. Kate has more than 18 years’ experience as a commercial
litigator specialising in large scale resources litigation,
corporate law and native title. Kate is currently a legal member of
WA’s Mental Health Review Board and was previously the sitting
lawyer on WA Health’s Human Research Ethics Committee.
Matt joined IGO in 2014 and was appointed Chief Operating
Officer in early 2018, and prior to that was Chief Growth Officer.
Matt has 25 years’ experience in all facets of the industry
including; exploration, resource development, technical
studies, corporate development, public markets, operations,
and executive leadership. Matt has previously held senior
management positions within PMI Gold, Gold Fields and
WMC Resources. Matt has extensive global experience, having
worked extensively in Australia, South America, Africa and Asia.
8 — IGO ANNUAL REPORT 2019
ANDREW
EDDOWES
HEAD OF
CORPORATE
DEVELOPMENT
JOANNE
MCDONALD
COMPANY
SECRETARY AND
HEAD OF CORPORATE
AFFAIRS
B.Sc (Earth Science)(Hons), MAUSIMM, FGeolSoc
MSc (Corporate Governance), MSc (Professional Accounting), FGIA, GAICD
Andrew’s role is accountable for the growth of the IGO
portfolio through partnering, acquisition and divestment
of advanced assets aligned with the Company strategy.
Andrew’s role also includes the leadership and oversight of
IGO’s Investor Relations activities.
Andrew joined IGO in 2003 and has held a number of senior
roles in Exploration, Investor Relations and New Business.
In February 2018, Andrew was appointed Head of Corporate
Development. Andrew is a geologist with over 20 years’
experience in the exploration and mining industry. He has
worked on major projects within Australia and internationally,
with his experience extending from project generation to mine
development in a variety of technical and corporate roles.
Joanne’s role is to manage and support the business of
the Board as well as advising and implementing good
governance practices across the organisation. Joanne also
manages IGO’s relationships with its stakeholders which
includes communications and the Corporate Giving Program.
Joanne joined IGO in 2015 as Company Secretary and in July
2018 was also appointed Head of Corporate Affairs. Joanne has
over 16 years’ experience as a company secretarial professional
working for listed companies in Australia and the UK. Prior to
joining IGO, Joanne held positions with Paladin Energy Ltd,
Summit Resources Ltd and Unilever plc. Joanne is currently a
WA State Councillor for the Governance Institute of Australia.
SAM
RETALLACK
HEAD OF
PEOPLE
& CULTURE
IAN
SANDL
GENERAL
MANAGER –
EXPLORATION
Dip App Science, B. Health Science, CAHRI, GAICD
BSc (Geology, Geophysics) (Hons)
Sam’s role is to provide leadership and oversight of all
People and Culture activities, including diversity, equity and
inclusion initiatives, learning and talent development and
reinforcing the organisation’s culture, purpose and values.
Ian’s role is to lead and develop a best-in-class exploration
team, driving technical and operational excellence, and
ensuring an enduring high-quality pipeline of projects to
deliver material discoveries to IGO.
Sam joined IGO in 2013 as Human Resources Manager and was
appointed Head of People & Culture in 2017. Sam has over 25
years’ experience in senior management, human resources,
consulting and operational roles working for a range of
organisations. Prior to joining IGO, Sam led large workforce-
based businesses within Aherns Department Stores and Ansett
Airlines, before turning to roles in Human Resource management
across the mining, finance, legal and biomedical sectors.
Ian joined IGO in 2017 as General Manager – Exploration. Ian
has 30 years’ experience in mineral exploration and associated
geoscience, including near-mine and greenfields exploration
for a wide range of commodities. He has previously held senior
management and technical positions within Teck Resources,
BHP Minerals and Geo Discovery Group, and Ian also has
significant international experience having worked across
Australia, Africa and Asia.
SCOTT
STEINKRUG
CHIEF
FINANCIAL
OFFICER
C.A. B.Comm, BSc., GAICD
Scott’s role includes responsibility for statutory financial
compliance and reporting, taxation, treasury, budgeting and
forecasting, sales and marketing, and Group procurement.
Scott joined IGO in 2011 as Chief Financial Officer. Scott is a
Chartered Accountant having gained over 20 years’ experience
in the resources industry with Rio Tinto, Sons of Gwalia, Perilya
and Consolidated Minerals. Positions held over this period
include Chief Financial Officer, Manager - Treasury & Finance,
and Financial Controller.
IGO ANNUAL REPORT 2019 — 9
OUR
PEOPLE
AT A GLANCE
IGO remains a proud Western Australian employer and
we work hard to be a partner and employer of choice
to all our stakeholders, believing that this can only be
achieved with a collaborative approach.
ENGAGEMENT SURVEY
ENGAGEMENT
15%
increase in overall employee
engagement from 2018
(overall score 70%).
90%
said IGO has a work environment
accepting of diverse backgrounds.
86%
indicated that they are proud
to work for IGO.
IMPROVED GENDER DIVERSITY
27%
of internal promotions
to female candidates.
60%
of manager promotions
to female candidates.
38.5%
of FY20 graduates recruited
are female.
10 — IGO ANNUAL REPORT 2019
In FY19, we conducted our third
Company-wide annual employee
engagement survey with a response
rate of 83%. This is a strong result
and one that demonstrates that our
continued focus on connection and
culture has created a workforce
that wants to be actively involved in
shaping our culture and business as
we continue to evolve.
Our overall engagement score this
year was 70%, which represents
a significant year-on-year
improvement and puts IGO at the
upper end of scores achieved by
other companies surveyed by this
year’s provider, Blue Provident.
This result, along with the specific
feedback received from our people
about business wide programs
currently in progress, tells us that:
• Pride in IGO - 86% of our people
are proud to work for IGO,
an 11% improvement;
• Motivation - 71% of our people are
motivated to go the “extra mile”,
a 19% improvement; and
• Career intentions - 82% of our
people plan to stay with IGO,
a 12% improvement.
These results are the outcome of
our programs over the last couple
of years to co-create a shared and
inspiring Purpose. This effort has
improved the connection that our
employees have with the business
and the satisfaction and that they
derive from the work that they do to
create our future.
LEARNING AND
DEVELOPMENT
Teams of great people don’t just
happen, they require nurturing
and development, both at an
individual and a group level. The
development of our people and
the benefits that development can
deliver to both the business and
the individual depends on a shared
responsibility for lifelong learning.
Our learning and development
program assumes all IGO people
can be leaders of the IGO Way. Our
program provides job-specific
and career development training
opportunities that include technical
skill development, teamwork and
collaboration opportunities for
leadership development. This year
we have increased our energy in
this area with the continuation of a
number of existing programs and
the introduction of some
new initiatives.
IGO Mentoring Program
In FY19, we were pleased to begin
a partnership with Metisphere to
implement an internal mentoring
program designed around
leadership development and cross-
divisional connection. Open to all
employees, 18 pairs of mentors and
mentees began a journey in May
2019 to explore career opportunities
and aspirations and provide the
basis for the mentee’s development
planning for FY20. To date, the
feedback has been exceptional with
participants excited about what
they can achieve with our shared
investment in their future.
Support for the future
Our support for two co-sponsored
WA Mining Club scholarships for
Geology and Indigenous students,
along with mentoring and vacation
work for these students, continued
this year. This provides students
who need support to study and
enter our industry the benefit of
the IGO network. IGO is also
very proud to support a number
of initiatives to encourage and
foster the development of the next
generation of leaders within our
mining sector including;
• Women in Mining WA mentoring
program and networking events;
• professional associations
including AusIMM, AMEC and the
WA Mining Club; and
• tertiary, vocational and school
institutions including WA School
of Mines, Curtin University,
University of WA, TAFE WA and a
number of primary and secondary
schools in our catchment areas.
This year we also partnered with
the CoRE Learning Foundation in
another way to show our support
for STEM learning development.
Since 2005, the foundation and
vision of CoRE has been based on a
simple idea; an idea that education,
industry and government need to
connect and work collaboratively
to provide relevant and purposeful
education pathways into the
resources industry.
IGO shares this belief and supports
CoRE’s focus on providing
students with meaningful career
development, facilitating a number
of site visits and support for
Professor Lisa Harvey-Smith’s tour
of the Goldfields.
Our Graduate and Vacation
Programs have gone from strength
to strength with a total of 13 first,
second and third year graduates
working amongst our workforce
during FY19. Our Graduate Program
offers university graduates a two to
three year program commencing in
January each year, with the aim of
supporting them in their transition
from study to career. In 2020, we will
have 24 students within the program;
a program designed to support,
challenge and reward graduates in a
work environment that will foster and
develop them into future leaders and
technical experts. It is this support
that will create a bright future for the
mining industry.
EMPOWERMENT AND
OWNERSHIP
At IGO, we believe all employees
should have the opportunity to be
owners of the IGO business and
share in the collective wealth that
we create for our shareholders. We
also believe that empowerment is
key to motivation and the ability
to gain satisfaction from the
work we do. The importance of
this statement is reflected in our
2019 engagement survey results
where “having the freedom to do
your role in the way you want to”
rated the sixth most important
factor for people’s motivation,
after, (i) work/life balance, (ii)
learning & development, (iii)
good relationships, (iv) career
development opportunities, and (v)
having a sense of purpose. Given
the importance of empowerment
to our motivation, our engagement
survey results provide some
great insights and show pleasing
progress on how we feel about
empowerment at IGO including:
Kyle (left) with Peter Bradford
at the IGO Awards.
CASE STUDY:
KYLE HODGES
Following the acquisition of Sirius
Resources in September 2015,
Kyle transitioned from Sirius to
IGO as an Exploration Geologist.
He has played an important role
in integrating the data, property
and general history of the
discovery, resource delineation and
development of the Nova-Bollinger
deposit. Kyle spent a year and a
half working on the Fraser Range
Project before transitioning to a
Project Exploration Geologist role
at the Jaguar Operation where he
was responsible for all aspects
of its exploration and project
management.
In mid-2018, Kyle expressed
an interest in developing his
geology skills further through
a secondment to our Nova
Operation. Kyle was successful
in securing the secondment
and worked as a Mine Geologist
for nine months at Nova before
returning to exploration, this time
promoted to a Senior Project
Geologist to lead the West
Kimberley Exploration Project.
Kyle is married to Amy and is the
father of two children, Jackson
(2 years) and Amelia (2 months),
balancing his role at IGO with
raising a young family. Along with
his career progression and the
flexibility required to blend work
and family, IGO is also supporting
Kyle through a Masters of Economic
Geology degree at the University
of Tasmania in which he continues
to maintain an impressive high
distinction average.
Kyle is recognised at IGO for
his technical excellence as well
as his personable and humble
character and was awarded the
2018 IGO Award for Excellence in
Geoscience. It is people like Kyle
who truly make a difference at IGO.
IGO ANNUAL REPORT 2019 — 11
OUR PEOPLE CONT.
IGO graduates at work at Nova.
• 88% said that they had the
• 90% of people surveyed in our
• release of our Flexible Work
engagement survey said that IGO
has a work environment that is
accepting of diverse backgrounds
and ways of thinking; and
• 93% of people surveyed said that
they feel that IGO values diversity
(age, gender, ethnicity, language,
education qualifications, ideas
and perspectives).
Gender Balance
IGO actively supports improvements
to the industry’s gender ratio
by seeking to find innovative
ways to attract and retain female
representation into both the mining
industry and our business.
In FY19, the Company has made
continued progress in the
implementation of initiatives
designed to improve the diversity
and inclusion of succession
planning and retention. Key
highlights for FY19 include:
• the award of 27% of internal
promotions to female candidates,
along with 60% of manager
promotions to female candidates;
• achievement of an improved
gender diversity balance for new
graduates recruited for FY20 of
which 38.5% were female;
• successful school holiday care
trial program for employees with
young children in the Perth office;
• a positive response to our newly
implemented Paid Parental Leave
Standard which had 7 participants
in FY19, the majority (85%) of
whom were male;
Standard and expanded flexible
working options in the Perth
office and explored opportunities
for further roll out on remote
sites; and
• achievement of a 21%
improvement on diversity and
inclusion question ratings in the
annual engagement survey.
In spite of the many challenges
to achieving a year-on-
year improvement to female
representation across the
business, in FY19, the Company
has maintained a gender balance
that is better than many mining
industry employers, largely due
to recruitment campaigns into
traditionally male dominated roles
(Exploration and Processing).
Our latest Gender Equality
Report for FY19, lodged with the
Workplace Gender Equality Agency,
successfully achieved a notice of
compliance for the seventh year in
a row. This report can be found on
our website (www.igo.com.au) and
you are welcome to comment on the
report by emailing igofurther@igo.
com.au
FEMALE REPRESENTATION
FY18
Board
14%
FY19
14%
Senior Executive roles*
14.3%
33.1%
All management and professional roles
28.5%
24.5%
Total workforce
31%
25%
flexibility to choose how to best
complete their work (14% better
than 2018);
• 84% said that at work, their ideas
and opinions count (22% better
than 2018); and
• 80% said they had the right tools
and technology to do their job
(23% better than 2018).
We believe that our efforts and
continued focus in this area
are making a difference to the
connection that our employees have
to our business and our strategic
objectives and is a key aspect in
making IGO a great place to work.
DIVERSITY AND INCLUSION
IGO recognises the value of
diversity and inclusion and the
impact this has on the working
environment, organisational
capability, performance and the
creation of sustainable shareholder
value. We strive to apply fair and
equitable employment practices
and provide a working environment
that encourages all employees to
reach their full potential. Diversity is
also important to ensure that IGO is
representative of the communities in
which we live and work. We value the
diverse backgrounds, skills, talents
and perspectives of our people.
Achieving a diverse and inclusive
community is a journey. In FY19, the
difference that we are making and
our achievements to date are evident
from what our people told us:
12 — IGO ANNUAL REPORT 2019
Subsequent to year-end, the Board
has progressed the appointment
of an additional female non-
executive director to the Board
and we look forward to making an
official announcement regarding this
appointment shortly.
Aboriginal Employment
In FY19, we continued to actively
support the employment of both
Aboriginal people and people from
culturally and linguistically diverse
backgrounds across the business.
Whilst it has been a challenging
year in terms of increasing
Aboriginal representation in our
business, we have had some
pleasing results with our existing
programs and people including:
• maintaining Aboriginal
employment at approximately
3% of direct employees;
• Aboriginal employees collectively
recording the highest
engagement score across the
business;
• implementation of a number of
additional Ngadju Traineeships;
and
• continued enhancement of our
Ngadju cultural competency
workshops.
Implementation of a broader
Diversity and Inclusion program in
FY20, including the market facing
promotion of IGO programs and
initiatives and a continued focus
on internal culturing initiatives, is
expected to result in continued
improvements in the diversity and
inclusion of all IGO people.
Family and Domestic Violence
Leave
Every year we continue to seek ways
in which to support our employees
and their families and in FY19,
we introduced the opportunity
for our people to take up to five
days of paid Family and Domestic
Violence Leave if they are affected
by family and domestic violence.
This leave is open to all employees
including part-time, fixed-term and
casual employees and is designed
to ensure that our people are
supported through challenging
times without loss of earnings.
WELLNESS AND WELLBEING
At IGO, we encourage our
people to actively pursue better
physical health and wellbeing. In
FY19, our programs continued
to offer our people a range of
choices to support pro-active,
but individually relevant health
options. Along with our programs
for physical health monitoring
(IGO Natural Therapies Expo, skin
checks, FluVax, Riva Nutrition
Health challenge, yoga and pilates
classes) we have increased our
efforts in programs that encourage
fun and social interaction. These
included Nova and Perth social
club activities and opportunities
to be part of community and
volunteering programs to increase a
sense of connection and belonging,
such as Euroz Big Walk, HBF Run
for a Reason and Red25 blood
donation group.
CELEBRATING SUCCESS
A strong culture is founded on the
ability to recognise excellence and
celebrate a “job done well”. Along
with the many business unit-based
recognition events that we encourage
our people to hold throughout the
year, in FY19 we found two more
great ways to celebrate individual
and team success.
IGO ‘Making a Difference’
Awards
The IGO Awards were established
in 2017 to celebrate exceptional
contributions by individuals
and teams at IGO. In addition to
demonstrating passion, thought
leadership and excellence, past
winners have gone above and
beyond the requirements of
their role to make significant
contributions. In 2019, we
reimagined the IGO Awards to align
with our purpose and to encourage
the behaviours and outcomes that
support this. The 2019 IGO Making
a Difference Awards recognised
and celebrated exceptional people
in the business who exemplify the
IGO culture. These are the people
who are making a difference
and who inspire us and our
broader community through their
achievements.
Service Awards
In FY19, we introduced a new
Service Recognition Program
to celebrate the long-term
commitment of IGO employees.
The program is structured to
formally celebrate length of service
at a number of key milestones
and provides the Company with
another opportunity to celebrate
our people’s accomplishments and
performance over their journey with
us. This dedicated commitment
is appreciated at IGO and we say
“Thank you” to them all.
Carolyn Marks, Electrical Engineer, Nova
Operation, with her husband Ingo and
daughter Anneliese.
CASE STUDY:
CAROLYN MARKS
Carolyn Marks was working a
full-time 8:6 roster at our Nova
Operation as an Electrical Engineer
when she became pregnant with
her first child. Following the birth
of her child, it was important to
Carolyn that she continued to
develop professionally along with
ensuring she had valuable time
with her family.
When considering her return
to work on a full-time basis,
Carolyn’s previous experience in
her site-based role confirmed to
her the value of site time in her
role. In order to try and get the
best balance, Carolyn approached
her supervisor with the suggestion
that she start her transition back
to work after parental leave
working one day per week. This
work was performed both from the
Perth office and on site at Nova
as required and provided Carolyn
with time to transition back to
work. After two months she was
back to full-time work.
Full-time work for Carolyn now
looks a lot different to before
she took parental leave, working
flexibly to suit her requirements. It
was important to Carolyn that she
was professionally able to deliver
projects that make a difference
to people’s lives on site while also
being able to spend time with her
family. With her supervisor’s full
support, Carolyn’s work roster is
two days at home and two days on
site per week. This roster provides
her with the time she needs with
her two families – her immediate
family and her Nova family. In
Carolyn’s words it “allows her to
be both an engineer and a mum”.
Nova is proud to be able to help
Carolyn to make a difference.
IGO ANNUAL REPORT 2019 — 13
OUR SAFETY
PERFORMANCE
AT A GLANCE
REDUCED LTIFR
1.37
LTIFR
Lost Time Injury Frequency Rate per
million hours worked, down from
2.39 in FY18.
EMPLOYEE SAFETY
No fatalities or serious injuries for
IGO employees or our contractors.
REDUCED TRIFR
9.58
TRIFR
IGO’s Total Reportable Injury
Frequency Rate, down from 19.14
in FY18.
REDUCING POTENTIAL INCIDENTS
continues to be a key focus for the
Company in FY20.
14 — IGO ANNUAL REPORT 2019
IGO accepts our moral responsibility to provide a safe
place of work, a safe system of work and a positive
safety culture.
Results
IGO had no fatalities or serious
injuries during FY19.
Our people, a term we use in
reference to both IGO employees
and contractors, suffered a total
of two lost time injuries, three
medically treated injuries and 12
restricted work injuries.
IGO acknowledges that beyond
injuries, ‘near-miss’ incidents
can have a wider impact causing
distress not only to the affected
individual, but also to their
families and workmates. In FY19,
IGO experienced five ‘near-miss’
incidents where there was the
credible potential for a fatality.
Although each of these events
resulted in no injury or only a minor
injury, the potential outcomes
were recognised, and subsequent
adjustments made to our business
processes and practices to mitigate
risks and minimise exposure to
these hazards for the future.
In FY19, IGO’s Lost Time Injury
Frequency rate (LTIFR) per million
hours worked was 1.37. IGO’s Lost
Time Injury (LTI) results for FY19
compare favorably to the most
recently published averages for the
Western Australian nickel mining
sector (1.9) and metalliferous
underground mining sector (1.9)1.
Our Medically Treated Injury
Frequency rate (MTIFR) per million
hours worked was 2.05, and our
Restricted Work Injury Frequency
rate (RWIFR) per million hours
worked was 8.22. IGO’s Total
Reportable Injury Frequency Rate
(TRIFR)2 for FY19 was 9.58.
Reducing the number of actual and
potential incidents will continue to
be a key focus in FY20.
IGO’s Safety Philosophy
Being an operator in the mining
industry inherently brings with
it risks due to the nature of our
work. At IGO, our intention is, as a
business and as individuals, only
to take risks in a considered way.
This means we do not accept any
risk where there is any elevated
potential for seriously harming
someone or for a fatality to
occur. However, it is unrealistic
to suggest that we can offer a
hazard-free work environment.
Rather, we maintain an expectation
of continuous improvement in the
safety of our work places and the
efficacy of our safety systems,
and the creation of a culture that
reflects real care for the safety and
wellbeing of our people.
At IGO, a safe place of work is
a place where the hazards are
recognised and the risks posed by
1 Department of Mines, Industry Regulation and Safety, 2019, Safety performance in the Western
Australian mineral industry — accident and injury statistics 2017-18: Department of Mines,
Industry Regulation and Safety, Western Australia.
2
IGO uses a definition of Total Reportable Injury based on section 76 of the Western Australian
Mines Safety and Inspection Act 1994 which requires that an accident be reported if it causes an
injury that prevents a person from returning to his or her duties as they were being performed at
the time of the accident. It applies where the person injured has lost time from work, been
assigned to alternate or light duties, or been put on restricted hours.
these hazards are managed. A safe
system of work encompasses the
policies, standards, processes and
procedures that provide direction
and guidance on how the work is to
be done. A positive safety culture
is the accepted behaviours and
responses that our employees have
to hazards and associated risks
when the “boss is not watching”.
A positive safety culture is achieved
when our people:
• believe their manager or
supervisor is concerned about
their safety and wellbeing;
• pro-actively look out for others
and feel concern for their safety
and wellbeing;
• participate in the development of
our safety standards, processes
and procedures;
• adhere to IGO’s safety processes
on the understanding that they
will assist in keeping them and
their workmates safe whilst never
being seen as a substitute for
thinking for one’s self; and
• have the courage to speak up or
intervene in unsafe situations or if
someone is at risk.
At IGO, we are actively creating a
positive safety culture. This effort is
informed by the belief that culture
is the product of the attitudes
and behaviours demonstrated by
IGO leaders; from the front-line
supervisor to the CEO. IGO’s safety
program is known as Visual Safety
Leadership (VSL).
The purpose of the program is to
educate and guide our leaders, at
all levels, so they:
• understand both IGO’s safety
philosophy and their statutory
safety obligations;
• allocate time for the sole purpose
of checking on or promoting
workplace safety and employee
welfare; and
• follow up on concerns or identified
hazards raised by employees and
provide feedback on how they
have responded.
Safety leadership must be visual.
It must be seen. It must be felt.
If we do this well, it is our firm
conviction that we will create a
better workplace.
An Improving Safety Culture
In FY19, we undertook an
engagement survey of our entire
workforce and a safety culture
survey of our Nova workforce. The
positive results revealed that our
people feel supported by their
supervisors and management
and are empowered to take
responsibility for their own safety,
and that of their workmates in
terms of both hazard management
and making improvements to
safety systems.
Over the past 12 months we have
seen an improved culture, as
assessed by our people. Beyond
the positives, the surveys also
revealed many further opportunities
for improvement; with the most
significant being the need for a
more timely response to rectifying
hazards and system deficiencies.
In FY20, IGO will continue to pursue
improvements in this area, including
increased internal communications
among our employees, suppliers
and contractors to continue to build
awareness and influence behaviours.
For further information on IGO’s
safety performance and safety
programs, please refer to the 2019
Sustainability Report, which will be
released in October 2019.
Exploration team working in field
CASE STUDY:
WORKING TOWARDS
A SAFE DISCOVERY
The pursuit of new resources takes
IGO’s exploration team to diverse
geographies and environments
– from remote parts of Australia
to new arctic frontiers in East
Greenland. With a growing number
of people working in smaller
exploration teams, often in isolation
for lengthy periods at a time, we
need to ensure our teams are well
equipped to manage the specific
conditions. Equally, it is vital that our
teams are ‘equipped’ with the right
culture; a culture of empowerment
and a culture in which ‘getting
the job done’ is balanced by a
demonstrable care for the safety
and wellbeing of one another.
Empowering our exploration teams
to own both their personal and team
safety is the primary focus for Ross
Jennings, HSE Manager Exploration.
“It is simple. Any discovery marred
by serious injury or incident is not
a successful discovery. For us, a
safely performed discovery is a
successful discovery”, says Ross.
“Everybody is entitled to a safe
work place and to be part of a
team in which anyone can speak up
when things aren’t right. I’ve seen
what happens when this doesn’t
happen. It’s about teamwork,
empowering individuals to own
their responsibilities and being
comfortable making decisions.”
We are deliberate in our efforts
to shape culture. This starts with
choosing the right leaders, people
who are concerned with the safety
and wellbeing of their people, and
then fostering an environment that
encourages people to consider the
challenges and hazards that may
be encountered, and how these
are best managed. To this end,
each exploration team comprises a
mix of both new and experienced
IGO employees to help transfer
knowledge, skills and experience.
IGO ANNUAL REPORT 2019 — 15
MAKING A
DIFFERENCE
Making a Difference is our reason for being, our purpose.
Every single person in our business has made a difference
this year.
IGO is proud of its Corporate Giving
program and how our people have
each made a difference to the
organisations we support. These
activities give our employees a sense of
pride and demonstrate IGO's genuine
commitment to the community.
We have a publicly stated and Board
approved position on philanthropy as
defined in the IGO Corporate Giving
Standard (www.igo.com.au/site/
caring/community). This Standard
for FY19 defined a budget allocation
of 0.06% of the previous year’s total
revenue. The Standard also defines
target beneficiaries, being primarily
charities and schools in our host
communities. For FY20 the budget
allocation has been increased to
0.075% of total revenue.
In FY19, IGO’s Corporate Giving
program made a difference to over
46 organisations and programs,
with total payments of $478,606. In
addition, many IGO employees took
advantage of IGO’s Volunteer Leave
Allowance that provides employees
with up to two days paid leave per
annum to assist with charitable
causes. IGO employees are also able
to make personal donations via IGO’s
online workplace giving platform
Good2Give where the Company
will match the donation as per the
Corporate Giving Standard.
Details on some of the organisations
and programs IGO has supported in
FY19 are detailed here.
Teach Learn Grow
IGO has been supporting Teach
Learn Grow (TLG) for over five years
and continued its support with the
2018 Rural Tutoring Program. The
program sees university students
volunteer their time to tutor in
remote schools. The program has
had a hugely positive impact on the
communities living in close proximity
to our mine sites and we look
forward to continuing to work with
TLG in FY20 to improve educational
outcomes for children in remote
Western Australia. The schools visited
during the program were Leonora
District High School, Nulsen Primary
School, East Kalgoorlie Primary
School, Coolgardie Primary School
and Norseman District High School.
Norseman District High School
Scitech delivered three all-staff
professional learning workshops
at Norseman District High School
during the year, allowing teachers
to develop an understanding of
how to use the digital technologies
and similar resources provided to
them. Critical to the facilitation of
all the workshops at Norseman DHS
and Scitech’s ongoing provision of
professional learning around WA,
were the IGO funded iPads.
Esperance Senior High School
In December 2018, IGO ran a
Work Experience Program at its
Nova Operation for six Year-10
students to experience working
life on an operating mine site. The
program provided a real hands-on
experience, with the students and
teachers living on site and working
12-hour shifts with mentors from
the Mining, Environmental and
Engineering departments.
AT A GLANCE
OPERATION OZHARVEST
42
IGO employee volunteers assisted
OzHarvest.
111,549kg
of surplus produce was distributed to
80 charitable agencies across Perth.
UP ALL NIGHT
11
IGO employees walked 42km for
Ronald McDonald House Perth.
$23,478
was raised for Ronald McDonald
House Perth.
IGO CORPORATE GIVING
46
number of organisations or
programs IGO made donations
to in FY19.
$478,606
Corporate Giving spend for FY19.
16 — IGO ANNUAL REPORT 2019
Signing ceremony for Dandjoo Darbalung Program
towards school work and, for some
students, it is the only time they will
do school work or spend time with an
adult helping with their school work,
outside of regular school hours.
Up All Night
In December 2018, a team of 11 IGO
employees walked a massive 42km for
the inaugural ‘Up All Night’ overnight
marathon for Ronald McDonald House
Charities. IGO collectively raised
$23,478 and IGO’s CEO & Managing
Director, Peter Bradford was the
second highest ranked individual
fundraiser overall – raising $7,500 on
his own. The event itself raised over
$730,000, with 9,919 individual donors.
IGO are proud to announce we are the
major sponsor for the November 2019
‘Up All Night’ event, hoping to build
on the success of 2018.
OzHarvest
In November 2018, IGO participated
in a month-long volunteer program,
Operation OzHarvest. OzHarvest
is a for-impact organisation with
a driving purpose to Nourish Our
Country. It began with a simple
concept to rescue good food that
would otherwise go to waste and
deliver it to charities who feed
vulnerable men, women and children
in need. IGO’s contribution for the
month helped with an incredible
111,549 kilograms of surplus produce
being distributed to over 80
charitable agencies across Perth and
the greater metropolitan area. IGO
also created 51 food hampers which
were donated to the vendors at The
Big Issue, who support those that are
disadvantaged and are experiencing
homelessness. A total of 22 IGO
volunteers also helped provide 150
meals to Emmaus, a homeless service
provider for those with mental illness.
This is a great example of making
a difference and being proud to be
part of IGO.
Dandjoo Darbalung Program at
St Catherine’s College
IGO proudly partnered with
AngloGold Ashanti Australia,
Barminco and Sandfire Resources
to support 100 Indigenous students
complete the Dandjoo Darbalung
program at St Catherine’s College.
Each company has made an
investment in the program of $45,000
over three years, which together will
make a huge difference. Dandjoo
Darbalung is a high calibre wrap-
around residential program for
Indigenous students to succeed
at graduating with a qualification
at a tertiary level across all five
universities in Western Australia.
Esperance Girls Academy
The Girls Academy is the leading
provider of school-based engagement
programs for Aboriginal and Torres
Strait Islander girls in Australia, with
the aim of more girls graduating from
secondary school and transitioning
successfully to their planned career
pathway, and IGO is proud to continue
its support of the program at
Esperance Senior High School.
Ronald McDonald House Perth
IGO continued it sponsorship during
the year of a room in the Ronald
McDonald House. These rooms give
families with sick kids the gift of
togetherness and keep them near the
care and resources they need to thrive.
Esperance Senior High School
In June 2019, IGO sponsored ‘Winning
in Overtime’, which is an afterschool
student tuition program designed
to help students with homework
and study. The program is staffed
by a range of volunteers including
parents, teachers, Clontarf Academy
staff, year 11 and 12 students and
the Girls Academy staff. Winning in
Overtime fosters a positive attitude
Peter Christen and daughter Olivia Christen
and her friend Clementine Evans
CASE STUDY:
BOATING FOR BRAINS
On 7 November 2018, a group
of 22 parents and friends of
children who have received life
changing treatment from The Royal
Children’s Hospital Neurology team
attempted to set a new Guinness
World Record by paddling a dragon
boat 600kms in four days along the
Murray River from Yarrawong to
Swan Hill. They did so with the aim
of raising over $200,000 to support
the hospital’s neuroimaging
service, which plays a vital role
in supporting the diagnosis,
treatment and surgical outcomes of
Victoria’s sickest children.
Peter Christen, our previous Mining
Manager at our Nova Operation,
was inspired to participate by
his daughter Olivia Christen and
her friend Clementine Evans, two
young children afflicted by epilepsy,
who were granted new leases of life
thanks to life changing surgery and
the work of the Neurology team at
the Royal Children’s Hospital (RCH).
The event was a record-breaking
success, raising an incredible
$264,000 for the Neurology
Department at RCH and saw
them enter the record books
paddling 576km on their journey.
Over $15,000 was raised from
IGO employees and contractors,
contributing through IGO’s
Corporate Giving Good2Give
Program, with IGO matching
employee donations as per its
Corporate Giving Standard.
IGO ANNUAL REPORT 2019 — 17
SUSTAINABILITY
At IGO, we care about doing what is right – not just
because it is good for business but because it is the
right thing to do.
SUSTAINABILITY
OUR COMMUNITIES
‘What does it mean to be a
sustainable mining company?’ This is
frequently asked with the contextual
inference that mining is inherently
unsustainable, because ore bodies
are, by definition, finite resources.
The legitimacy of the ‘sustainable
mining’ concept remains a live
debate because unfortunately some
industry players still operate with
environmentally destructive practices
and do not encourage capacity
building such as social and economic
growth for their host communities.
IGO's purpose of making a
difference recognises that the
sustainability of our business is
dependent on garnering support
by all of our stakeholders, including
our employees, local communities,
regulators, Traditional Owners and
shareholders.
Today, an increasing number of
investors are interested in not
only our financial and operational
performance, but also on how we
conduct our business and whether
we do this in a sustainable and
ethical way.
This is increasingly scrutinised by
ratings agencies as part of their
environment, social and governance
(ESG) index scoring evaluations.
Currently IGO actively engages
with three agencies: Institutional
Shareholder Services Inc. (ISS), Dow
Jones and the CDP (formerly the
Carbon Disclosure Project).
Beyond our people and our investors,
a sustainable mining company is
dependent on a ‘social licence to
operate’; in essence, the support
of the community. IGO continues to
work hard to maintain our licence and
to understand the matters that are
material to our stakeholders.
In FY19, our community consultation
and engagement efforts included
the completion of a Social Impact
Assessment study related to our
activities at our Nova Operation
and exploration in the Fraser
Range. The process included
public meetings, a survey of key
stakeholders and numerous one-
on-one meetings between IGO
representatives and members of
the community. As an outcome, IGO
now has a clearer understanding
of both our economic contribution
to the broader community, and
the community’s expectations
regarding the way we operate. We
will provide more information on
the outcomes in IGO’s 2019 Annual
Sustainability Report.
As in previous years, IGO has
participated in ongoing programs
to engage the Ngadju people,
the native title holders of the land
on which our Nova Operation sits
and a key area of focus for our
exploration activities.
IGO is pleased to note that in
FY19, we made production royalty
payments to the NNTAC totaling
$3,336,905, facilitated or funded
numerous training and educational
programs, and created real
employment opportunities.
AT A GLANCE
ROYALTY PAYMENTS
$3.3 million
in production royalty payments
to the Ngadju Native Title
Aboriginal Corporation (NNTAC).
POSITIVE RESULTS
from the IGO Social Impact
Assessment study following over
300 responses from stakeholders in
our host communities in Norseman
and Esperance.
137
ha
of rehabilitated exploration tracks
ZERO
material environmental spills
18 — IGO ANNUAL REPORT 2019
introduction of pest species,
the potential for the accidental
disturbance of ethnographic sites
of significance, soil disturbance,
and prompt remediation once
access is no longer required.
So, what does it mean to be a
sustainable mining company? IGO’s
answer is addressed in our purpose;
the way in which the mineral
resources we explore for, find and
develop are used and reused.
This is the very definition of
sustainable development:
development that meets the needs
of the present without compromising
the ability of future generations to
meet their own needs.
For more information on our
sustainability performance please
see our Sustainability Reports that
can be found on our website
www.igo.com.au.
In FY18, IGO ceased mining at
the Long Operation after 16 years
of operation, placing the mine
into care and maintenance. IGO is
proud of both the way we assisted
those employees who lost jobs
as a consequence of the mine
closure and our consultation with
the affected host community in
Kambalda. We are also proud of
the environmental clean-up and
remedial works completed prior to
the sale of the Long Operation to
Mincor Resources NL.
ENVIRONMENTAL
MANAGEMENT
Whilst IGO’s environmental
impacts are relatively minor, we
have an ongoing commitment to
making a real but proportionate
contribution to addressing
the world’s most pressing
environmental challenges: e.g.
global warming, biodiversity loss,
deforestation, water pollution,
soil loss or degradation and
waste management.
Currently IGO’s single largest
environmental impact is land clearing.
Given the current and foreseeable
technologies required for
exploration, IGO, like other explorers,
needs to physically get onto land
to explore by means of on-ground
electromagnetic surveys, seismic
surveys, surface soil sampling and
drilling. Invariably this requires
the creation of cleared tracks for
the passage of vehicles. Whilst the
need for these tracks is temporary,
vegetation is invariably removed.
To minimise the impact of our
activities we actively plan the work
in consultation with other land
owners (e.g. Traditional Owners or
pastoralists), with regard to the
flora and fauna likely to be affected,
the potential for the accidental
IGO topsoil stockpile
CASE STUDY:
UNDERSTANDING
THE HEALTH OF OUR
TOPSOIL
The effectiveness of mine site
rehabilitation is dependant on
the quantity and quality of the top
soil available to be placed onto
post-mining land forms. This soil
is typically sourced during the
pre-mining activities wherein it is
stripped from mining areas and
stockpiled for later use. While
it is common to have enough
topsoil at the end of mine life for
rehabilitation works, the quality is
often poor. As any good gardener
will tell you, soil is so much
more than its insoluble mineral
constituents. Good soils are high
in organic matter, nutrients, seed
and critically, soil microbes. A
variety of factors affect the quality
of stored topsoil, including the
size and depth of stockpiles,
duration of storage, soil type,
climate and method of storage.
In January 2019, IGO commenced
participation in a study led by
Dr Haylee D’Agui with the ARC
Centre for Mine Site Restoration
(CMSR) from Curtin University.
The aim of this research is to
determine how the diversity,
abundance and activity of
soil microbes within topsoil
stockpiles is influenced by
factors such as storage time. The
Nova Operation is one of seven
mines that will contribute data
to inform the development of
topsoil management guidelines
that will improve mine site
restoration outcomes.
Keith Ashby, IGO’s Head of SHEQ
& Risk highlights, “It is important
that we support scientific research
into the management of topsoils
specifically, and in mine site
rehabilitation generally. Doing
this well will safeguard both IGO’s
future licence to operate and
contribute to that of the industry.”
IGO ANNUAL REPORT 2019 — 19
OPERATIONAL
SCORECARD
AND OUTLOOK
MINING
OPERATION
UNITS
FY19
GUIDANCE RANGE
FY19
ACTUAL
FY20
GUIDANCE RANGE
NOVA
Nickel in concentrate
Copper in concentrate
Cobalt in concentrate
Cash cost (payable)
27,000 to 30,000
30,708
27,000 to 30,000
11,000 to 12,500
13,693
11,000 to 12,500
t
t
t
850 to 950
1,090
A$/Ib Ni
1.65 to 2.00
2.07
11.2
23.0
850 to 950
2.00 to 2.50
24 to 26
6 to 8
Sustaining & improvement capex
Development capex
A$M
A$M
21 to 24
25 to 28
TROPICANA (IGO 30%)
Gold produced (100% basis)
oz 500,000 to 550,000 518,172 450,000 to 500,000
Gold sold (IGO’s 30% share)
oz
150,000 to 165,000 154,402
135,000 to 150,000
Cash cost
All-in Sustaining Costs
Sustaining & improvement capex (30%)
Capitalised waste stripping (30%)
Underground capex (30%)
A$/oz Au
A$/oz Au
A$M
A$M
A$M
635 to 705
890 to 980
21 to 24
32 to 36
-
680
951
15.5
36.1
2.0
700 to 780
1,090 to 1,210
13 to 15
42 to 47
26 to 29
EXPLORATION & EVALUATION EXPENDITURE
Total Exploration &
Evaluation Expenditure
A$M
47 to 54
57.6(1)
68 to 75
1) FY19 guidance range and actual expenditure excludes evaluation costs. FY19 actual evaluation
expenditure was A$5.6M.
20 — IGO ANNUAL REPORT 2019
KEY OPERATIONS
AND PROJECTS
WEST KIMBERLEY JV
YENEENA JV
LYONS RIVER
NOVA (Ni-Cu-Co)
IGO 100%
HEAD OFFICE PERTH
OPERATIONS
EXPLORATION ACTIVITIES
TROPICANA JV (Au)
IGO 30%
FRASER RANGE
IGO 70-100%
D
N
A
L
N
E
E
R
G
FRONTIER JV
EAST KIMBERLEY
IGO 100%
RAPTOR
IGO 100%
LAKE MACKAY JV
IGO 70%
COPPER COAST
IGO 100%
IGO ANNUAL REPORT 2019 — 21
NOVA
OPERATION
NICKEL-COPPER-COBALT
IGO 100%
AT A GLANCE
LOCATION
140 road-km east northeast of Norseman, Western
Australia (Fraser Range)
PRODUCT
Nickel (Ni), Copper (Cu), Cobalt (Co)
MINING
Underground contract mining and owner operated
processing plant
PROCESSING METHOD
Conventional crushing, grinding, flotation and filtration
SALES
100% nickel sulphide concentrate to BHP Billiton Nickel
West Pty Ltd and Glencore International AG. 100% copper
sulphide concentrate to Trafigura Pte Ltd. All contracts
due to expire in FY20.
FY19 PRODUCTION
30,708t Ni
13,693t Cu
1,090t Co
FY19 PAYABLE CASH COSTS
A$2.07/lb Ni
RESOURCES1
270,000t Ni
107,000t Cu
9,000t Co
RESERVES1
219,000t Ni
87,000t Cu
7,000t Co
ESTIMATED REMAINING MINE LIFE
7+ years
GROWTH POTENTIAL
Discovery of new magmatic nickel deposits within IGO’s
extensive tenement positions in the Fraser Range.
Processing of Nova’s nickel concentrate into a nickel
sulphate product for the energy storage market.
1
See Resources and Reserves section on pages 28 to 31 of this report.
22 — IGO ANNUAL REPORT 2019
Nova is located in the Great Western
Woodland, approximately 140km
east northeast of Norseman. The
Ngadju are the Traditional Owners
and custodians of this area and their
native title was recognised by the
Federal Court on 21 November 2014.
The Nova deposit was discovered in July 2012 and
development of the site commenced in January
2015. Commercial production started in July
2017 and the operation reached nameplate ore
production in the September 2017 quarter.
FY19 PRODUCTION
Nova production for FY19 was 2.4% above the top
end of the full year guidance range, the result of
higher tonnage and grade than planned. Nova has
demonstrated steady state production at or above
the nameplate 1.5 million tonne per annum rate
through FY19.
Options to increase throughput consistently
beyond the nameplate capacity of 1.5 million tonnes
per annum to maximise production as grade drops
over the remaining mine life have progressed.
MINING
Mineral Resources and Ore Reserves were
updated as of 31 December 2018 as the basis
of the current mine plan utilising updated
information from the final grade control and
minor extensional drilling information, as well as
updated metal pricing.
The rate of mine development ramped down over
the course of the year from three jumbo crews
in the first quarter to two for the remainder of
the year. Development requirements are now
essentially only for maintenance of ore production.
Mining has entered the highest-grade parts
of the orebodies with resulting uplift in mined
grades during FY19. The paste fill plant was
modified to increase capacity in line with future
production scenarios.
During the year the mining contract with Barminco
was extended for a further term of six years, out to
mid-2024.
IGO is actively exploring proof
of concept studies for complete
electric underground mining and
these preliminary studies will
continue in FY20.
In FY19, IGO also started
incorporating drone technology
into our Nova operations. This
technology can assist with Run
of Mill (ROM) pad and stockpile
management, analysing
environmental disturbance, and
in emergency response situations
such as a bushfire, or search and
rescue efforts.
Nova is the first underground mine
in Western Australia to implement
full network firing from surface.
Benefits include enhanced safety of
our personnel, more reliability and
flexibility and improved reporting
with analysis of data post-firing.
Our focus on operational excellence
will continue in FY20, with a range
of areas to be further explored,
including equipment productivity
and tracking, additional automation
and technology benefits and
innovations to improve recoveries
and efficiencies through technology
that can reduce costs.
NEAR-MINE EXPLORATION
During FY19, IGO made significant
breakthroughs in the interpretation
of the 3D seismic dataset that
covers the Nova Mining Lease. This
resulted in the ability to predict the
location of mafic and ultramafic
intrusions that may host Ni-Cu
sulphide mineralisation at depths
exceeding 500m. Deep drilling
through these targets confirmed
the presence of thick (500m to
1,000m) mafic-ultramafic intrusions,
similar in size and composition to
the Nova upper intrusion, carrying
widespread three-phase Fe-Ni-Cu
sulphide disseminations and blebs.
These large intrusions appear to
be connected by, or are associated
with, smaller tube-like ‘chonolith’
intrusions with a very similar mineral
composition and blebby sulphides
as the Nova intrusion. The 3D
seismic dataset cannot definitively
direct detect massive sulphide
mineralisation, but it has enabled the
3D mapping of intrusive systems that
potentially host such mineralisation,
and the Company remains optimistic
that significant massive sulphide
mineralisation exists within these
complex intrusive systems.
PROCESSING
The Nova Operation processing
plant performed well in FY19, setting
monthly production records three
times in the second half of the year.
The plant is now constrained by ore
grades in the flotation section of
the plant, with concentrate filtration
capacity being closely matched to
the flotation section.
Borefields continue to have excess
capacity, however dissolved iron
and manganese in some bores has
caused difficulties in the reverse
osmosis plant. The tailings storage
facility continues to be used as
a water storage dam and water
efficiency projects continue to
reduce the requirements from
the borefields. Electric power is
provided by Zenith Pacific’s 20 MW
power station.
SMART SOLUTIONS
At IGO, we continually look for ways
to improve the way we do business
and operational excellence is one
of the keys to our success. Our
teams are finding innovative ways of
using technology and innovation to:
improve the safety and wellbeing of
our employees; reduce our impacts
on the environment; deliver step
change opportunities; and continue
to improve efficiencies and
productivity. We call these initiatives
‘IGO - Smart Solutions’.
Smart solutions being deployed at
Nova include the introduction of
renewable energy; underground
electric vehicles; remote surface
blasting; drone technology;
advanced machine learning;
milling advanced process controls;
efficient data capture; process and
analytics; and surface automation
for underground mining.
In May 2019, Zenith Pacific
began site construction on a 6.7
megawatt solar power station, with
commissioning expected in the first
half of FY20. The Nova solar project
is a fully integrated commercial
hybrid diesel-solar facility. It is
expected the hybrid energy solution
will reduce costs and carbon
footprint, with approximately
15-20% of Nova’s total energy
requirements to be provided by
solar energy.
IGO has also been investigating
opportunities to electrify the
underground mining fleet, with
benefits including energy savings,
reduction to ventilation demands,
associated reduction in capital and
operating costs, improved safety and
working environment, and reduced
carbon emissions.
CASE STUDY:
NOVA BUSHFIRES
On 21 February 2019, Matt
Spagnolo was acting Registered
Manager at Nova when reports
arrived of smoke and fire in nearby
bushland to the south of the mine
site. Initial inquiries led everyone to
believe that it was a small bushfire
that was under control.
But only 24 hours later, unexpected
changes in the weather caused the
fire to jump the access road and
the severity of the situation began
to escalate quickly.
Nova’s Emergency Response Team
shifted from monitoring to active
containment of the fire. IGO’s Crisis
Response Team in Perth was also
activated as the decision was made
to evacuate all employees from the
accommodation village. Evacuation
was not a decision taken lightly,
as this was a major disruption for
everyone working on site.
“Making that decision was the
right thing to do and I was never
in doubt,” said Matt. “The safety of
our people will always come first.”
Employees’ positive response and
willingness to work together made
things go smoothly. As people
grabbed pillows, and blankets, and
found a place to sleep, the ERT and
the State Department of Fire and
Emergency Services got to work
alongside IGO contractor partners
Barminco, CV Lomag, and Cater
Care, to contain the fire and avoid
a major crisis unfolding at Nova.
Throughout the event, there was a
clear sense of purpose about what
needed to be done and everyone
worked together focused on a
unanimous approach to protect our
people and our assets.
“The leadership group who led the
bushfire response has got to be
the best team I have ever worked
in,” Matt said. “The collaboration
and how we all looked out for each
other was an amazing experience,
especially when you consider we
were thrown together in a crisis.”
Four days later the fire was
successfully contained, everyone was
safe and business returned to normal.
IGO ANNUAL REPORT 2019 — 23
TROPICANA
OPERATION
GOLD
IGO 30%
AT A GLANCE
LOCATION
330km northeast of Kalgoorlie, Western Australia
PRODUCT
Gold (Au)
MINING
Open pit contract mining with production from up to four
contiguous pits extending some 5km in strike length.
The Boston Shaker Underground mine is being developed
and expected to deliver first gold production in the
September 2020 quarter.
PROCESSING METHOD
Conventional crushing, grinding and CIL (carbon-in-
leach) recovery
SALES
To a combination of the Perth Mint and IGO's banking
partners via forward sales contracts
FY19 PRODUCTION
518,172oz (100% basis)
154,402oz (IGO 30% share)
FY19 CASH COSTS AND ALL-IN SUSTAINING COSTS
A$680/oz
A$951/oz
RESOURCES1
7.29Moz Au (100%)
RESERVES1
3.95Moz Au (100%)
ESTIMATED MINE LIFE
10 years
GROWTH POTENTIAL
The Boston Shaker Underground development will
improve the production profile and enhance cash
flow. There is potential for extensions to the Mineral
Resource below the Tropicana and Havana pits.
Regional Exploration continues.
1
See Resources and Reserves section on pages 28 to 31 of this report.
24 — IGO ANNUAL REPORT 2019
The Tropicana Operation is located
on the western edge of the Great
Victoria Desert, which is the land of
Traditional Owners and custodians
from the Wongatha and Spinifex
peoples. Tropicana is a Joint Venture
and IGO holds 30% while AngloGold
Ashanti Australia (AGAA) is the
operational manager and holds 70%.
IGO targeted and pegged the area containing the
current ore reserves in 2001. AGAA farmed into
the project in 2002, discovering the Tropicana,
Havana and Boston Shaker gold deposits in 2005,
2006 and 2010 respectively.
The decision to develop the Tropicana Operation
was announced in November 2010 following
completion of a positive Bankable Feasibility Study.
Mining the Havana deposit commenced in 2012
and first gold was produced in September 2013. In
January 2018, the Tropicana Operation achieved its
two-million-ounce milestone.
In May 2019, the development of the Boston
Shaker Underground commenced.
FY19 PRODUCTION
For FY19, Tropicana production was within
guidance range achieving 518,172oz Au (100%
basis) or 155,452oz Au (IGO 30% share basis),
while FY19 gold refined and sold was 154,402oz
Au (IGO 30% share basis).
Since 2013, Tropicana has delivered strong free
cash flow and remains prospective with further
value enhancement opportunities. This includes
commencement of production from the Boston
Shaker Underground, which is currently in
development and expected to achieve first gold
in the September 2020 quarter.
TROPICANA EXPLORATION
During FY19, exploration
concentrated near the mine on the
Tropicana mining lease (M39/1096).
The focus was on looking for
resource extensions, specifically the
underground potential at Boston
Shaker, Havana and Havana South.
Exploration drilling was conducted
around the Tropicana mining and
exploration leases at different
prospects and targets. Drilling,
totalling 33,111m, comprised:
• Aircore drilling at Angel Eyes,
West Charmander and
Iceberg North.
• Reverse Circulation (RC) drilling
at Watchtower and drilling
stratigraphic fences.
• RC and diamond drilling at New
Zebra, Madras, Seahorse, Voodoo
Child and Wild Thing.
Encouraging aircore gold anomalies
were returned from Angel Eyes West
(E39/952). When combined with
2017 aircore results from around the
same area, a NNW-trending zone of
gold anomalism is present over 1km
of strike and the anomaly remains
open-ended.
A total of 16,098m of drilling was
also completed at Boston Shaker.
The drilling, on a nominal 50m x 25m
spacing, was designed to increase
the Mineral Resource confidence
through the conversion of Inferred
Mineral Resource to Indicated
Mineral Resource. An updated
Mineral Resource model for the
Boston Shaker Feasibility Study was
stated on 20 February 2019.
MINING
During FY19, 35.3 million bank cubic
metres was mined at Tropicana,
comprising of 14.7Mt of ore and
75.9Mt of waste. The mining
strategy at Tropicana uses a phased
approach with multiple cut-backs
and inpit dumping of waste to
minimise waste haulage distances.
PROCESSING
The mill throughput was 8.2Mt, at
an average grade of 2.2g/t for FY19.
Construction and installation of the
second 6-megawatt (MW) ball mill
was completed in October 2018,
with the project commissioned
in December 2018, enabling the
processing throughput rate to be
increased by about 5%.
Gold recovery was 89.4% for the
year, with gold production at
518,172oz Au (100% basis).
BOSTON SHAKER
UNDERGROUND
On 28 March 2019, the Tropicana Joint
Venture announced the commitment
to the development of the Boston
Shaker Underground mine following
the successful completion of the
Feasibility Study (FS).
The FS assessed an underground
operation mining at a rate of
approximately 1.1Mtpa at an
estimated grade of 3.5g/t Au to
produce approximately 100,000
ounces of gold per annum over a
period of seven years, based on
three years production from Ore
Reserves and a further four years
from Inferred Mineral Resources.
Underground material will displace
lower grade open pit material,
resulting in an improved Tropicana
gold production profile.
The development of the Boston
Shaker Underground will enable
gold production to be maintained at
between 440,000 to 500,000 ounces
per annum (100%) over the five
years up to and including FY23.
The FS estimated a capital cost of
A$105 million (including contingency)
and all-in sustaining costs of A$95
per tonne of underground material.
Macmahon Holdings is the current
open pit mining contractor at
Tropicana and has been appointed as
the underground mining contractor.
Underground development
commenced in May 2019 and first
gold production is expected during
the September 2020 quarter.
Get Into Mining graduates,
Tropicana Operation Site
CASE STUDY:
INDIGENOUS
GRADUATES GET
INTO MINING
AngloGold Ashanti Australia
(AGAA), Independence Group,
Macmahon Holdings and Carey
Mining celebrated a milestone with
eight young Aboriginal trainees
at the Tropicana Operation in
November 2018.
In a formal ceremony at the
Tropicana Operation site, the
trainees were presented with
certificates and traineeship offers
after successfully completing
the eight-week Get Into Mining
training programme.
Get Into Mining is a collaborative
programme run by Aboriginal-
owned mining and civil contracting
company Carey Mining, with the
support of mining contractor
Macmahon Holdings, and
Tropicana Joint Venture partners
AGAA and IGO. Macmahon
Holdings and Carey Mining are also
both contractors at Tropicana.
Get Into Mining comprises a
blended delivery of training in the
classroom, at a simulated work
site and via practical activities
at Tropicana. The programme is
structured to enable a phased
transition into the fly-in, fly-out
working environment.
All eight of the successful
applicants completed the full
programme, qualifying for a
Certificate II in Surface Extraction
Operations. They have since
accepted traineeships across
the mining and exploration
departments at the Tropicana
Joint Venture.
IGO ANNUAL REPORT 2019 — 25
REGIONAL
EXPLORATION
& DEVELOPMENT
PROJECTS / EXPLORATION
OPPORTUNITIES
FRASER RANGE
PROJECT
(Ni, Cu & Co)
(various partnerships)
LAKE MACKAY JV
(Cu, Au, Ni, Co)
(70%)
WEST KIMBERLEY JV
(Ni, Cu, Co) (up to 80%)
RAPTOR PROJECT
(Ni, Cu, Co) (100%)
Regional geochemical sampling,
geophysical surveying and drilling.
Regional aircore drilling and geophysical
programs have identified numerous
anomalous results requiring RC and/or
diamond drill testing.
Unlocking a new unexplored mineral province
in the Northern Territory.
Regional geochemical sampling, airborne
and ground electromagnetic surveys and
drilling have identified several new
mineralised prospects.
New belt-scale project targeting magmatic
Ni-Cu-Co.
Airborne electromagnetic survey completed.
Regional aeromagnetic and radiometric
survey, prospect scale geophysics,
geological mapping surface sampling and
drilling planned.
New belt-scale project targeting Ni-Cu-Co
sulphides along the Willowra Gravity Ridge,
Northern Territory.
Regional aeromagnetic and radiometric
surveys undertaken, and additional
surveys planned.
YENEENA JV OPTION
(Cu, Co) (up to 70%)
New sediment-hosted Cu-Co project
with existing prospects in the Paterson
Province, Western Australia.
COPPER COAST
FRONTIER PROJECT,
GREENLAND
(Cu, Co) (up to 80%)
DE BEERS DATABASE
Regional magnetotelluric survey and
possible drilling.
Earn-in/JV Option on belt-scale project
targeting Zambia-style Cu-Co.
Traverse mapping and sampling of
prospective domains underway.
Unique sample database.
New multifaceted project generation
initiative to unlock value.
26 — IGO ANNUAL REPORT 2019
ORGANIC GROWTH THROUGH
EXPLORATION DISCOVERY
Exploration and discovery are core
to the IGO DNA and a key pillar of
our Company growth strategy.
During FY19, we further
strengthened our in-house team
and realigned our portfolio of
projects to maintain a clear focus on
delivering to the new IGO strategy.
Our diverse exploration team has
a wide breadth of experience and
expertise in the search for and
discovery of commodities critical to
clean energy such as nickel, copper
and cobalt. We also remain attentive
to other commodity opportunities
that can add significant value.
In FY19, we made significant
progress in consolidating our
ground position at our most
prospective belt-scale exploration
projects, including the Fraser
Range and West Kimberley regions
of Western Australia.
We also have belt-scale greenfield
opportunities in the Northern
Territory at the expanded Lake
Mackay Project and the new
100%-owned Raptor Project,
the Yeneena Option in Western
Australia, the Copper Coast Project
in South Australia, and the Frontier
Project in Greenland.
For FY20, we reaffirm our strong and
enduring commitment to organic
growth through both brownfields
and greenfields exploration,
maintaining a strong level of
investment in the Fraser Range
and our other emerging nickel and
copper projects. A feature of our
exploration investment in FY20 will
be a large proportion of drill testing,
which collectively represents more
than 70% of the planned Nova,
Fraser Range and Lake Mackay
exploration spend.
LAKE MACKAY JOINT
VENTURE – NORTHERN
TERRITORY
Base Metals-Gold Project (IGO JV
Manager and 70% owner)
The Lake Mackay Joint Venture with
Prodigy Gold is located 400km
northwest of Alice Springs. The
JV has approximately 6,926km2 of
granted exploration licences and
a further approximately 10,847km2
of licence applications over an
unexplored Proterozoic terrane,
characterised by polymetallic base
and precious metal mineral systems.
Exploration is at an early stage
and, until recently, was limited to
a single tenement. Work programs
during FY19 included soil sampling,
a regional Spectrem AEM survey,
follow up ground moving loop
electromagnetic (MLEM) surveys
and RC drilling.
Elsewhere on the project, drilling at
the Grimlock Prospect confirmed
Co-Ni-Mn-Sc mineralisation in the
lateritic duricrust profile, in all 10
holes drilled, with a highest-grade
intersection of 1m @ 1.86% Co,
17.8% Mn, 0.89% Ni and 135ppm Sc4.
Target testing of the remaining EM
and soil anomalies is ongoing.
At IGO, we are excited about our
greenfield exploration projects
and our best-in-class exploration
team, who are bold, passionate,
fearless and fun, as they strive to
find the specialist metals that will
make clean energy a reality for
communities around the world.
FRASER RANGE PROJECT -
WESTERN AUSTRALIA
Base Metals Project (IGO various
ownership levels)
In FY19, we continued to strengthen
our position in the prospective
Fraser Range, to the east of
Kalgoorlie and Norseman in
Western Australia, through joint
venture agreements and new
tenement applications.
IGO holds the largest tenement
position in the belt with a portfolio
of approximately 14,000km2
of tenure (not including the
Tropicana Joint Venture). We
consider the Fraser Range to
be under-explored and highly
prospective for orthomagmatic Ni-
Cu-Co deposits, Volcanic Massive
Sulphide Cu-Zn-Au-Ag deposits,
and lode-style gold mineralisation.
The Company leverages its
exploration efforts from the Nova
capital infrastructure, while also
gaining further strategic knowledge
from the Nova-Bollinger deposit
through our in-house geologists
and research efforts.
Consequently, during the FY19 year,
our exploration team has generated
more targets and conducted
significant drill testing along the
Fraser Range than ever before.
During the year IGO’s methodical
exploration approach yielded
discovery results at the
Andromeda Cu-Zn-Au-Ag
prospect and the identification of
new mineralised mafic-ultramafic
intrusions around Nova.
Diamond and RC drilling at IGO’s
Andromeda prospect, 75km north-
northeast of Nova has extended
mineralisation from around 120m
strike length to well over 400m
with intersections that include
16.4m @ 1.65% Cu, 2.46% Zn, 0.54g/t
Au, 25.9g/t Ag (near true width) and
41.4m @ 1.47% Cu, 2.46% Zn, 0.35g/t
Au, 22g/t Ag (not true width)1 & 2.
The Themis and Pion gold
prospects, located 60 and 70km
northeast of Nova respectively,
are new discoveries which validate
the Company’s systematic regional
exploration program. Results
include 5m @ 10.9g/t Au from 49m
(1g/t Au cut-off) enclosed within a
broader interval of 25m @ 2.4g/t
Au from 42m (0.1g/t Au cut-off) at
Themis and 4m @ 3.8ppm Au from
86m at Pion3. Both prospects will be
followed up in FY20.
The regional Spectrem Airborne
Electromagnetic (AEM) survey
across the Fraser Range was
completed during the year,
bringing the total area covered by
Spectrem to approximately 46,000
line-km. Numerous high-quality
electromagnetic (EM) targets are
now being methodically assessed
and will be followed up using deep
penetrating Low-Temperature and
High-Temperature SQUID EM teams.
IGO also plans to complete
>180,000m of aircore and
diamond drilling in FY20 to test
the large number of geophysical
and geochemical targets that
have been, and continue to be,
generated from our quality datasets
assembled over the past few
years. The Company’s regional
aircore program, designed to map
the geology under cover and for
generating geochemical anomalies,
will continue in the southern part
of the Fraser Range, but the focus
is now shifting to infill drilling
around geological and geochemical
anomalies generated over the past
18 months.
WEST KIMBERLEY JOINT
VENTURE – WESTERN
AUSTRALIA
Base Metals Project (IGO Manager
and Option to Earn up to 80%)
A highly prospective land position
of approximately 3,470km2 was
acquired by IGO partnering with
Buxton Resources. The West
Kimberley project focuses on the
Ruins Intrusive Suite in the King
Leopold Oregon, the host of the
Merlin Prospect. This prospect is
the most significant magmatic Ni-
Cu sulphide discovery in Australia
since Nova-Bollinger and has
opened up a new belt-scale
Ni-Cu opportunity near the port
town of Derby.
IGO has arranged for a 6,100 line-
km Spectrem AEM survey to be
flown over key JV tenements across
the area. Results are currently being
analysed with follow up ground EM
expected to generate new targets
for drilling in FY20.
1
2
3
4
ASX Release – 2018 Mineral Resources and Ore Reserves Update, dated 26 July 2018
ASX Release – CY18 Mineral Resources and Ore Reserves Estimate, dated 20 February 2019
ASX Release - Rumble Resources Significant High Grade Gold Minerlisation in Fraser Range, dated 1 July 2019
Lake Mackay JV Update: High grade cobalt intersected at Grimlock – PRX ASX Release 30 May 2019
IGO ANNUAL REPORT 2019 — 27
MINERAL RESOURCES
AND ORE RESERVES
IGO publicly reports Exploration Results, Mineral Resource
and Ore Reserve estimates in accordance with the ASX listing
rules and the requirements and guidelines of the 2012 edition
of the Australasian Code for Reporting Exploration Results,
Mineral Resources and Ore Reserves – the JORC Code.
IGO previously reported its annual Mineral Resource and Ore
Reserve estimates to the ASX on an end of financial year (FY)
basis but in FY18 elected to change the annual reporting to
an end of calendar year (CY) basis to align with reporting
IGO’s internal budgeting and guidance process, which
typically follow the estimation work as part of financial year
planning for the next budget cycle.
At the end of CY18, Mineral Resources and Ore Reserves
were reported from IGO’s two 100%-owned WA base metal
interests (Nova Operation and Long Project), and IGO’s 30%
interest in Tropicana Gold Mine (TGM). The complete JORC
Code reports, including JORC Code Table 1 checklist, which
detail the material assumptions and technical parameters
for each estimate, can be found at www.igo.com.au under
the menu ‘Our Business – Mineral Resources and Ore
Reserves' and also the ASX release CY18 Mineral Resource
and Ore Reserve Statement dated 20 February 2019. Listings
of the respective estimates for the end of FY18 and end of
CY18 are tabulated below for IGO’s total interests and for
the operational and project subdivisions. The JORC Code
Competent Person statements for the end of CY18 estimates
are included on page 31 of this annual report.
IGO divested the Long Project on 31 May 2019 and as such
references to the Long Projects' Mineral Resources and Ore
Resources are only relevant to that divestment date in FY19.
IGO’s public reporting governance for estimates and results
includes several assurance measures. Firstly, IGO ensures
that the Competent Persons responsible for public reporting:
• Are current members of a professional organisation that is
recognised in the JORC Code framework
• Have sufficient mining industry experience that is relevant
to the style of mineralisation and reporting activity, to be
considered a Competent Person as defined in the JORC Code
• Have provided IGO with a written sign-off on the results
and estimates that are reported, stating that the report
agrees with supporting documentation regarding the
results or estimates prepared by each Competent Person
• Have prepared supporting documentation for results
and estimates to a level consistent with standard industry
practices – including the JORC Code Table 1 Checklists for
any results and/or estimates reported.
IGO also ensures that any publicly reported results and/or
estimates are prepared using accepted industry methods
and using IGO’s corporate guidance for metal prices and
foreign exchange rates. On operating mines, IGO additionally
ensures that the estimation precision is reviewed regularly
through a reconciliation comparing the Mineral Resource
and Ore Reserve forecasts to actual mine and process
production results.
Estimates and results are also peer reviewed internally by
IGO’s senior technical staff before being presented to IGO’s
Board for approval and subsequent ASX reporting. Market
sensitive or production critical estimates may also be audited
by suitably qualified external consultants to ensure the
precision and correctness of the reported information.
IGO TOTAL
TABLE 1 — 30 June 2018 and 31 December 2018
IGO TOTAL — MINERAL RESOURCES
Project or
Operation
FY18
30-6-2018
Nova Operation (100%)
Long Project (100%)
Tropicana Gold Mine (30%)
End of FY18 Total
CY18
31-12-2018
Nova Operation (100%)
Long Project (100%)
Tropicana Gold Mine (30%)
End of CY18 Total
CY18/FY18
(relative)
Nova Operation (100%)
Long Project (100%)
Tropicana Gold Mine (30%)
CY18/FY18
Mass
(Mt)
13.1
0.8
41.9
55.8
13.2
0.8
40.9
54.9
101%
100%
98%
98%
Grades estimates
Co
(%)
0.07
-
-
Cu
(%)
0.8
-
-
Grades are not additive
0.8
-
-
0.07
-
-
Ni
(%)
2.0
4.2
-
2.0
4.2
-
Grades are not additive
100%
100%
-
100%
-
-
100%
-
-
Grades are not additive
Au
(g/t)
-
-
1.62
-
-
1.76
-
-
109%
In situ metal estimates
Cu
(kt)
109
-
-
109
107
-
-
107
98%
-
-
98%
Co
(kt)
9
-
-
9
9
-
-
9
100%
-
-
100%
Au
(koz)
-
-
2,187
2,187
-
-
2,310
2,310
-
-
106%
106%
Ni
(kt)
268
32
-
300
270
32
-
302
101%
100%
-
101%
28 — IGO ANNUAL REPORT 2019
IGO TOTAL CONT.
TABLE 2 — 30 June 2018 and 31 December 2018
Project or
Operation
FY18
30-6-2018
Nova Operation (100%)
Long Project (100%)
Tropicana Gold Mine (30%)
End of FY18 Total
CY18
31-12-2018
Nova Operation (100%)
Long Project (100%)
Tropicana Gold Mine (30%)
End of CY18 Total
CY18/FY18
(relative)
Nova Operation (100%)
Long Project (100%)
Tropicana Gold Mine (30%)
CY18/FY18
NOVA OPERATION
TABLE 3 — 30 June 2018 and 31 December 2018
Mass
(Mt)
IGO TOTAL — ORE RESERVES
Grades estimates
Co
(%)
0.06
-
-
Cu
(%)
0.76
-
-
Ni
(%)
1.86
-
-
11.7
-
19.5
31.2
11.5
-
19.7
31.1
101%
-
101%
100%
Grades are not additive
1.90
-
-
0.76
-
-
0.06
-
-
Grades are not additive
102%
-
-
- Grades are not additive -
100%
-
-
100%
-
-
Au
(g/t)
-
-
1.89
-
-
1.77
-
-
94%
Ni
(kt)
216
-
-
216
219
-
-
219
101%
-
-
100%
In situ metal estimates
Cu
(kt)
89
-
-
89
87
-
-
87
98%
-
-
98%
Co
(kt)
7
-
-
7
7
-
-
7
100%
-
-
100%
Au
(koz)
-
-
1,185
1,185
-
-
1,122
1,122
-
-
95%
95%
Source
JORC Code Class
Underground
Stockpiles
Total
Measured
Indicated
Inferred
Subtotal
Measured
Measured
Indicated
Inferred
Nova Operation Total
NOVA OPERATION — MINERAL RESOURCES
FY18
Mass
(Mt)
11.9
1.1
0.1
13.0
0.1
12.0
1.1
0.1
13.1
Nickel
Copper
Cobalt
(%)
2.1
0.9
0.6
2.0
1.7
2.1
0.9
0.6
2.0
(kt)
256
10
0.4
266
2
258
10
0.4
268
(%)
0.90
0.39
0.2
0.8
0.7
0.87
0.4
0.2
0.8
(kt)
104
4
0.1
109
1
105
4
0.1
109
(%)
0.07
0.04
0.02
0.07
0.07
0.07
0.04
0.02
0.07
(kt)
9
0.4
<0.1
9
0.1
9
0.4
<0.1
9
Mass
(Mt)
12.5
0.6
0.04
13.2
0.1
12.6
0.6
0.04
13.2
CY18
Nickel
Copper
Cobalt
(%)
2.1
1.0
1.9
2.0
2.1
2.1
1.0
1.9
2.0
(kt)
261
6
1
268
1
263
6
1
270
(%)
0.8
0.4
0.7
0.8
0.9
0.8
0.4
0.7
0.8
(kt)
104
2
0.3
106
1
104
2
0.2
107
(%)
0.07
0.04
0.06
0.07
0.08
0.07
0.04
0.06
0.07
(kt)
9
0.2
<0.1
9
0.1
9
0.2
<0.1
9
TABLE 4 — 30 June 2018 and 31 December 2018
Source
JORC Code Class
Underground
Stockpiles
Total
Proved
Probable
Proved
Proved
Probable
Subtotal
Nova Operation Total
NOVA OPERATION — ORE RESERVES
FY18
Mass
(Mt)
10.2
1.3
11.6
0.1
10.3
1.3
11.7
Nickel
Copper
Cobalt
(%)
1.93
1.34
1.86
2.4
1.92
1.34
1.86
(kt)
197
18
215
2
198
18
216
(%)
0.79
0.57
0.76
1.02
0.79
0.57
0.76
(kt)
80
8
88
1
81
8
89
(%)
0.07
0.04
0.06
0.11
0.07
0.04
0.06
(kt)
7
1
7
<0.1
7
1
7
CY18
Mass
(Mt)
11.3
0.2
11.5
0.1
11.4
0.2
11.5
Nickel
Copper
Cobalt
(%)
1.91
1.26
1.90
2.11
1.91
1.26
1.90
(kt)
215
2
217
1
216
2
219
(%)
0.76
0.46
0.76
0.86
0.76
0.46
0.76
(kt)
86
1
87
1
87
1
87
(%)
0.06
0.04
0.06
0.08
0.06
0.04
0.06
(kt)
7
<0.1
7
<0.1
7
<0.1
7
IGO ANNUAL REPORT 2019 — 29
TROPICANA GOLD MINE
TABLE 5 — 30 June 2018 and 31 December 2018
TROPICANA GOLD MINE — 100% MINERAL RESOURCES
Estimate
JORC Code Class
Open pit
Underground
Stockpiles
Total
Measured
Indicated
Inferred
Measured
Indicated
Inferred
Measured
Measured
Indicated
Inferred
Mass
(Mt)
8.9
84.3
9.2
102.4
…
10.1
5.7
15.7
21.9
30.8
94.3
14.9
140.0
FY18
Gold
(g/t)
1.34
1.58
1.17
1.53
…
3.57
3.20
3.44
0.74
0.92
1.80
1.95
1.62
(koz)
390
4,290
350
5,020
…
1,160
580
1,740
520
910
5,450
930
7,290
Subtotal
Subtotal
Subtotal
TABLE 6 — 30 June 2018 and 31 December 2018
TROPICANA GOLD MINE — 100% ORE RESERVES
Estimate
JORC Code Class
Open pit
Underground
Stockpiles
Total
Proved
Probable
Proved
Probable
Proved
Proved
Probable
Subtotal
Subtotal
Tropicana Gold Mine Total
Mass
(Mt)
5.7
47.5
53.2
-
-
-
11.7
17.4
47.5
64.9
FY18
Gold
(g/t)
1.81
2.13
2.10
-
-
-
0.95
1.23
2.13
1.89
(koz)
330
3,260
3,590
-
-
-
360
690
3,260
3,950
LONG PROJECT
TABLE 7 — 30 June 2018 and 31 December 2018
LONG PROJECT - 100% MINERAL RESOURCES
Deposit
JORC Code Class
Long
McLeay & Victor South
Moran
Total
Measured
Indicated
Inferred
Measured
Indicated
Inferred
Measured
Indicated
Inferred
Measured
Indicated
Inferred
Subtotal
Subtotal
Subtotal
Long Project Total
Mass
(Mt)
-
0.13
0.24
0.37
-
0.24
0.05
0.29
-
0.04
0.05
0.09
-
0.40
0.35
0.75
FY18
Nickel
(g/t)
-
5.34
4.8
5.0
-
3.35
3.5
3.4
-
3.75
3.6
3.7
-
4.01
4.4
4.2
(koz)
-
7
12
18
-
8
2
10
-
2
2
3
-
16
15
32
Mass
(Mt)
6.5
75.5
5.6
87.6
…
8.5
12.4
20.8
27.8
34.3
84.0
17.9
136.2
Mass
(Mt)
4.2
43.2
47.4
-
2.7
2.7
15.5
19.8
45.9
65.7
Mass
(Mt)
-
0.13
0.24
0.37
-
0.24
0.05
0.29
-
0.04
0.05
0.09
-
0.40
0.35
0.75
CY18
Gold
(g/t)
1.29
1.50
1.31
1.47
…
4.11
4.36
4.26
0.79
0.88
1.76
3.41
1.76
CY18
Gold
(g/t)
1.68
1.94
1.91
-
3.65
3.65
1.01
1.15
2.04
1.77
(koz)
270
3,640
240
4,140
…
1,120
1,730
2,850
700
970
4,760
1,970
7,700
(koz)
230
2,690
2,920
-
320
320
500
730
3,010
3,740
CY18
Nickel
(g/t)
-
5.34
4.8
5.0
-
3.35
3.5
3.4
-
3.75
3.6
3.7
-
4.01
4.4
4.2
(koz)
-
7
12
18
-
8
2
10
-
2
2
3
-
16
15
32
No Ore Reserves were reported for the Long Project at the end of FY18 or CY18 as the mine has been placed on care and
maintenance. The Long Project was divested in May 2019.
30 — IGO ANNUAL REPORT 2019
COMPETENT PERSON
STATEMENTS
Information in this Mineral Resources and Ore Reserves
section that relates to Exploration Targets, Exploration
Results, Mineral Resources or Ore Reserves is based on
the information compiled by the Competent Persons listed
in Table 8 below, which includes details of their respective
professional memberships, their relationship to IGO and
details of the reporting activity for which each Competent
Person is taking responsibility.
All the Competent Persons listed below have provided IGO
with written confirmation that they have sufficient experience
that is relevant to the style of mineralisation and type of
deposit under their consideration, and to the reporting
activity being undertaken, to qualify as a Competent Person
as defined in the 2012 Edition of the Australasian Code For
Reporting of Exploration Results, Mineral Resources and Ore
Reserves – the JORC Code. They have also provided IGO with
a written consent in the ASX release dated 20 February 2019
to the inclusion in this report of the respective matters based
on each Competent Person’s information in the form and
context in which they appear in this report, and that there are
no issues that could be perceived as a material conflicts of
interest in this public report to the ASX.
TABLE 8 — 31 December 2018
IGO COMPETENT PERSONS FOR 31 DECEMBER 2018 ESTIMATES AND RESULTS
Professional Association
Activity
Competent
Person
Membership
Number
IGO Relationship
Responsibility Activity
Exploration Results
Ian Sandl
MAIG/RPGeo
2388
Damon Elder
MAusIMM
208240
Mineral Resources
Mark Murphy
MAIG/RPGeo
2157
Paul Hetherington
MAusIMM
209805
General Manager Exploration
IGO Perth
Manager Mine Geology -
TGM AngloGold Ashanti Australia
Resource Geology Manager
IGO Perth
Superintendent Geology
IGO Nova Operation
IGO greenfield results
TGM results
Long Project estimate
Nova Operation estimate
Damon Elder
MAusIMM
208240
Manager Mine Geology -
TGM AngloGold Ashanti Australia
TGM estimate
Ore Reserves
Greg Laing
MAusIMM
206228
Superintendent Planning
IGO Nova Operation
Nova Operation estimate
Steven Hulme
MAusIMM/CP
220946
Integrated Planning Superintendent -
TGM AngloGold Ashanti Australia
TGM open pit estimate
Jeff Dang
MAusIMM
307499
CY18 Report
Mark Murphy
MAIG/RPGeo
2157
Specialist Mining Engineer
AngloGold Ashanti Australia
Resource Geology Manager
IGO Perth
TGM underground
estimate
Annual report compilation
Refer to IGO ASX release dated 26 July 2018 for end of FY18 Competent Person Statements.
1. MAusIMM = Member of Australasian Institute of Mining and Metallurgy, MAusIMM/CP = MAusIMM and Chartered Professional MAIG/RPGeo = Member of Australian Institute of
2.
3.
4.
5.
Geoscientists and Registered Professional Geoscientist
Information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves is based on the information compiled by the relevant
Competent Persons listed above
All IGO personnel are full-time employees of IGO; all AGAA personnel are full-time employees of AGAA
All the Competent Persons have provided IGO with written confirmation that they have sufficient experience that is relevant to the styles of mineralisation and types of deposits,
and the activity being undertaken with respect to the responsibilities listed against each professional above , to qualify as a Competent Person as defined in the 2012 edition of the
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves – the JORC Code 2012 Edition
Each Competent Person listed above has provided to IGO by e-mail:
•
•
Proof of their current membership to their respective professional organisations as listed above
A signed consent to the inclusion of information for which each person is taking responsibility in the form and context in which it appears in this report, and that the respective
parts of this report accurately reflect the supporting documentation prepared by each Competent Person for the respective responsibility activities listed above
Confirmation that there are no issues that could be perceived by investors as a material conflict of interest in preparing the reported information
•
IGO ANNUAL REPORT 2019 — 31
CORPORATE
GOVERNANCE
Working together to make a difference for all of our stakeholders by creating value
through good corporate governance and fostering a culture we can be proud of.
To assist the Board to discharge
its responsibilities, the Board
has established the following
committees:
• Audit
• Sustainability & Risk
• People & Performance
• Nomination & Governance
Details of relevant qualifications
and experience for all Committee
members can be found on pages 34
and 35 of this annual report.
Further information about the
Committees can be found in
the 2019 Corporate Governance
Statement.
The Company regularly reviews
its governance arrangements and
corporate governance policies
to reflect the growth of the
Company, current legislation and
best practice. Further information
about governance at IGO can be
found in the Governance section
of our website at www.igo.com.au
as well as copies of our Corporate
Governance Standards.
2019 CORPORATE
GOVERNANCE STATEMENT
The Company’s 2019 Corporate
Governance Statement outlines
the Company’s current corporate
governance framework, by
reference to the Corporate
Governance Principles and
Recommendations contained in
the ASX Corporate Governance
Council’s 3rd Edition of its
Corporate Governance Principles
and Recommendations (ASX
Recommendations). During
FY19, the Company’s corporate
governance practices complied with
all relevant ASX Recommendations.
We are pleased that many of
IGO’s governance practices are
already in alignment with the new
recommendations in the 4th Edition
of the ASX Recommendations
and following a full review of our
corporate governance framework
are confident that we will be able to
early adopt the requirements of the
4th Edition for FY20.
The Corporate Governance
Statement is current as at 29
August 2019 and has been
approved by the Board.
This statement can be found in
the Governance section of IGO’s
website at http://www.igo.com.au/
site/our-business/governance,
along with the ASX Appendix 4G, a
checklist cross-referencing the ASX
Recommendations to disclosures
in the Corporate Governance
Statement, the 2019 Annual Report
and the Company website.
At IGO, we believe that excellence in
corporate governance is essential
for the long-term sustainability of
the business and building long-term
value for all our stakeholders and
employees. To us this means making
a difference for all our stakeholders.
Whilst the Board of Directors is
responsible for the Company’s
corporate governance, we do not see
governance as just a matter for the
Board. We believe good governance
is about doing the right thing and
having the courage to stand up for
what is right. It is the responsibility
for all those who work at IGO to act
ethically, with integrity and within
the law, and this ethos is embedded
throughout the organisation.
Our governance framework
supports our people to deliver our
strategy and provides an integral
role for effective and responsible
decision making at IGO.
The Board is responsible for
promoting the success of the
Group in a way which ensures that
the interests of shareholders and
stakeholders are promoted and
protected. Its key functions are
setting the long-term corporate
strategy, reviewing and approving
business plans and annual budgets,
overseeing the risk management
framework, approving material
capital expenditure, approving
financial statements, approving
and monitoring the adherence to
Company policies, developing and
promoting corporate governance,
and demonstrating, promoting and
endorsing an ethical culture.
32 — IGO ANNUAL REPORT 2019
The Board undertakes a comprehensive review of the board skills matrix on an annual basis,
more details on this review can be found in the 2019 Corporate Governance Statement.
Following the review, it was determined that the Board and Committees currently have a
strong combination of skills and experience across the key desired areas as listed below.
GENERAL BOARD SKILLS
& EXPERIENCE
BUSINESS SPECIFIC BOARD
SKILLS & EXPERIENCE
EXECUTIVE LEADERSHIP
Effective leadership delivering business
success through engagement,
enablement and organisational design
and change
STRATEGY
Demonstrated ability to envision a
desired outcome and to develop,
contextualise and keep alive strategic
plans to deliver the desired outcome
FINANCIAL ACUMEN
Management oversight of, or
qualifications and/or experience, in
corporate finance, accounting and
financial controls functions
RISK MANAGEMENT
Experience working with and applying
broad risk management frameworks in
various countries, regulatory regimes or
business environments
GOVERNANCE & BOARD
Commitment to high standards of
governance, including experience
with a large business enterprise
which is subject to rigorous
governance standards
PEOPLE & REMUNERATION
Experience in reward/recognition
strategy to mobilise a critical mass
of people who want to come to work,
know what to do and can and want to
be their best
REGULATORY & PUBLIC POLICY
Experience in diverse political, cultural,
regulatory and business environments
and in influencing public policy
decisions and outcomes
INDUSTRY SPECIFIC
Senior executive experience in the
mining or resources industry including
an in-depth knowledge of exploration,
project development and construction,
operations, markets, competitors,
technology and innovation
INTERNATIONAL
Experience in a global organisation or
working in a non-Australian jurisdiction
with international assets, business
partners, cultures and communities
M&A AND FUNDING
Experience managing, directing or
advising on mergers, acquisitions,
divestments, portfolio optimisations
and delivering funding solutions
CAPITAL PROJECT
Experience with projects with large
capital outlays and longer term
investment horizons, in both the
planning and execution phases
INNOVATION & TECHNOLOGY
Experience with new and emerging
technology and insights from
industries that have been through
significant technology/digital
disruption or transformation
HSE
Senior management experience
in workplace health, wellbeing and
safety, environmental and social
responsibility including climate
change and sustainability
STAKEHOLDERS
Experience in socially responsible
development and operation and
with engaging, influencing and
building positive relationships
with stakeholders
LEGEND
Extensive
Moderate
Low
IGO ANNUAL REPORT 2019 — 33
BOARD
PROFILE
PETER
BILBE
PETER
BRADFORD
DEBRA
BAKKER
NON-EXECUTIVE CHAIRMAN
MANAGING DIRECTOR &
CHIEF EXECUTIVE OFFICER
NON-EXECUTIVE DIRECTOR
Age 69
B.Eng. (Mining) (Hons), MAusIMM
Age 61
B.AppSc., FAusIMM, MSMME
Age 53
MAppFin., BBus. (FinAcc), GradDip
FINSIA, GAICD
TERM OF OFFICE
TERM OF OFFICE
TERM OF OFFICE
Mr. Bilbe was appointed as
Non-executive Director in
March 2009 and Non-executive
Chairman in July 2011.
Mr. Bradford was appointed
as Managing Director and
Chief Executive Officer in
March 2014.
BOARD COMMITTEES
Audit
Nomination & Governance
People & Performance
EXPERIENCE
Mr. Bilbe is a mining
engineer with over 40 years’
experience in the mining
industry. Mr. Bilbe has held
senior positions at Northern
Iron, Sihayo Gold, Norseman
Gold Mines, Mount Gibson,
Aztec Resources, Portman,
Aurora Gold and Kalgoorlie
Consolidated Gold Mines.
Mr. Bilbe has a breadth of
experience in the mining
industry in Australia and
overseas with a strong
background in gold, base
metals and iron ore at
operational, managerial and
board levels.
OTHER CURRENT DIRECTORSHIPS
Non-executive Chairman -
Horizon Minerals Limited and
Adriatic Metals Plc.
FORMER DIRECTORSHIPS
IN THE LAST 3 YEARS
None.
EXPERIENCE
Mr. Bradford is a senior
executive and a metallurgist
with over 35 years' experience
in the mining industry.
Mr. Bradford has significant
operational, corporate
and board experience in
Australia and overseas in
nickel, copper and gold. He
is a strong advocate of the
mining industry as well as
the need to promote greater
diversity and inclusion.
Mr. Bradford is President of
the Association of Mining and
Exploration Companies Inc
(AMEC), Vice President of the
Western Australian Mining
Club, and Chairman of the
Curtin University Alumni
Scholarship campaign.
OTHER CURRENT DIRECTORSHIPS
Non-executive director -
GEO40 Limited (private).
FORMER DIRECTORSHIPS
IN THE LAST 3 YEARS
None.
Ms. Bakker was appointed
as a Non-executive Director
in December 2016.
BOARD COMMITTEES
Audit (Chair)
People & Performance
Sustainability & Risk
EXPERIENCE
Ms. Bakker is an experienced
financier and investment
banker with over 27 years'
experience working with
the resources industry. Ms.
Bakker has held senior
positions with Barclays
Capital and Standard
Bank London Group and
established the natural
resources team for
Commonwealth Bank of
Australia and later held
the role of Head of Mining
and Metals origination.
Ms. Bakker is currently
the Western Australian
Representative for Auramet
Trading LLC, a New York
based metals trading firm.
Ms. Bakker has significant
experience in financial
services and products for the
mining industry.
OTHER CURRENT DIRECTORSHIPS
Azumah Resources Ltd.
FORMER DIRECTORSHIPS
IN THE LAST 3 YEARS
Capricorn Metals Ltd.
34 — IGO ANNUAL REPORT 2019
PETER
BUCK
GEOFFREY
CLIFFORD
KEITH
SPENCE
NEIL
WARBURTON
NON-EXECUTIVE DIRECTOR
NON-EXECUTIVE DIRECTOR
NON-EXECUTIVE DIRECTOR
NON-EXECUTIVE DIRECTOR
Age 70
M.Sc. (Geology), MAusIMM, FAIG
Age 69
B.Bus., FCPA, FGIA, FAICD
Age 65
BSc. (Geophysics) (Hons)
Age 63
Assoc. MinEng WASM, MAusIMM, FAICD
TERM OF OFFICE
TERM OF OFFICE
TERM OF OFFICE
TERM OF OFFICE
Mr. Buck was appointed
as Non-executive Director
in October 2014.
Mr. Clifford was appointed
as Non-executive Director
in December 2012.
Mr. Spence was appointed
as Non-executive Director
in December 2014.
Mr. Warburton was appointed
as Non-executive Director
in October 2015.
BOARD COMMITTEES
BOARD COMMITTEES
BOARD COMMITTEES
BOARD COMMITTEES
People & Performance (Chair)
Sustainability & Risk
Nomination & Governance
Sustainability & Risk
EXPERIENCE
EXPERIENCE
People & Performance
Sustainability & Risk (Chair)
EXPERIENCE
Mr. Buck is a geologist with
over 40 years’ experience in
the mineral exploration and
mining industry. Mr. Buck has
worked with WMC Resources,
Forrestania Gold, LionOre
and Breakaway Resources
in executive management
and director positions. He
has been a non-executive
director of Gallery Gold Ltd
and PMI Gold. Mr. Buck was
also a board member of
the Centre for Exploration
Targeting at the University
of Western Australia and
Curtin University and is a life
member of the Association
of Mining and Exploration
Companies (AMEC).
Mr. Buck brings a strong
background in discovery,
development and mining
of nickel, gold and base
metal deposits in Australia
and overseas.
OTHER CURRENT DIRECTORSHIPS
Non-executive director -
Antipa Minerals Limited.
FORMER DIRECTORSHIPS
IN THE LAST 3 YEARS
None.
Audit
Nomination & Governance
(Chair)
EXPERIENCE
Mr. Clifford has more than
40 years’ experience in
senior accounting, finance,
administration and company
secretarial roles in the
mining, retail and wholesale
industries. Mr. Clifford
has held non-executive
directorships at Centaurus
Metals, Fox Resources, Aztec
Resources, Atlas Iron and
Saracen Mineral Holdings.
Mr. Clifford has significant
experience in corporate
governance and ASX/
ASIC compliance, mergers
& acquisitions, financial
reporting, treasury and
FX/commodity hedging,
people management and
strategic planning.
Mr. Spence has over 40 years’
experience in the oil and
gas industry in Australia and
internationally, including
18 years with Shell and 14
years with Woodside. He has
served as a non-executive
director and chair for listed
companies since 2008,
working in energy, oil and gas,
mining, and engineering and
construction services and
renewable energy. He chaired
the board of the National
Offshore Petroleum Safety and
Environmental Management
Authority for seven years.
Mr. Spence has significant
experience in exploration
and appraisal, development,
project construction,
operations and marketing.
OTHER CURRENT DIRECTORSHIPS
OTHER CURRENT DIRECTORSHIPS
None.
FORMER DIRECTORSHIPS
IN THE LAST 3 YEARS
Saracen Mineral Holdings
Limited, Tyranna Resources
Limited.
Non-executive chairman
– Santos Limited and Base
Resources Limited and non-
executive director - Murray &
Roberts Holdings Limited.
FORMER DIRECTORSHIPS
IN THE LAST 3 YEARS
Geodynamics Limited, Oil
Search Limited.
Mr. Warburton is a qualified
mining engineer with more
than 38 years’ experience in
gold and nickel development
and mining. He was previously
the Chief Executive Officer
of Barminco Limited and
Managing Director of
Coolgardie Gold.
Mr. Warburton is also a
Member of the WA School
of Mines Alumni Council.
Mr. Warburton brings a
strong underground mining
expertise to the Board and
is Mark Creasy’s (the largest
shareholder) nominee.
OTHER CURRENT DIRECTORSHIPS
Non-Executive Chairman -
Flinders Mines Limited and
HiSeis Pty Ltd (private) and
Executive Chairman – White
Rivers Exploration (private).
FORMER DIRECTORSHIPS
IN THE LAST 3 YEARS
Australian Mines Limited,
Namibian Copper Limited,
Red Mountain Mining Ltd and
Coolgardie Minerals Ltd.
IGO ANNUAL REPORT 2019 — 35
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:
Final ordinary dividend for the year ended
30 June 2018 of 2.0 cents (2017: 1.0 cent)
per fully paid share
Interim ordinary dividend for the year ended
30 June 2019 of 2.0 cents (2018: 1.0 cent)
per fully paid share
2019
$’000
2018
$’000
11,809
5,868
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
36 — IGO ANNUAL REPORT 2019
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
throughput capacity to 7.5 million tonnes per annum by the
second half of FY17. In FY18, the Tropicana Joint Venture
partners announced the construction of a second 6 mega-
watt ball mill. Installation and commissioning of the mill
was completed on time and on budget in December 2018,
increasing throughput capacity to 8.2 million tonnes per
annum in FY19.
In March 2019, the Tropicana Joint Venture announced the
commitment to the development of the Boston Shaker
Underground mine following the successful completion of
the Feasibility Study (FS). The FS assessed an underground
operation with a mining rate of approximately 1.1Mtpa at
estimated grades of 3.5g/t Au to produce approximately
100,000 ounces of gold per annum over a period of seven
years based on three years production from Ore Reserves
and a further four years from Inferred Mineral Resources.
Underground material will displace lower grade open pit
material, resulting in an improved gold production profile.
Underground development commenced in May 2019 and
first gold production is expected during the September
2020 quarter.
During the year, the Long Operation located near Kambalda,
60km south of Kalgoorlie, was divested to Mincor Resources
NL (Mincor). IGO acquired the Long Operation in 2002 from
WMC Resources Ltd. Under IGO’s ownership, the Long
Operation remained in continuous production from 2002
until mid-2018 when it was placed on care and maintenance
following production of more than 135kt of nickel in ore.
Completion of the sale transaction occurred on 31 May 2019.
On 2 April 2019, IGO released an update to the work completed
to date on the Downstream Nickel Sulphate Study (the Study)
to produce high-quality nickel sulphate from nickel sulphide
concentrate. This is a new process in respect of which IGO has
lodged a patent application (The IGO Process™).
Highlights from the work included:
• Metal recoveries from bench scale and pilot scale testwork
of the Nova nickel-cobalt sulphide concentrate are
extremely high, achieving extraction rates exceeding 97% of
both the nickel and cobalt.
• Based on work completed to date, The IGO Process™ is low
cost and well within the lowest quartile of the cost-curve
for the integrated production of nickel sulphate.
• The IGO Process™ has less impact on the environment
compared to the traditional production methods for nickel
sulphate, with lower emissions, lower power consumption
and less waste generation.
Since the initial release, all optimisation workstreams
have been initiated and confidence in The IGO Process™
to produce high-quality nickel sulphate from nickel
sulphide concentrate has continued to strengthen with
further testwork successes. IGO continues to engage with
potential partners both in Australia and overseas, including
off-take agreements, market sensing and reagent supply
opportunities.
In addition to its mining operations, the Company is pursuing
aggressive growth through its portfolio of high quality belt
scale exploration projects across Australia and overseas that
prioritise nickel and copper exploration and discovery.
EXPLORATION OVERVIEW
Exploration and discovery are core to the IGO DNA and a key
pillar of our Company growth strategy. To this end, the Group
has continued to build and develop its unique portfolio of
highly prospective brownfields opportunities and belt scale
greenfield projects.
Key work activities completed during this period include:
BROWNFIELDS EXPLORATION
• Tropicana Operation – Exploration drilling during the year
concentrated on the Tropicana mining lease (M39/1096)
with the focus on extensions to the Mineral Resource,
specifically scoping the underground potential at Boston
Shaker, Tropicana, Havana North and Havana South. In-
pit resource definition drilling was also completed at the
Boston Shaker, Havana and Havana South pits.
Regional exploration drilling of a number of targets
was progressed.
• Nova Operation – The exploration drilling program
around the Nova Operation continued to test historical
and new targets generated from the high-resolution 3D
seismic survey that was completed during FY18. Drilling
targets included 3D seismic features, interpreted to
be mafic-ultramafic (M-UM) intrusions up to 5km from
known mineralisation, as well as extensions of sulphide
mineralisation within the Nova-Bollinger footprint. During
FY19, the Company completed its deepest recorded
drill hole at 2,506m at the ‘Hercules’ prospect to test an
interpreted M-UM intrusive complex from seismic data.
A complex network of interconnected intrusives is being
unravelled on the Nova Mining Lease with intrusions
such as ‘Elara’ and ‘Hercules’ having many textural and
compositional similarities to the Nova Upper Intrusion.
The FY19 Nova near-mine exploration program revealed
that the Nova orebody is part of a much larger magmatic
nickel system than previously apparent.
In addition, the Company also continued to screen
the tenements adjacent to the Nova Operation for
mineralisation using aircore drilling and Low-Temperature
SQUID Moving Loop Electromagnetic (MLEM) surveys. Both
methods are generating new drill targets.
GREENFIELDS EXPLORATION
• Fraser Range - The Company strengthened its position
in the prospective Fraser Range, through joint venture
agreements, tenement applications and relinquishment of
non-core tenements and at year-end had total tenement
holdings of approximately 14,000 square kilometres.
Extensive regional exploration activities continued across
the Fraser Range including the completion of the regional
Airborne Electromagnetic (AEM) survey by Spectrem Air,
which brought the total area covered by the AEM survey
to approximately 46,000 line kilometres. Numerous high-
quality EM targets were being methodically assessed at
the end of the financial year.
IGO ANNUAL REPORT 2019 — 37
DIRECTORS’ REPORT 30 JUNE 2019 Aircore drilling and diamond drilling programs continued in FY19 and at year-end the Company had eight active drill rigs
across the region with four full-time geophysics teams on board testing geophysical, geochemical and geological targets
generated by the Spectrem Air AEM and aircore drilling programs completed in FY18 and FY19.
• Lake Mackay – During FY19, the Company completed the initial earn-in expenditure component under the terms of a Farm-
in and Exploration Joint Venture Agreement for the Lake Mackay Project to trigger the formation of the unincorporated Lake
Mackay Joint Venture (IGO: Manager, 70% interest). The Lake Mackay Project is 400 kilometres northwest of Alice Springs and
comprises approximately 18,700 square kilometres of tenements.
The Spectrem Air AEM survey which commenced in the prior year was completed in FY19 with a total of approximately 15,000
line kilometres covered. This included several areas that were co-funded by the Northern Territory Government under the
Geophysics & Drilling Collaboration Program. Ground moving-loop EM was conducted over several anomalies detected by
the AEM survey with results being processed at the end of the financial year.
RC drilling of EM targets, the ‘Grimlock’ laterite nickel-cobalt prospect and a gold soil anomaly was undertaken during the
year. The drilling program intersected minor sulphides (mainly pyrrhotite) at all EM targets.
• Raptor –The Raptor Project is 100%-owned by the Company, targeting geology interpreted to be prospective for Nova-style
nickel-copper-cobalt mineralisation along the Willowra Gravity Ridge covering 14,450 square kilometres of tenements.
An application for collaborative Northern Territory Geological Survey (NTGS) funding of a regional 100 metre-spaced
aeromagnetic-radiometric survey was successful.
FINANCIAL OVERVIEW
FY19 was a strong year for the Group from both an operational and financial perspective. The Group generated total revenue
and other income of $792.9 million, a 2% increase on the prior year result of $780.6 million. This was predominantly due to
increased product revenue from the Nova Operation, as it outperformed from a production perspective in its second year
since declaring commercial production and exceeded its production guidance for the FY19 year. Tropicana production and
revenue was also up on the previous year, driven by higher throughput, grade and a higher realised gold price. The increased
revenue for FY19 was achieved despite the absence of the Jaguar Operation, after it was divested to Round Oak Minerals
(CopperChem) in FY18, and the Long Operation, which was placed into care and maintenance in June 2018. The Long Operation
was subsequently sold to Mincor in May 2019.
From a financial performance perspective, the Group’s Board and management monitor Underlying EBITDA (calculated as
profit before tax adjusted for finance costs, interest income, asset impairments, gain on sale of subsidiaries, retention and
redundancy costs, depreciation and amortisation). This measure represents a useful proxy for measuring an operation’s cash
generating capabilities.
Underlying EBITDA increased relative to the previous financial year to a record level, as can be seen in the following chart:
FY19 $341M
FY18 $339M
24
27
(1)
(58)
(41)
(19)
(17)
(7)
0
(3)
(3)
12
256
196
173
141
300
250
200
150
100
M
$
A
50
0
-50
-100
Nova
Operation
Tropicana
Operation
Long
Operation
Jaguar
Operation
Exploration
and evaluation
expense
Corporate
and other
expenses
Gain on sale
of royalty
Investment
revaluation
Share-based
payment
expense
(non-cash)
38 — IGO ANNUAL REPORT 2019
DIRECTORS’ REPORT 30 JUNE 2019 Nova and Tropicana’s underlying EBITDA were up on the previous year, primarily due to the higher revenue. The Long and Jaguar
Operations were placed into care and maintenance and divested in FY18 respectively, and as such there was limited to no
contribution towards the Groups underlying EBITDA in FY19. Exploration and evaluation expenditure increased by $17.2 million
in FY19 as the Group ramped up its pursuit of an exploration discovery through numerous prospective targets in its portfolio of
high quality belt scale tenement holdings.
Corporate expenditure is up slightly due to additional technical support provided to operations and the investment revaluation
of $6.9 million related to mark-to-market adjustment on listed investments.
During the previous financial year, the Company sold a royalty to Dacian Gold Limited for $11.5 million.
Net profit after tax (NPAT) for the year was $76.1 million, compared to $52.7 million in the previous financial year, as detailed in
the chart below.
NPAT VARIANCE FY19 VS FY18
42
(102)
151
(27)
(25)
15
(2)
(17)
(7)
(11)
9
(3)
76
300
250
200
M
$
A
150
100
50
0
53
N P A T F Y 1
8
o l u m e v
V
e
c
P r i c
s o
e V
f P r
r i a
u
d
a
o
n
c
e
c
t i o
a
J
a
a
n v
u
g
n
r i a
a
t
s
C o
e
c
n
r i a
r E B I T D A v
n
o
L
e
c
n
r i a
a
g E B I T D A v
e
c
n
a
a i r
C o
r
p l o
a
x
E
D & A
o
p
t i o
r
t
e & o
a l u
v
t
a
r
n & e
r
e
t i o
h
a
n
e
p
x
n e
M T M o
e
s
f i n
n
t m e
s
e
v
n s
G a i n o
t
s
a l e o
s
n
t
s
e
t fi
s
f A
N e
s
t
s
o
e c
o m e t
c
a
c
n
I n
p
x
x e
a
e
s
n
e
9
N P A T F Y 1
Depreciation and amortisation expense of $237.1 million (FY18: $252.1 million) was down slightly on the previous financial year due
to the absence of Jaguar Operation and Long Operation from the Group, offset by an increase in Tropicana due to higher ore mined
during the year. Net finance costs of $0.7 million were lower than the previous year as the Group builds its cash reserves and has
moved to a positive net cash position, generating more interest income.
Below is a reconciliation of Underlying EBITDA to NPAT for FY19:
341
(1)
(237)
M
$
A
350
300
250
200
150
100
50
0
3
(29)
76
Underlying
EBITDA
Net finance
costs
Depreciation
& amortisation
Gain on sale
of subsidiaries
Income tax
expense
Net profit after
tax
IGO ANNUAL REPORT 2019 — 39
DIRECTORS’ REPORT 30 JUNE 2019 Cash flows from operating activities for the Group were $372.3 million, compared to the FY18 year of $277.8 million. This was
predominantly a result of the Nova Operation’s strong production exceeding production in FY18 as well as increased production
and realised gold prices at Tropicana.
Nova Operation generated $289.1 million cash flows from operating activities, which was a result of 22,434 tonnes of payable
nickel sold (FY18: 14,074 tonnes), 12,208 tonnes of payable copper (FY18: 8,455 tonnes) and 372 tonnes of payable cobalt (FY18:
217 tonnes) sold during the year. Tropicana Operation generated cash from operating activities of $148.0 million following the
sale of 154,402 ounces of gold refined and sold. Cash flow from operating activities also included $54.1 million cash outflow for
exploration expenditure, $5.6 million for evaluation expenditure, $11.5 million cash inflow for the sale of a royalty and $18.6 million
cash outflow for corporate, net borrowing and other costs.
Cash outflows from investing activities decreased to $82.8 million for the year, down from $105.0 million for the FY18 year.
The Group spent $78.1 million on development expenditure, with the majority of that being waste stripping at the Tropicana
Operation ($51.4 million) and underground mine development at Nova Operation ($26.6 million). During the year, IGO received
deferred consideration totalling $26.8 million in respect of the Jaguar Operation and Stockman Project divestments in FY18.
Cash flows from financing activities during the financial year included two semi-annual repayments of borrowings totalling $57.1
million. As at 30 June 2019, the Company’s outstanding debt was $85.7 million, with expected repayment by September 2020.
Lastly, the Company paid dividends totalling $23.6 million during the year.
At the end of the financial year, the Group had cash and cash equivalents of $348.2 million and marketable securities of $27.5
million (2018: $138.7 million and $24.3 million respectively).
The Group’s future prospects are dependent on a number of external factors that are summarised towards the end of this report.
NOVA OPERATION
The Nova Operation commenced commercial production on 1 July 2017, five years from discovery, with FY19 being the second
year of commercial production. By the end of the financial year, the majority of the underground capital development had been
completed at the Nova and Bollinger orebodies, with a total underground operating and capital development advance of 5,768m
for the year. A total of 1,510kt of ore was mined at an average grade of 2.25% nickel and 0.95% copper in FY19.
The Nova process plant milled 1,581kt of ore at an average nickel and copper grade of 2.22% and 0.94% respectively for the year,
to produce 30,708t of nickel and 13,693t of copper. Nickel metallurgical recoveries in the processing plant generally performed
in line with modelled recoveries at 87.4%, while copper recoveries were 85.6% for the year.
Nova revenue for the period was $501.9 million, compared to $348.8 million for the prior year. This was generated through
concentrate sales during the period, sold to Glencore International AG (Glencore), Trafigura Pte Ltd (Trafigura) and BHP Billiton
Nickel West Pty Ltd (BHPB Nickel West), with sales amounting to 22,434 tonnes of payable nickel, 12,208 tonnes of payable
copper and 372 tonnes of payable cobalt. Nickel cash costs per payable pound, which comprises the costs of producing nickel
at the mine site and includes credit adjustments for copper and cobalt sales, were $2.07 per payable pound for the year. Below
is a summary of the key physical and financial information relating to the Nova Operation:
NOVA OPERATION
Total revenue
Segment operating profit before tax
Total segment assets
Total segment liabilities
Ore mined
Nickel grade
Copper grade
Cobalt grade
Ore milled
Metal in concentrate
- Nickel
- Copper
- Cobalt
Metal payable - in concentrate produced
- Nickel
- Copper
- Cobalt
Nickel cash costs and royalties*
Nickel All-in Sustaining Costs**
* Includes credits for copper and cobalt
** Includes cash costs, royalties and sustaining capex
40 — IGO ANNUAL REPORT 2019
$'000
$'000
$'000
$'000
tonnes
%
%
%
tonnes
tonnes
tonnes
tonnes
tonnes
tonnes
tonnes
A$/lb total Ni metal payable
A$/lb total Ni metal payable
2019
501,891
95,365
2018
348,792
35,623
1,193,096
1,372,090
66,996
69,113
1,509,875
1,511,920
2.22
0.94
0.08
1.83
0.75
0.06
1,580,706
1,427,072
30,708
13,693
1,090
21,500
12,481
354
2.07
2.79
22,258
9,545
740
15,586
8,666
238
2.78
4.51
DIRECTORS’ REPORT 30 JUNE 2019 TROPICANA OPERATION
During the year, total material mined during was 35.3M bank cubic metres, which comprised of 14.7 million tonnes of ore (>0.6
grams per tonne Au) and 75.9 million tonnes of waste material. The average grade mined for full grade ore (>0.6 grams per tonne
Au) was 1.65 grams per tonne Au for the year.
Ore milled was 8.2 million tonnes, which was up 5% on the prior year primarily as a result of the introduction of a second ball mill
in December 2018. Mill feed grade and recovery were 2.20 grams per tonne and 89.4% for the year respectively.
During the year, the Boston Shaker Underground feasibility study was completed, and approval was given to proceed in March
2019. The development of the underground mine commenced in May 2019, with first gold production expected by September 2020.
Revenue from the Tropicana Operation for the period was $278.5 million, up 16% on the previous year as a result of higher
production due to higher throughput and milled grade and a higher realised gold price. The Company’s share of gold refined
and sold was 154,402 ounces, up 11% on the prior year.
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 $680 per ounce, while All-in Sustaining Costs (AISC) per
ounce sold were $951 per ounce. AISC comprises 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 greenfields exploration expenditure.
The table below outlines the key results and operational statistics during the current and prior year.
TROPICANA OPERATION
Total revenue
Segment operating profit before tax
Total segment assets
Total segment liabilities
Gold ore mined (>0.6g/t Au)
Gold ore mined (>0.4 and 0.6g/t Au)
Waste mined
Gold grade mined (>0.6g/t)
Ore milled
Gold grade milled
Metallurgical recovery
Gold recovered
Gold produced
Gold refined and sold (IGO share)
Cash Costs
All-in Sustaining Costs (AISC)*
$'000
$'000
$'000
$'000
'000 tonnes
'000 tonnes
'000 tonnes
g/t
'000 tonnes
g/t
%
ounces
ounces
ounces
$ per ounce produced
$ per ounce sold
2019
278,480
97,627
314,990
41,491
14,747
2,464
73,406
1.65
8,177
2.2
89.4
518,011
518,172
154,402
680
951
2018
240,377
86,292
304,341
36,486
9,568
884
76,544
1.88
7,781
2.11
88.9
469,071
467,139
138,748
713
1,061
* 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.
EXTERNAL FACTORS AFFECTING THE GROUP’S RESULTS
The Group operates in an uncertain economic environment and its performance is dependent upon the result of inexact and
incomplete information. As a consequence, the Group’s Board and management monitor these uncertainties and, where
possible, mitigate the associated risk of adverse outcomes. The following external factors are all capable of having a material
adverse effect on the business and will affect the prospects of the Group for future financial years.
COMMODITY PRICES
The Group’s operating revenues are sourced from the sale of base metals and precious metals that are priced by external
markets and, as the Group is not a price maker with respect to the metals it sells, it is, and will remain, susceptible to adverse
price movements. The Group mitigates its exposure to commodity prices through a financial risk management policy in which
a percentage of anticipated usage can be hedged. To this end, gold hedging in FY20 represents approximately 53% of the
Group’s share of forecast annual gold production.
The Company has also initiated diesel hedging in order to protect against increases in oil prices, and as at year end, the
Company had hedged approximately 36% of anticipated usage for FY20.
IGO ANNUAL REPORT 2019 — 41
DIRECTORS’ REPORT 30 JUNE 2019 EXCHANGE RATES
The Group is exposed to exchange rate risk on sales denominated in United States dollars (USD) whilst its Australian dollar (AUD)
functional currency is the currency of payment to the majority of its suppliers and employees. The daily average AUD/USD currency
pair’s weakened over the FY19 year. A weaker AUD implies a higher AUD receipt of sales denominated in USD. The Group’s policy is
to mitigate adverse foreign exchange risk by transacting commodity hedges in AUD equivalent terms where possible.
DOWNSTREAM PROCESSING MARKETS
The price of sea freight, smelting and refining charges are market driven and vary throughout the year. These also impact on the
Group’s overall profitability. The price paid for the sale of the Company’s metal contained in concentrates is subject to payability
factors under contractual offtake agreements. These contracts expire during FY20 and the outcome of contract negotiations
may result in the negotiation of different terms that will also impact on the Group’s profitability.
INTEREST RATES
Interest rate movements affect both returns on funds on deposit as well as the cost of borrowings. Furthermore, AUD and USD
interest rate differentials are intimately related to movements in the AUD/USD exchange rate.
NATIVE TITLE
With regard to tenements in which the Group has an existing interest in, or will acquire an interest in the future, it is the case
that there are areas over which Native Title rights exist, or may be found to exist, which may preclude or delay exploration,
development or production activities. The comparable, albeit lesser risk, arises from the potential presence of archaeological
and ethnographic sites.
The Company engages suitably qualified personnel to assist with the management of its exposure to native title and heritage
risks, including appropriate legal and community relations experts. These risks are discussed in more detail in the Company’s
Sustainability Report which can be found on the Company’s website.
EXPOSURE TO ECONOMIC, ENVIRONMENTAL AND SOCIAL SUSTAINABILITY RISKS
The Group has material exposure to economic, environmental and social sustainability risks, including changes in community
expectations, and environmental, social and governance legislation (including, for example, those matters related to climate
change).
The Group employs suitably qualified personnel to assist with the management of its exposure to these risks. These risks are
discussed in more detail in the Company’s Sustainability Report which can be found on the Company’s website.
OTHER EXTERNAL FACTORS AND RISKS
• Operational performance including uncertain mine grades, seismicity, geotechnical conditions, grade control, in fill resource
drilling, mill performance and experience of the workforce;
– Contained metal (tonnes and grades) are estimated annually and published in resource and reserve statements, however
actual production in terms of tonnes and grade often vary as the orebody can be complex and inconsistent.
– Active underground mining operations can be subjected to varying degrees of seismicity. This natural occurrence can
represent significant safety, operational and financial risk. To mitigate this risk substantial amounts of resources and
technology are used in an attempt to monitor seismicity, and predict and control changing geotechnical conditions.
• Exploration success or otherwise;
– Due to the nature of an ever-depleting reserve/resource base, the ability to find or replace reserves/resources presents a
significant operational risk.
• Operating costs including labour markets and productivity;
– Labour is one of the main cost drivers in the business and as such can materially impact the profitability of an operation.
• Changes in market supply and demand of products;
– Any change in supply or demand impacts on the ability to generate revenues and hence the profitability of an operation.
• Changes in the technological advancement of the energy storage market, and the discovery and adoption of alternate
product streams;
• Changes in government taxation legislation; and
• Assumption of estimates that impact on reported asset and liability values.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
In May 2019, the Company divested the Long Operation to Mincor Resources NL. This was after 12 months of the Long Operation
being in care and maintenance following the ceasing of operations in June 2018.
There have been no other significant changes in the state of affairs of the Group during the year.
42 — IGO ANNUAL REPORT 2019
DIRECTORS’ REPORT 30 JUNE 2019 EVENTS SINCE THE END OF THE FINANCIAL YEAR
On 29 August 2019, the Company announced that a final dividend for the year ended 30 June 2019 would be paid on
26 September 2019. The dividend is 8 cents per share and will be franked to 97%.
Other than the above, there has been no other transaction or event of a material and unusual nature likely, in the opinion of the
Directors, to significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group,
in future financial years.
COMPANY SECRETARY
Ms Joanne McDonald was appointed to the position of Company Secretary on 5 October 2015.
Ms McDonald is a qualified Chartered Secretary with over 16 years’ experience working for listed companies in Australia and
the UK. Prior to joining IGO, Joanne held positions with Paladin Energy Ltd, Summit Resources Ltd and Unilever plc. Joanne is
currently a WA State Councillor for the Governance Institute of Australia.
Ms McDonald is a Fellow of the Governance Institute Australia and a Graduate of the Australian Institute of Company Directors.
MEETINGS OF DIRECTORS
The numbers of meetings of the Directors and of each Board Committee held during the year ended 30 June 2019, and the
numbers of meetings attended by each Director were:
Full meetings
of directors
People & Performance
Committee
Audit
Committee
Nomination &
Governance Committee
Sustainability &
Risk Committee
Meetings of committees
Name
Debra Bakker1
Peter Bilbe2
Peter Bradford3
Peter Buck4
Geoffrey Clifford5
Keith Spence6
Neil Warburton7
A
8
8
8
6
7
6
6
B
8
8
8
8
8
8
8
A
4
4
**
3
1
4
-
B
4
4
**
4
1
4
1
A
5
4
**
2
4
1
**
B
5
5
**
2
5
2
**
A
1
3
1
1
3
-
2
B
1
3
1
1
3
1
3
A
5
1
2
5
2
4
3
B
5
2
2
5
2
5
5
A = Number of meetings attended
B = Number of meetings held during the time the Director was a member of the
committee during the year
** = Not a member of the relevant committee
1. Ms Bakker ceased to be a member of the Nomination & Governance
Committee effective 25 October 2018.
2. Mr Bilbe ceased to be a member of the Sustainability & Risk Committee
effective 25 October 2018.
3. Mr Bradford ceased to be a member of the Nomination & Governance
Committee and Sustainability & Risk Committee effective 25 October 2018.
4. Mr Buck ceased to be a member of the Audit Committee and Nomination &
Governance Committee effective 25 October 2018.
5. Mr Clifford ceased to be a member of the People & Performance Committee
and Sustainability & Risk Committee effective 25 October 2018.
6. Mr Spence ceased to be a member of the Audit Committee and Nomination &
Governance Committee effective 25 October 2018.
7. Mr Warburton ceased to be a member of the People & Performance
Committee effective 25 October 2018.
Note: Directors who are not members of a specific committee have a standing
invitation to attend committee meetings with the consent of the relevant
committee chair and in practice generally attend all committee meetings. Their
attendance is only included in the table if they are a member of the committee.
DIRECTORS INTEREST IN SHARES AND SHARE RIGHTS OF THE COMPANY
At the date of this report, the interests of the Directors in the shares, performance rights and service rights of Independence
Group NL were as follows:
Name
Debra Bakker
Peter Bilbe
Peter Bradford
Peter Buck
Geoffrey Clifford
Keith Spence
Neil Warburton
Total
Ordinary fully paid shares
Performance rights
Service rights
16,085
40,000
1,000,000
22,200
15,000
22,125
106,034
1,221,444
-
-
-
-
620,142
93,0881
-
-
-
-
-
-
-
-
620,142
93,088
1. 24,929 service rights have vested due to service condition being achieved and subject to being exercised will convert into ordinary shares
IGO ANNUAL REPORT 2019 — 43
DIRECTORS’ REPORT 30 JUNE 2019 LETTER FROM CHAIR OF
PEOPLE & PERFORMANCE COMMITTEE
DEAR SHAREHOLDER
On behalf of the People & Performance Committee, I am pleased to share with you our FY19 Remuneration Report.
Over the past year, we have experienced increasing competition for talent as the resource sector’s activities have increased.
However, we believe that our strong Company culture and Purpose will be the key to ensuring we have access to and can retain
the talented people needed to deliver our strategy. Underpinning this is IGO’s Total Rewards Philosophy, which is in its third
year since implementation. It ensures that the Company’s remuneration approach is focused and holistic, considering not only
salary but also addressing work/life balance and opportunity for personal development.
SHORT-TERM INCENTIVE FOR FY19
This has been a year of consolidation and achievement for IGO across every aspect of the business. Our exploration program
has gone from strength to strength with the continued expansion of the Company’s activities in the Fraser Range, the successful
completion of a number of additional joint venture agreements and a record number of drill rigs in the field. We have delivered
strong performance at Nova and Tropicana and have successfully divested the Long Operation.
A key element motivating this performance is the set of demanding Short-Term Incentive targets established by the Board and
Leadership team each year. For FY19 these included:
1. Health, Safety and Environmental (HS&E) – delivering sustained, improved HS&E performance across all facets of the
business. This metric goes directly to efficiently and effectively managing the risks inherent in all of the Company’s
operations.
2. People and Culture – improvement across a suite of objectives that create a motivated and highly-engaged workforce. This
includes specific targets for shaping culture and improving engagement along with increasing diversity and building inclusion.
3. Growth – delivering a suite of strategic growth initiatives that support the Company’s overall strategy along with reserves
growth – growing the Company’s reserves base (excluding Tropicana) net of depletion due to mining is a relevant measure,
given the significant tonnes extracted from Nova.
4. Production and financial – delivering strong capital expenditure, operating expenditure and production performance from
the Company’s operated assets.
Details on how the above KPIs were delivered can be found in the Remuneration Report.
EXECUTIVE REMUNERATION AND REWARD REVIEW
In FY19 we have conducted an expanded review on the fixed and “at risk” remuneration structures of the Executive Leadership
Team in preparation for the next three-year cycle of the IGO Total Remuneration Philosophy. Our goal was to ensure that firstly,
IGO remains an employer of choice in a competitive talent market; secondly, that executive remuneration remains closely linked
to a common effort that drives our achievement of strategic objectives; and thirdly, that the alignment of remuneration with the
interests of shareholders is maximised. The structure to achieve this is outlined in this report.
I trust that shareholders will find the 2019 Remuneration Report clearly explains our current remuneration philosophy and
executive outcomes for the period and welcome your feedback in our endeavour to provide ongoing clarity and transparency.
KEITH SPENCE
CHAIR – PEOPLE & PERFORMANCE COMMITTEE
44 — IGO ANNUAL REPORT 2019
DIRECTORS’ REPORT 30 JUNE 2019 REMUNERATION
REPORT (AUDITED)
Key Management Personnel (KMP) of the Group (also referred to as Executive Management) are detailed in the table below and
are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of
the Group, directly or indirectly, including any Director, whether executive or otherwise of the Company.
SECTION 1
2019 OVERVIEW
Section 1 details organisational developments and outcomes in FY19.
SECTION 2
REMUNERATION AT IGO
Section 2 provides an overview of key elements of the Company’s
remuneration governance and philosophy.
SECTION 3
EXECUTIVE REMUNERATION
IN FY19
SECTION 4
NON-EXECUTIVE DIRECTOR
REMUNERATION
SECTION 5
PLANNED REMUNERATION
CHANGES FOR FY20
SECTION 6
STATUTORY REMUNERATION
DISCLOSURES
Section 3 details remuneration arrangements in FY19 for the
following executives:
Keith Ashby - Head of Safety, Health, Environment, Quality (SHEQ) & Risk
Kate Barker – General Counsel
Peter Bradford - Managing Director and CEO
Matt Dusci - Chief Operating Officer
Andrew Eddowes - Head of Corporate Development
Joanne McDonald – Company Secretary and Head of Corporate Affairs
Sam Retallack - Head of People & Culture
Ian Sandl – General Manager - Exploration
Scott Steinkrug – Chief Financial Officer
Section 4 details remuneration and benefits for the Company’s
Non-executive directors (see pages 34 to 35 for details about each
Director) including:
Peter Bilbe - Non-executive Chairman
Debra Bakker - Non-executive Director
Peter Buck - Non-executive Director
Geoffrey Clifford - Non-executive Director
Keith Spence - Non-executive Director
Neil Warburton - Non-executive Director
Section 5 provides an overview of the planned changes in remuneration
and reward FY20 for the Executives and the wider organisation.
Section 6 provides an update for all relevant statutory remuneration
disclosures as required by the Corporations Act 2001.
IGO ANNUAL REPORT 2019 — 45
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019 SECTION 1.
2019 OVERVIEW AND DEVELOPMENTS
FY19 has been an important year for the Company, we have delivered strong operational performance at our Nova Operation,
achieved positive results in the annual employee engagement survey, continued our significant exploration program in the
Fraser Range and Northern Territory, successfully completed the divestment of the Long Operation and continued our strategic
focus to metals critical to clean energy. This performance is the result of our focus on leadership development and our drive to
build a strong and cohesive culture and positions the Company to deliver strong performance in FY20.
FY19 was also the third full year since the implementation of the Company’s Total Rewards Philosophy. This philosophy
recognises that remuneration and reward is not just about the payment of salary, rather a view of benefits that reward and
develop our people to create a holistic value proposition.
To this end, along with Company-wide salary benchmarking and the award of a group wide CPI increment (or consideration of)
for all roles, the following initiatives were implemented for all employees in FY19:
• Improved flexible work options to recognise the importance that the ability to successfully blend work and family
commitments has on employee engagement;
• Broadening of the Company’s equity offering to all employees with the implementation of a salary sacrifice share plan,
including a Company sponsored contribution of up to $2,500 to encourage all employees to share in ownership of the
Company and the connection that drives (participation in the plan excludes KMP);
• Introduction of a Paid Parental Leave program to increase engagement, retention and to facilitate the combination of work
and family responsibilities;
• Further consultative work on operational rosters to ensure the Company maximises operational productivity and individual
employee flexibility;
• Business unit programs to build culture and reinforce the values and behaviours that support our Purpose and drive
sustainable performance; and
• Strengthening and extension of the Company-wide investment in learning, development and training.
At a Board and Executive level, the following changes were made:
• Kate Barker, General Counsel and Joanne McDonald, Company Secretary and Head of Corporate Affairs, were appointed to
the Executive Leadership Team effective 1 July 2018;
• increases in total fixed remuneration (TFR) for KMPs in line with market benchmarking to ensure that Executive fixed
remuneration remained competitive within the comparator and broader industry groups for similar roles; and
• an increase in LTI award for the Chief Operating Officer from 80% to 90% and the Head of People & Culture and Head of SHEQ
& Risk from 50% to 55%. Similarly, for the General Manager-Exploration, Head of Corporate Development, the Company
Secretary and Head of Corporate Affairs and the General Counsel the LTI was increased from 20% to 55% due to a reward
grade reclassification of their roles.
No changes were made to:
• Chairman and Non-executive Director remuneration (for the third year in a row); and
• the STI component of KMP remuneration.
46 — IGO ANNUAL REPORT 2019
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019 SECTION 2.
REMUNERATION AT IGO
2.1 REMUNERATION GOVERNANCE OVERVIEW
The Board recognises that the success of the business depends upon the quality of its people. To ensure the Company
continues to succeed and grow, it must attract, motivate and retain highly skilled Directors, Executives and employees and as
such has an active People & Performance Committee to ensure that people, performance and culture are a priority.
The Committee, chaired by Keith Spence, held four meetings during FY19. Ms Bakker and Messrs Bilbe and Buck are also
Committee members and Messrs Clifford and Warburton were Committee members until 25 October 2018. The Managing
Director was invited to attend all meetings which consider the remuneration strategy of the Group and recommendations in
relation to Executives. The structure of the relationship between the Board, Committee and remuneration principles is explained
in the following table:
BOARD
The Board delegates responsibility in relation to remuneration
to the People & Performance Committee (Committee)
which operates in accordance with the Company’s People &
Performance Committee Charter and the requirements of the
Corporations Act 2001 and its regulations.
PEOPLE & PERFORMANCE COMMITTEE
IGO REMUNERATION PRINCIPLES
The Committee is made up entirely of independent
non-executive directors. The Committee is charged with
assisting the Board by reviewing, on an annual basis, and
making appropriate recommendations on the following:
Remuneration policy is transparent with information
communicated to all employees to create a high level of
understanding of the link between pay, performance and
delivery against Company objectives and values.
• the Company’s remuneration policy and structure, to ensure
that it remains aligned to business needs and meets the
Company’s remuneration principles;
• Executive remuneration policy for KMP;
• equity-based remuneration plans for KMP and other
employees;
“At Risk” components are designed to motivate and
incentivise for high performance and are aligned with the
Company’s strategic and business objectives to create
short and long-term shareholder value.
Learning and development is a quantifiable and
essential component of all roles.
• diversity and culture strategy, policy, practices and
performance;
Career planning is a valued component of the total reward
philosophy and forms part of all development plans.
• superannuation arrangements for the organisation; and
• remuneration equity for all employees across the Group.
Work/life programs aim to provide balance and
additional value for people at all levels of the organisation.
Equity in the business is important for all employees
and prioritised when setting and reviewing remuneration
policy and practice.
EXTERNAL ADVICE AND BENCHMARKING
The Committee undertakes a broad review of data derived from
remuneration consultants who track industry levels to ensure it is
fully informed when making remuneration decisions.
During the year ended 30 June 2019, no remuneration
recommendations, as defined by the Corporations Act 2001, were
provided by remuneration consultants. However, the Committee
did utilise data provided by AON Hewitt McDonald ($5,030),
Mercer Consulting ($4,700) and BDO Reward (WA) Pty Limited
($7,400) regarding salaries and benefits across the organisation
and a third-party benchmark of the CEO Remuneration.
Further information on the Committee’s role, responsibilities and membership can be found at www.igo.com.au.
IGO ANNUAL REPORT 2019 — 47
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019
SECTION 3.
EXECUTIVE REMUNERATION IN FY19
COMPONENTS OF EXECUTIVE REMUNERATION AT IGO
Executive remuneration at IGO is comprised of fixed and at risk components, as an integrated package, the purpose of which
is to align executive reward with shareholder outcomes, executive performance and the retention of key talent. TFR and at risk
remuneration is benchmarked annually by the People & Performance Committee.
The table below provides an overview of the different remuneration components within the IGO framework.
OBJECTIVE
Attract and retain
the best talent
Reward current year
performance
Reward long-term
sustainable performance
Performance related remuneration (at risk)
REMUNERATION
COMPONENT
Total Fixed Remuneration
(TFR) – includes salary and
superannuation
Short-term incentive (STI) –
paid as cash and service rights
Long-term incentive (LTI) –
paid as performance rights
PURPOSE
TFR provides competitive
‘guaranteed’ remuneration with
reference to;
• size and complexity of the
role
• individual responsibilities and
performance; and
• experience and skills.
The STI ensures appropriate
differentiation of pay for
performance, for achievement
of a combination of Company
and Individual KPIs to drive
achievement of near-term
strategic objectives and
retention.
The LTI is focused on the
achievement of mid to long-
term shareholder return
through the Company’s long-
term strategic objectives and
retention.
TOTAL REALISED EARNINGS FOR KMP IN FY19
The following pages provide details of the actual remuneration earned during FY19 for KMP. Amounts include:
• Total fixed remuneration received;
• The cash component of the STI earned as a result of business and individual performance for FY19;
• Ordinary shares received as a component of the STI service rights that vested during the year; and
• Performance rights that vested during the year.
Peter Bradford
$860,000
$241,000
$553,300
$106,696
Keith Ashby
$360,000
$51,500
$22,560 $49,279
Kate Barker
$340,000
$49,000 $20,345 $20,698
Matt Dusci
$530,000
$108,500 $42,370
$158,244
Andrew Eddowes
$370,000
$53,000 $30,200 $48,469
Joanne McDonald
$340,000
$49,000 $20,272
$26,946
Sam Retallack
$360,000
$51,500
$22,560 $49,279
Ian Sandl
$370,000
$53,000
Scott Steinkrug
$450,000
$92,500 $40,240 $158,244
TFR
STI Cash
Service Rights vested
Performance Rights vested
48 — IGO ANNUAL REPORT 2019
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019
KMP AT RISK REMUNERATION IN FY19
The Company believes that at risk components are important elements of remuneration for all employees in the business to
drive the achievement of key strategic initiatives and maintain alignment between employees and creation of sustainable
shareholder value.
The mix of fixed and at risk remuneration varies depending on the role and reward grading of Executives. It also depends on the
performance of both the Company and the individual.
The following is an overview of the total fixed and at risk remuneration for Executive KMP in FY19:
Managing Director
and CEO
Chief Operating
Officer and Chief
Financial Officer
TFR – 36%
TFR – 42%
Other executive KMP
TFR – 53%
CLAWBACK PROVISION
STI – 25%
LTI – 39%
STI – 21%
LTI – 37%
STI – 18%
LTI – 29%
In FY17, IGO introduced a clawback provision for any unvested STI and LTI awards in the case of fraud, dishonesty, gross
misconduct or a material misstatement of the financial statements and subject to Board discretion.
IGO STIP OUTLINE FOR FY19
An outline of the key elements of the Short-Term Incentive Program (STIP) as it relates to the Company’s KMP is provided below:
STIP
OPPORTUNITY
The STIP opportunity offered to each Executive as a percentage of TFR is defined by the individual’s role and reward grade.
The STIP opportunity is market benchmarked and reviewed by the Board annually.
STIP payments are awarded 50% cash and 50% equity (service rights) on or above threshold performance against a range of
business objectives (Company KPI) and individual performance objectives (Individual KPI).
PERFORMANCE
TARGETS
The payment of a short-term incentive to KMP is an at risk component of the individual’s total remuneration given that a set of
performance targets must be met prior to payment. These targets are based on metrics that are measurable, transparent, and
achievable, designed to motivate and incentivise the recipient to achieve high performance aligned with Company objectives
and near-term shareholder value creation.
PERFORMANCE
ASSESSMENT
The Company employs a system of continuous performance feedback to drive performance throughout the year, however a
final performance assessment occurs annually following the completion of the financial year for each Executive. Executives
are assessed on their contribution to the achievement of Company KPIs (80%), individual KPIs (20%) and their demonstrated
support for the Company’s values.
MEASUREMENT
PERIOD
STIP DEFERRAL
COMPONENT
The STIP program is an annual program and operates from 1 July to 30 June each year.
The service rights component of the STI vest in two tranches, with the first tranche of 50% vesting on the 12 month
anniversary of the STI award date, and the second tranche of 50% on the 24 month anniversary of the STI award date.
Vesting of the service rights component of the STI granted to Executive KMP is based on a continuous service condition
being met and is designed to act as a driver of retention and medium-term value creation.
CESSATION OF
EMPLOYMENT
In the event that the Executive’s employment with IGO terminates prior to the vesting of all service rights, outstanding
unvested rights will be reviewed by the Board and may or may not vest depending on the circumstances of the Executive’s
cessation of employment.
BOARD
DISCRETION
The payments of all STIs are subject to Board approval. The Board has the discretion to adjust remuneration outcomes higher
or lower to prevent any inappropriate reward outcomes, including reducing (down to zero, if appropriate) any STI payment.
IGO ANNUAL REPORT 2019 — 49
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019 HOW PERFORMANCE WAS LINKED TO STIP OUTCOMES IN FY19
As part of the annual business planning process the Board determines the KPIs to reflect targets for the key strategic drivers of
the business for the following year. The KPIs and performance achieved against them for FY19 are listed in the table below:
Key Result Area
Rationale for inclusion
Performance and commentary
SAFETY, HEALTH, ENVIRONMENT AND
COMMUNITY
10% weighting
10% achieved
• Year-on-year improvement in safety
related metrics in the Engagement Survey
• Year-on-year improvement in Group TRIFR
• Group HSEC strategic actions including:
A range of backward and forward-looking
measures focuses performance on metrics
that go directly and indirectly to efficiently and
effectively managing the risks inherent in the
Company’s operations.
–
–
–
–
–
rewrite of IGO’s Group Safety Standards
(https://www.igo.com.au/site/work-
with-us/suppliers-information);
the ongoing promotion of IGO’s visual
safety leadership program;
the introduction of an enterprise risk
management system;
the introduction of a Mental Health &
Wellbeing Strategy; and
the implementation of a community
engagement strategy.
Above target performance was achieved for:
• Safety related metrics in the Engagement
Survey – achieved 90% (Target = 86%)
• Group TRIFR – achieved 9.58 (Target = 14.18)
• Group HSEC strategic actions all completed
to plan.
PEOPLE AND CULTURE
15% weighting
10% achieved
Deliver year-on-year improvement in:
• Annual Engagement Survey Score
• Diversity metrics for the female and
aboriginal employment across the business.
Engagement and diversity metrics are
designed to focus achievement on key
strategic people enablers and programs of
work that result in a workforce that has the
motivation, skills and capabilities to drive the
delivery of the Company’s strategic plan.
The Company achieved above target
performance for the Engagement Survey score:
Engagement Survey Score 70% (Target = 60%)
Targets for the delivery of year-on-year
improvement for diversity metrics were
challenged throughout the year resulting in:
• 25% Female employment (Target = 32.5%)
• 3% Aboriginal employment (Target = 3.5%)
Although improvement was challenged in
overall gender and aboriginal employment
significant improvement was achieved in the
promotion and development of women across
the business where 27% of internal promotions
were awarded to female candidates and 60% of
manager roles were awarded to internal female
candidates.
GROWTH/STRATEGY*
30% weighting
25% achieved
Complete nominated number of agreed
strategic priorities.
Outlines performance achieved to deliver
a suite of strategic initiatives, brownfields/
greenfields opportunities and value accretive
M&A opportunities important to growing
shareholder value along with performance in
achieving the organic growth of current assets.
Good progress achieved for all strategic
priorities
PRODUCTION
25% weighting
25% achieved
Achieve consolidated production targets for
Nova on a nickel metal equivalent basis
Target = 42,577 tonnes
Delivery of strong production performance is a
key enabler to funding the achievement of the
Company’s strategic plan.
The production outcome of 43,951 nickel
metal equivalent tonnes achieved at Nova
represented a strong operational result in
excess of the target performance for FY19.
FINANCIAL
20% weighting
10% achieved
Achieve consolidated capital and operating
costs (production and non-production) for
the Group
Strong budgeting and financial management
is a key enabler to funding the achievement of
the Company’s strategic plan.
Target = $343M total capital and operating
costs
Achieved better than targeted capital costs but
did not achieve targeted operating costs:
• Capital $42.3M (Target = $54.1M)
• Operating $338M (Target = $289M)
Total weighting 100%
Total outcome 80%
*Due to the sensitive nature of some corporate KPIs the full detail on measures and achievement is confidential.
KRA measure achieved
KRA measure partially achieved
KRA measure not met
50 — IGO ANNUAL REPORT 2019
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019 GATING RELATING TO PAYMENT OF STI FOR FY19
COMPANY SCORECARD GATING
• No Production or Financial component in the event of Company NPAT being negative before abnormals.
• No Growth/Strategy component in the event of a material downward restatement of the previous year’s Reserves.
• No Safety, Health, Environment and Community or People and Culture component in the event of a fatality, permanent
disabling injury and/or material environmental breach.
INDIVIDUAL KPI GATING
No individual component in the event of a material breach of the Company’s Code of Conduct by the individual.
FY19 STIP OUTCOMES
Name
Position
Peter Bradford
Managing Director
Keith Ashby
Head of SHEQ & Risk
Kate Barker4
General Counsel
Matt Dusci
Chief Operating Officer
Andrew Eddowes
Head of Corporate Development
Joanne McDonald4
Company Secretary and Head of Corporate Affairs
Sam Retallack
Head of People & Culture
Ian Sandl
General Manager - Exploration
Scott Steinkrug
Chief Financial Officer
FY19
Potential
STI %1
FY19
Declared
$2
FY18
Potential
STI %3
FY18 Paid
$
70
35
35
50
35
35
35
35
50
482,000
103,000
98,000
217,000
106,000
98,000
103,000
106,000
185,000
70
35
-
50
35
-
35
35
50
364,000
78,155
-
159,500
82,307
-
76,685
69,659
142,850
1.
2.
3.
4.
% of TFR (base salary plus superannuation).
To be paid in August 2019 - 50% in cash and 50% in service rights (vesting in equal parts in September 2020 and September 2021).
Paid in September 2018 - 50% in cash and 50% in service rights (vesting in equal parts in September 2019 and September 2020).
Ms Barker and Ms McDonald were appointed to the Executive Leadership Team effective 1 July 2018.
IGO ANNUAL REPORT 2019 — 51
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019 IGO LTIP OUTLINE FOR FY19
An outline of the key elements of the Company’s Long-Term Incentive Program (LTIP), as it relates to the Company’s KMP, is
provided below:
LTIP OPPORTUNITY
The LTIP opportunity is determined by the Executive’s role within the business and is awarded by the offer of a number of
performance rights based on a percentage of TFR. The LTIP opportunity for each individual KMP is outlined on page 56.
PERFORMANCE
HURDLES
For performance rights issued in FY19 there are two equally weighted performance hurdles utilising the following
measures:
1. relative TSR; and
2. absolute TSR.
VESTING OF
PERFORMANCE
RIGHTS
Vesting of the performance rights granted to Executive KMP is based on a continuous service condition and
performance conditions as detailed below.
SERVICE CONDITIONS Performance rights are subject to a service condition. This condition is met if the KMP’s employment with IGO is
continuous for three years commencing on or around the grant date and is aimed at the retention of key personnel.
PERFORMANCE
CONDITIONS FOR
PERFORMANCE
RIGHTS
Relative TSR
The TSR scorecard for the three year measurement period is determined based on a percentile ranking of the
Company’s TSR results relative to the TSR of each of the companies in the peer group over the same three year
measurement period.
The Board considers that relative TSR is an appropriate performance hurdle because it ensures that a proportion of
each participant’s remuneration is linked to the return received by shareholders from holding shares in a company in
the peer group for the same period.
Absolute TSR
The increase in the Company’s absolute TSR will be measured over a three year period.
The Board considers that absolute TSR is an appropriate performance hurdle because it ensures KMP performance is
rewarded when a year-on-year improvement in shareholder value is achieved.
VESTING
SCHEDULE
Relative TSR
The vesting schedule of the performance rights subject to relative TSR testing is as follows:
Relative TSR performance
Less than 50th percentile
Level of vesting
Zero
Between 50th and 75th percentile
Pro-rata straight line percentage between 50% and 100%
75th percentile or better
100%
Absolute TSR
The vesting schedule of the performance rights subject to absolute TSR testing is as follows:
Absolute TSR performance
10% per annum return
% of Performance Rights that will vest
33%
Above 10% per annum and below 20% per annum return
Pro-rata straight line percentage between 33% and 100%
Above 20% per annum return
100%
Testing occurs three years from 1 July of the relevant financial year.
In the event that the KMP’s employment with IGO terminates prior to the vesting of all performance rights, outstanding
unvested rights will be reviewed by the Board and may or may not vest depending on the circumstances of the
cessation of employment.
MEASUREMENT
PERIOD
CESSATION OF
EMPLOYMENT
BOARD DISCRETION
The Board has absolute discretion to adjust performance rights vesting if, on assessment, absolute TSR is negative
over the performance period.
PEER GROUP
The Company’s relative TSR performance for performance rights issued during FY19 will be assessed against all
members of the S&P ASX 300 Metals and Mining Index.
LTI - NON-EXECUTIVE
DIRECTORS
The overarching Employee Incentive Plan (EIP) permits non-executive directors to be eligible employees and therefore
to participate in the plan. It is not currently intended that non-executive directors will be issued with share rights under
the EIP and any such issue would be subject to all necessary shareholder approvals.
52 — IGO ANNUAL REPORT 2019
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019 FY19 LTIP OUTCOMES
Name
Position
Peter Bradford
Managing Director
Keith Ashby
Head of SHEQ & Risk
Kate Barker4
General Counsel
Matt Dusci
Chief Operating Officer
Andrew Eddowes5
Head of Corporate Development
Joanne McDonald4
Company Secretary and Head of Corporate Affairs
Sam Retallack
Head of People & Culture
Ian Sandl5
General Manager - Exploration
Scott Steinkrug
Chief Financial Officer
Number of performance
rights issued for FY19 period1
Number of performance
rights issued for FY18 period2
218,4753
45,727
43,187
110,161
47,251
43,187
45,727
46,997
83,140
266,667
53,031
-
121,213
22,131
-
53,031
22,182
109,091
1.
2.
3.
4.
5.
Performance rights awarded at 20 day VWAP to 23 August 2018 of $4.33.
Performance rights awarded at 20 day VWAP to 25 August 2017 of $3.30.
Approved by shareholders at the 2018 Annual General Meeting.
Ms Barker and Ms McDonald were appointed to the Executive Leadership Team effective 1 July 2018.
Mr Eddowes and Mr Sandl were appointed to the Executive Leadership Team effective 1 February 2018. Performance rights reflect total number issued for FY18.
APPROVED BY SHAREHOLDERS AT THE 2016 ANNUAL GENERAL MEETING
The Independence Group NL Employee Incentive Plan (EIP) was approved by shareholders at the Annual General Meeting in
November 2016.
The number of eligible products able to be issued under the EIP is limited to 5% of the issued capital of the Company. The 5% limit
includes grants under all plans made in the previous three years (with certain exclusions under the Corporations Act 2001). At the
end of FY19 this percentage stands at 0.62%. There are no voting or dividend rights attached to the share rights.
IGO ANNUAL REPORT 2019 — 53
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019 SECTION 4.
NON-EXECUTIVE DIRECTOR REMUNERATION
The remuneration of Non-executive Directors is determined by the Board within the maximum amount approved by
shareholders in general meeting. Non-executive Directors are not entitled to retirement benefits other than statutory
superannuation or other statutory required benefits. Non-executive Directors do not participate in share or bonus schemes
designed for Executive Directors or employees.
TOTAL REALISED EARNINGS
Name
Debra Bakker
Peter Bilbe
Peter Buck
Geoffrey Clifford
Keith Spence
Neil Warburton
Total non-executive director remuneration
Year
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
Cash fees
$
Superannuation
$
123,288
115,297
210,046
215,373
123,288
123,288
118,721
121,385
123,288
123,288
109,589
109,589
808,220
808,220
11,712
10,953
19,954
20,460
11,712
11,712
11,279
11,532
11,712
11,712
10,411
10,411
76,780
76,780
Total
$
135,000
126,250
230,000
235,833
135,000
135,000
130,000
132,917
135,000
135,000
120,000
120,000
885,000
885,000
The remuneration of Non-executive Directors is fixed to encourage impartiality, high ethical standards and independence on
the Board. The available Non-executive Directors’ fees pool is $1,500,000 which was approved by shareholders at the Annual
General Meeting on 16 December 2015, of which $885,000 was being utilised at 30 June 2019 (2018: $885,000).
Non-executive Directors may provide additional consulting services to the Group, at a rate approved by the Board. No such
amounts were paid to Directors during the current or prior year.
In FY19 the Board resolved, for a third consecutive year, not to increase Non-executive Directors’ fees. There was market
evidence to support an increase to the remuneration for the Chairman for FY19, however the Board resolved not to make any
adjustment to the Chairman’s remuneration for FY19.
For FY20 the annual benchmark review of Board fees indicated reasonable grounds for a review of Board remuneration.
Based on market data from both the IGO peer group and the market more broadly the Board has approved an increase to the
remuneration for both the Chairman and Committee Chairs, however has resolved not to make any adjustment to Non-executive
Director base remuneration for FY20.
Details of Non-executive Director fees are as follows:
Non-executive Director base fees
Board Chairman
Board Member
Board Member Committee Fees
Chair Audit Committee
Chair People & Performance Committee
Chair Sustainability & Risk Committee
Chair Nomination & Governance Committee
Committee Members
54 — IGO ANNUAL REPORT 2019
Approved
2020
250,000
120,000
20,000
20,000
20,000
20,000
Nil
30 June
2019
230,000
120,000
15,000
15,000
15,000
10,000
Nil
30 June
2018
230,000
120,000
15,000
15,000
15,000
10,000
Nil
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019 SECTION 5.
PLANNED REMUNERATION CHANGES FOR FY20
The Board and Executive team appreciate the importance of competitive remuneration however also recognise that sustained
and enduring performance can only be achieved through a strong culture, an individual’s connection to their team and a clearly
defined organisational purpose. This culture underpins our ability to create long-term value for our stakeholders and generate
long-term, sustainable returns for our shareholders.
In FY20, teams across the Company will continue the structured programs of work in progress to build the culture and
capabilities required for the future. The Company will place greater emphasis on talent identification and development
of existing employees, along with programs for the identification of world class external talent to build a broader base of
opportunities for finding talented people at all levels. In FY20, we will also expand our Graduate Program to build “home grown”
capability across a broader range of disciplines beyond traditional pathways, along with growing our Vacation Program to
increase the feeder route to the Graduate path.
Looking forward, speed of learning and the development of a range of “non-traditional” skills with our people that include
emotional intelligence, creativity, cognitive flexibility and critical thinking will be key in the preparation of our people for the
future of work. In FY20, we intend to continue to build the IGO culture with work in developing our values, supporting behaviours
and an IGO specific leadership model.
The Company reviews all remuneration practices annually. As a result of the review conducted in FY19, a number of changes will
be implemented for FY20, with effect from 1 July 2019. Completed changes and/or progress towards remuneration objectives
will be reported in more detail in the 2020 Remuneration Report, however a summary of the key elements of the proposed FY20
program are provided below:
GROUP-WIDE
REMUNERATION
• Review of group-wide remuneration benchmarking and award of a group-wide CPI increment (or
consideration of) for all roles was awarded in August 2019.
• No group-wide change in STI or LTI programs or opportunities for FY20.
• Further enhancement of the Company’s equity offering to all employees with the expansion of a
salary sacrifice share plan to include a Company sponsored one-for-one contribution of up to
$5,000 (FY19: $2,500) to encourage all employees to share in ownership of the Company and the
connection that drives.
• A continued focus on operational rosters to ensure the Company maximises operational productivity
while focused on individually flexible work options.
KMP TFR
• The TFR for the Managing Director will increase by 1.16% from $860,000 to $870,000 to reflect market
movement in comparator CEO fixed remuneration.
• The TFR for the COO will increase from $530,000 to $560,000.
• Other increases in TFR for Executive KMPs are in line with market benchmarking and are structured
to ensure that Executive fixed remuneration remains competitive within the comparator and broader
industry groups for similar roles (see page 56).
REVIEW OF INCENTIVE
ARRANGEMENTS
Following the completion of the three-year cycle a comprehensive review was completed in FY19 with
a decision by the Board to maintain the components of the KMP incentive arrangements currently
in place. There was also agreement by the Board to alter the reporting structure of the STI and LTI
programs in favour of an increased weighting to the long-term incentive. All other elements of the
Company’s Total Reward Program will remain unchanged as they are deemed to be both competitive
and appropriate in mobilising the required performance and behaviours for KMP and IGO employees
to maximise shareholder value.
Prior to the issue of any LTI for FY20, the Board will review and approve the performance conditions
and comparator group for the award. Further details of any changes made will be provided in the FY20
Remuneration Report.
LONG-TERM
INCENTIVE
Along with changes to the classification of service rights into the LTIP there will be some minor
adjustments in LTI levels for KMP actioned for FY20 (see page 56). All changes to the LTIP are designed
to achieve a better balance between the weighting of STIs and LTIs to drive an increased connection
between and focus on long-term value creation and retention of the executive team.
IGO ANNUAL REPORT 2019 — 55
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019 The following table reflects remuneration changes available to Executives for FY20, effective 1 July 2019:
Name
Position
Total Remuneration FY20
Total Remuneration FY19
TFR $
STI %
LTI %
TFR $
STI %
Peter Bradford
Managing Director
Keith Ashby
Head of SHEQ & Risk
Kate Barker
General Counsel
Matt Dusci
Chief Operating Officer
870,000
370,000
350,000
560,000
Andrew Eddowes
Head of Corporate Development
380,000
Joanne McDonald
Company Secretary and Head of
Corporate Affairs
350,000
Sam Retallack
Head of People & Culture
370,000
Ian Sandl
General Manager - Exploration
400,000
Scott Steinkrug
Chief Financial Officer
460,000
50
25
25
40
25
25
25
25
25
150
75
75
120
75
75
75
75
860,000
360,000
340,000
530,000
370,000
340,000
360,000
370,000
105
450,000
70
35
35
50
35
35
35
35
50
LTI %
110
55
55
90
55
55
55
55
80
COMPANY PERFORMANCE
A key and continued focus for the Board and Company is to align Executive remuneration to the achievement of strategic and
business objectives of the Group and the creation of shareholder value. The table below illustrates a summary of the Group’s
financial performance over the last five years as required by the Corporations Act 2001.
Revenue ($ millions)
Profit (loss) for the year attributable to owners ($ milions)
Dividend payments (cents per share)
Share price at year end ($ per share)
2019
784.5
76.1
4.0
4.72
2018
777.9
52.7
2.0
4.17
2017
421.9
17.0
3.0
3.15
2016
413.2
(58.8)
2.5
3.28
2015
495.3
76.8
11.0
4.17
56 — IGO ANNUAL REPORT 2019
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019 SECTION 6.
STATUTORY REMUNERATION DISCLOSURES
EXECUTIVE CONTRACTS
Remuneration and other terms of employment for the Executives are formalised in service agreements. The service agreements
specify the components of remuneration, benefits and notice periods. Participation in the STI and LTI plans is subject to the
Board’s discretion. Other major provisions of the agreements relating to remuneration are set out below.
Name
Position
Term of
agreement
Base Salary
including
superannuation
at 1 July 2019
Notice
period
Termination
Benefit
Peter Bradford
Managing Director/CEO
No fixed term
870,000
6 months
6 months1
Keith Ashby
Head of SHEQ & Risk
No fixed term
370,000
3 months
6 months
Kate Barker
General Counsel
No fixed term
350,000
3 months
6 months
Matt Dusci
Chief Operating Officer
No fixed term
560,000
3 months
6 months
Andrew Eddowes
Head of Corporate Development
No fixed term
380,000
3 months
6 months
Joanne McDonald
Company Secretary and Head of Corporate Affairs No fixed term
350,000
3 months
6 months
Sam Retallack
Head of People & Culture
No fixed term
370,000
3 months
6 months
Ian Sandl
General Manager - Exploration
No fixed term
400,000
3 months
6 months
Scott Steinkrug
Chief Financial Officer
No fixed term
460,000
3 months
6 months
1.
In addition to the above, Mr Bradford is entitled to a maximum termination benefit payable of up to 12 months of average annual base salary should the
Company terminate the employment contract without cause, but only if such payment would not breach ASX Listing Rules. A termination benefit of three
month’s remuneration is payable to Mr Bradford should the Company terminate the employment contract due to illness, injury or incapacity.
(I) REMUNERATION EXPENSES FOR EXECUTIVE KMP
The following table shows the value of earnings realised by executive KMP during FY19. The cash value of earnings realised
includes cash salary, superannuation and cash bonuses earned during the year, plus the intrinsic value of service rights and
performance rights vested during the financial year.
This is in addition and different to the disclosures required by the Corporations Act and Accounting Standards, particularly in
relation to share rights. As a general principle, the Accounting Standards require a value to be placed on share rights based on
probabilistic calculations at the time of grant, which may be reflected in the Remuneration Report even if ultimately the share
rights do not vest because performance and service hurdles are not met. By contrast, this table discloses the intrinsic value
of share rights, which represents only those share rights which actually vest and result in shares issued to a KMP. The intrinsic
value is the Company’s closing share price on the date of vesting.
Remuneration received during the period
Name
Peter Bradford
Keith Ashby
Kate Barker
Matt Dusci
Andrew Eddowes
Joanne McDonald
Sam Retallack
Ian Sandl
Scott Steinkrug
TFR $1
860,000
360,000
340,000
530,000
370,000
340,000
360,000
370,000
450,000
STI Cash
Component
$ Value2
STI Vested Service
Rights Component
$ Value
LTI Vested Share
Rights Component
$ Value
241,000
51,500
49,000
108,500
53,000
49,000
51,500
53,000
92,500
106,696
22,560
20,345
42,370
30,200
20,272
22,560
-
40,240
553,300
49,279
20,698
158,244
48,469
26,946
49,279
-
158,244
Total Actual
Remuneration
$ Value
1,760,996
483,339
430,043
839,114
501,669
436,218
483,339
423,000
740,984
1.
2.
Includes base salary and superannuation.
Represents the amounts to be paid in August 2019 for performance in FY19.
IGO ANNUAL REPORT 2019 — 57
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019 The following table shows details of the remuneration expense recognised for the Group’s KMP for the current and previous
financial year measured in accordance with the requirements of the Accounting Standards.
Name
Year
Cash salary
and fees1
$
Cash
bonus2
$
Super-
annuation
$
Long service
leave3
$
Share
rights4
$
Total Performance
Related
%
$
Executive Directors
Peter Bradford
2019
2018
Other key management personnel
Keith Ashby
Kate Barker5
Rob Dennis6
Matt Dusci
Andrew Eddowes7
2019
2018
2019
2018
2019
2018
2019
2018
786,877
241,000
25,000
23,795
707,930
1,784,602
768,158
182,000
25,000
22,113
595,593
1,592,864
343,623
51,500
25,000
9,048
132,244
561,415
332,682
39,078
25,000
8,092
80,028
484,880
316,689
49,000
25,000
18,039
89,757
498,485
406,077
-
20,833
(23,779)
209,694
612,825
516,497
108,500
25,000
15,549
297,588
963,134
486,057
79,750
25,000
15,123
184,288
790,218
361,167
53,000
25,000
(18,797)
113,021
533,391
Joanne McDonald8
2019
317,100
49,000
25,000
135,362
41,154
10,417
3,495
9,387
27,180
217,608
93,416
493,903
Sam Retallack
Ian Sandl9
Scott Steinkrug
Total executive
directors and
other KMPs
Total NED
remuneration
(see page 54)
Total KMP
remuneration
expensed
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
337,833
51,500
25,000
14,764
131,803
560,900
335,173
38,343
25,000
13,392
80,028
491,936
348,786
53,000
25,000
3,664
77,428
507,878
150,163
34,830
12,506
515
5,820
203,834
427,409
92,500
25,000
10,617
258,739
814,265
428,457
70,425
25,000
23,082
174,412
721,376
3,755,981
749,000
225,000
86,066
1,901,926
6,717,973
3,042,129
485,580
168,756
62,033
1,357,043
5,115,541
808,220
808,220
-
-
76,780
76,780
-
-
-
-
885,000
885,000
4,564,201
749,000
301,780
86,066
1,901,926
7,602,973
3,850,349
485,580
245,536
62,033
1,357,043
6,000,541
53
49
33
25
28
34
42
33
31
31
29
33
24
26
20
43
34
1.
2.
3.
4.
5.
6.
7.
8.
9.
Cash salary and fees includes movements in annual leave provision during the year.
Cash bonus represents bonuses that were awarded to each KMP in relation to FY19 and will be paid in September 2019 (2018: Related to FY18 and paid in
September 2018). Cash bonus excludes superannuation contribution component of STI which is shown in Post-employment benefits where applicable.
Long service leave relates to movements in long service leave provision during the year.
Rights to shares granted under the EIP are expensed over the performance period, which includes the vesting period of the rights, in accordance with AASB2
Share-based Payment. Refer to note 25 for details of the valuation techniques used for the EIP.
Ms Barker was appointed to the Executive Leadership Team effective 1 July 2018.
Mr Dennis resigned effective 30 April 2018. An amount of $91,270 accrued for annual leave was paid out on termination, this amount has been offset against the
movement in the provision for the 2018 financial year.
Mr Eddowes was appointed to the Executive Leadership Team on 1 February 2018. Remuneration for FY18 has been included from the date of his
appointment as a KMP.
Ms McDonald was appointed to the Executive Leadership Team effective 1 July 2018.
Mr Sandl was appointed to the Executive Leadership Team on 1 February 2018. Remuneration has been included from the date of his appointment as a KMP.
58 — IGO ANNUAL REPORT 2019
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019
ADDITIONAL STATUTORY INFORMATION
(II) PERFORMANCE BASED REMUNERATION GRANTED AND FORFEITED DURING THE YEAR
The table below shows for each KMP how much of their STI cash bonus was awarded and how much was forfeited. It also shows
the value of performance rights that were granted, vested and forfeited during FY19. The number of performance rights and
percentages vested/forfeited for each grant are disclosed in the table on page 60.
Total STI bonus (cash and service rights)
LTI performance rights
Total
opportunity
$
Awarded1
$
Awarded
%
Forfeited
%
Value
granted2
$
Value
vested3
$
Value
forfeited3
$
2019
Executive Directors
Peter Bradford
602,000
482,000
Keith Ashby
Kate Barker
Matt Dusci
126,000
103,000
119,000
98,000
265,000
217,000
Andrew Eddowes
129,500
106,000
Joanne McDonald
119,000
98,000
Sam Retallack
126,000
103,000
Ian Sandl
129,500
106,000
Scott Steinkrug
225,000
185,000
80
82
82
82
82
82
82
82
82
20
18
18
18
18
18
18
18
18
473,384
171,996
167,917
128,656
121,509
309,945
132,944
121,509
128,656
132,229
11,732
4,928
37,675
11,540
6,415
11,732
-
11,453
4,812
36,781
11,265
6,262
11,453
-
233,920
37,675
36,781
1.
2.
Payable 50% in cash and 50% in service rights (vesting in equal parts in September 2020 and September 2021).
The value at grant date for share rights granted during the year as part of remuneration is calculated in accordance with AASB 2 Share-based Payment. Refer
to note 25 for details of the valuation techniques used for the EIP.
3.
Value of shares vested and forfeited is based on the value of the share rights at grant date.
(III) TERMS AND CONDITIONS OF THE SHARE-BASED PAYMENT ARRANGEMENTS
Share rights under the Company’s EIP
Share rights under the Company’s EIP are granted annually. The shares vest after three years from the start of the financial
year, subject to meeting certain performance conditions. On vesting, each right automatically converts into one ordinary share.
The Executives do not receive any dividends and are not entitled to vote in relation to the rights during the vesting period. If
an Executive ceases employment before the rights vest, the rights will be forfeited, except in certain circumstances that are
approved by the Board.
The value at grant date for share rights granted during the year as part of remuneration is calculated in accordance with AASB 2
Share-based Payment. Refer to note 25 for details of the valuation techniques used for the EIP.
Grant date
Vesting date
Grant date value
Performance achieved
% Vested
20 November 2018
28 September 2018
24 November 2017
29 September 2017
22 May 2017
24 November 2016
18 November 2016
22 January 2016
16 December 2015
1 July 2021
1 July 2021
1 July 2020
1 July 2020
1 July 2019
1 July 2019
1 July 2019
1 July 2018
1 July 2018
$2.17
$2.81
$3.14
$2.29
$2.30
$2.26
$2.21
$1.20
$1.56
To be determined
To be determined
To be determined
To be determined
To be determined
To be determined
To be determined
Between 50th and 75th percentile
Between 50th and 75th percentile
n/a
n/a
n/a
n/a
n/a
-
-
50.6
50.6
IGO ANNUAL REPORT 2019 — 59
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019
Rights to service rights
Rights to service rights issued under the EIP are granted following the determination of the final performance measure for the
performance year. The service rights component of the STI vest in two tranches, with the first tranche of 50% vesting on the 12
month anniversary of the award date, and the second tranche of 50% vesting on the 24 month anniversary of the award date.
The Executives do not receive any dividends and are not entitled to vote in relation to the rights during the vesting period. If
an Executive ceases employment before the rights vest, the rights will be forfeited, except in limited circumstances that are
approved by the Board on a case-by-case basis.
The fair value of the rights is determined based on the 5 day VWAP of the Company’s shares after release of the IGO financial statements.
Grant date
% Vesting
Vesting date
Grant date value
5 October 2018
9 October 2017
50%
50%
50%
50%
2 September 2019
1 September 2020
3 September 2018
1 September 2019
$4.21
$4.21
$3.51
$3.51
(IV)
RECONCILIATION OF LTI PERFORMANCE RIGHTS, SERVICE RIGHTS AND ORDINARY SHARES HELD BY KMP
Performance rights
The table below shows the number of LTI performance rights that were granted, vested and forfeited during the year.
Balance
at start of
the year
Granted
during
the year
Vested during
the year
Forfeited during
the year1
Balance at the
end of the year
(unvested)
Maximum
value yet
to vest
Number
Number
Number
%
Number
2019
Name and
grant dates
Year
granted
Peter Bradford
2019
-
218,475
Keith Ashby
Kate Barker
Matt Dusci
2018
2017
2016
2019
2018
2017
2016
2019
2018
2017
2016
2019
2018
2017
2016
266,667
135,000
217,391
-
-
-
-
45,727
53,031
17,000
19,361
-
-
-
-
43,187
17,371
10,157
8,133
0
-
-
-
110,161
121,213
41,000
62,174
-
-
-
Andrew Eddowes
2019
-
47,251
Joanne
McDonald
Sam Retallack
2018
2017
2016
2019
2018
2017
2016
2019
2018
2017
2016
22,131
16,000
19,043
-
-
-
-
43,187
17,819
14,000
10,568
-
-
-
-
45,727
53,031
17,000
19,361
-
-
-
60 — IGO ANNUAL REPORT 2019
-
-
-
-
-
-
-
-
-
%
-
-
-
Number
218,475
266,667
135,000
110,000
50.6
107,391
49.4
-
-
-
-
-
-
-
-
-
-
-
-
9,797
50.6
9,564
49.4
-
-
-
-
-
-
-
-
-
-
-
-
4,115
50.6
4,018
49.4
-
-
-
-
-
-
-
-
-
-
-
-
31,460
50.6
30,714
49.4
-
-
-
-
-
-
-
-
-
-
-
-
9,636
50.6
9,407
49.4
-
-
-
-
-
-
-
-
-
-
-
-
5,357
50.6
5,229
49.4
-
-
-
-
-
-
-
-
-
-
-
-
9,797
50.6
9,564
49.4
-
45,727
53,031
17,000
-
43,187
17,371
10,157
-
110,161
121,213
41,000
-
47,251
22,131
16,000
-
43,187
17,819
14,000
-
45,727
53,031
17,000
-
$
316,021
279,861
-
-
91,308
43,618
-
-
86,236
14,288
-
-
219,971
99,697
-
-
94,351
18,203
-
-
86,236
14,656
-
-
91,308
43,618
-
-
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019 Ian Sandl
Scott Steinkrug
2019
2018
2019
2018
2017
2016
-
46,997
22,182
-
-
83,140
109,091
41,000
62,174
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31,460
50.6
30,714
49.4
46,997
22,182
83,140
109,091
41,000
-
93,844
18,245
166,015
89,726
-
-
1.
The Company achieved relative TSR performance over the 3 year period to 30 June 2018 of 25.1% which resulted in 50.6% of the 2015 Series Performance Rights
vesting and ordinary shares issued. The balance of the 2015 Series Performance Rights lapsed and were cancelled.
Note: The relative TSR performance condition of the share rights granted in FY16 (which were due to vest on 1 July 2019) was tested post 30 June 2019. This resulted
in a relative TSR performance for the period 1 July 2016 to 30 June 2019 of less than the 50th percentile of the comparator group and as such all performance rights
lapsed and were cancelled. This will be accounted for in the FY20 Remuneration Report.
Service rights
The table below shows the number of service rights that were granted, vested and forfeited during the year.
Balance
at start of
the year
Granted
during
the year
Vested during
the year
Forfeited
during
the year
Balance at end
of the year
Maximum
value yet
to vest
Name
Peter Bradford
Keith Ashby
Kate Barker
Matt Dusci
Andrew Eddowes
Joanne McDonald
Sam Retallack
Ian Sandl2
Scott Steinkrug
Year
granted
Number
Number Number
% Number
%
Vested and
exercisable1 Unvested
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2019
2018
-
49,858
-
10,542
-
9,509
-
19,801
-
14,112
-
9,475
-
10,542
-
-
18,804
43,230
-
9,282
-
7,648
-
18,942
-
9,775
-
7,723
-
9,107
-
8,273
16,728
-
-
24,929
-
5,271
-
4,754
-
9,900
-
7,056
-
4,737
-
5,271
-
-
9,402
-
50.0
-
50.0
-
50.0
-
50.0
-
50.0
-
50.0
-
50.0
-
-
50.0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
24,929
-
-
-
4,754
-
9,900
-
7,056
-
-
-
5,271
-
-
-
43,230
24,929
9,282
5,271
7,648
4,755
18,942
9,901
9,775
7,056
7,723
4,738
9,107
5,271
8,273
16,728
9,402
$
73,056
7,851
15,686
1,660
12,925
1,497
32,011
3,118
16,519
2,222
13,051
1,492
15,390
1,660
13,981
28,269
2,961
1.
2.
Service rights have vested due to service condition being achieved and, subject to being exercised, will convert into ordinary shares.
Mr Sandl commenced employment with the Company on 4 September 2017 and as such was not entitled to service rights relating to FY17 performance.
Shareholdings of KMP
The number of ordinary shares in the Company held by each Director and other KMP, including their personally related entities,
are set out below.
2019
Name
Directors
Debra Bakker
Peter Bilbe
Peter Bradford
Peter Buck
Geoffrey Clifford
Keith Spence
Neil Warburton
Other key management personnel
Keith Ashby
Kate Barker
Matt Dusci
Andrew Eddowes
Joanne McDonald
Sam Retallack
Ian Sandl
Scott Steinkrug
Total
Balance at start
of the year
Received on vesting
of share rights
Other changes
during the period
Balance at the end
of the year
11,085
40,000
830,000
22,200
15,000
22,125
106,034
-
-
9,900
101,447
-
19,865
-
78,549
1,256,205
-
-
110,000
-
-
-
-
15,068
4,115
31,460
9,636
10,094
9,797
-
40,862
231,032
5,000
-
60,000
-
-
-
-
-
-
-
-
-
-
2,503
-
67,503
16,085
40,000
1,000,000
22,200
15,000
22,125
106,034
15,068
4,115
41,360
111,083
10,094
29,662
2,503
119,411
1,554,740
IGO ANNUAL REPORT 2019 — 61
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019 Whilst IGO does not have a written policy stating a minimum shareholding in IGO shares for Directors, a written guideline
on this subject was adopted by the Company in FY18. The guideline states, that in order to achieve a greater alignment with
shareholder interests, Non-executive Directors are encouraged to hold shares in the Company. IGO is committed to achieving
greater diversity throughout the business and this includes the membership of the Board of Directors. To this end, the Board of
Directors acknowledges that each current or future Non-executive Director may have different personal circumstances. As such,
no minimum shareholding requirement has been set in order to maximise the Company’s opportunity to achieve the broadest
range of diversity of directors on the Board.
Accordingly, Non-executive Directors are encouraged to acquire and hold shares in IGO commensurate with their personal
circumstances.
(V) OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
During the current financial year, there were no other transactions with key management personnel or their related parties.
(VI)
VOTING OF SHAREHOLDERS AT LAST YEAR’S ANNUAL GENERAL MEETING
Independence Group NL received more than 99% of “yes” votes on its remuneration report for the 2018 financial year. The
Company sought feedback throughout the year on its remuneration practices through communications with key shareholders
and proxy advisors. This feedback included advice on continuing to provide the level of current level of transparency within the
Remuneration Report and ensure remuneration across the business reflects the strategic direction of the Company.
END OF AUDITED REMUNERATION REPORT
SHARES UNDER OPTION
At the reporting date, there were no unissued ordinary shares under options, nor were there any ordinary shares issued during
the year ended 30 June 2019 on the exercise of options.
INSURANCE OF OFFICERS AND INDEMNITIES
During the financial year, the Company paid an insurance premium in respect of a contract insuring the Directors and executive
officers of the Company and of any related body corporate against a liability incurred as such a Director or executive officer to
the extent permitted by the Corporations Law. The contract of insurance prohibits disclosure of the nature of the liability and the
amount of the premium.
The Company has not otherwise, during or since the end of the financial year, indemnified or agreed to indemnify any officer of
the Company or of any related body corporate against a liability incurred by such an officer.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of
the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on
behalf of the Company for all or part of those proceedings.
The Company was not a party to any such proceedings during the year.
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the Company and/or the Group are important.
Details of the amounts paid or payable to the auditor (BDO Audit (WA) Pty Ltd) for non-audit services provided during the year
are set out below.
The Directors are satisfied that the provision of the non-audit services is compatible with the general standard of independence
for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the
auditor did not compromise the auditor independence requirements of the Corporations Act 2001 nor the principles set out in
APES110 Code of Ethics for Professional Accountants.
During the period the following fees were paid or payable for non-audit services provided by the auditor of the parent entity, its
related practices and non-related audit firms:
Other services
BDO Audit (WA) Pty Ltd firm:
Other services in relation to the entity and any other entity in the consolidated Group
Total remuneration for non-audit services
2019
$
2018
$
20,0001
20,000
20,500
20,500
1.
Other services relate to review of the 2018 Sustainability Report, Form 5 Expenditure Audits, BDO Secure Reporting Line and Salary and Benefits benchmarking.
62 — IGO ANNUAL REPORT 2019
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 64.
ROUNDING OF AMOUNTS
The Company is of a kind referred to in ASIC Corporation Legislative Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to the ‘rounding off’ of amounts in the directors’ report. Amounts in the directors’ report have been
rounded off in accordance with that Legislative Instrument to the nearest thousand dollars, or in certain cases, to the nearest dollar.
This report is made in accordance with a resolution of Directors.
PETER BRADFORD
MANAGING DIRECTOR
Perth, Western Australia
Dated this 28th day of August 2019
IGO ANNUAL REPORT 2019 — 63
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019 INDEPENDENT AUDITOR’S REPORT
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
Tel: +61 8 6382 4600
www.bdo.com.au
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
38 Station Street
PO Box 700 West Perth WA 6872
Subiaco, WA 6008
Australia
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY GLYN O'BRIEN TO THE DIRECTORS OF INDEPENDENCE GROUP NL
As lead auditor of Independence Group NL for the year ended 30 June 2019, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
DECLARATION OF INDEPENDENCE BY GLYN O'BRIEN TO THE DIRECTORS OF INDEPENDENCE GROUP NL
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
DECLARATION OF INDEPENDENCE BY GLYN O'BRIEN TO THE DIRECTORS OF INDEPENDENCE GROUP NL
As lead auditor of Independence Group NL for the year ended 30 June 2019, I declare that, to the best
of my knowledge and belief, there have been:
As lead auditor of Independence Group NL for the year ended 30 June 2019, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
This declaration is in respect of Independence Group NL and the entities it controlled during the
period.
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Independence Group NL and the entities it controlled during the
period.
This declaration is in respect of Independence Group NL and the entities it controlled during the
Glyn O'Brien
period.
Director
BDO Audit (WA) Pty Ltd
Glyn O'Brien
Perth, 28 August 2019
Glyn O'Brien
Director
Director
BDO Audit (WA) Pty Ltd
BDO Audit (WA) Pty Ltd
Perth, 28 August 2019
Perth, 28 August 2019
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
IGO ANNUAL REPORT 2019 — 64
64 — IGO ANNUAL REPORT 2019
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
IGO ANNUAL REPORT 2019 — 64
IGO ANNUAL REPORT 2019 — 64
FINANCIAL
REPORT
66
67
68
70
72
123
124
Consolidated Statement of Profit or Loss And
Other Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes To The Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
IGO ANNUAL REPORT 2019 — 65
IGO ANNUAL REPORT 2019 — 65
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2019
Revenue from continuing operations
Other income
Mining, development and processing costs
Employee benefits expense
Share-based payments expense
Fair value movement of financial investments
Depreciation and amortisation expense
Exploration and evaluation expense
Royalty expense
Ore tolling expense
Shipping and wharfage costs
Borrowing and finance costs
Other expenses
Profit before income tax
Income tax expense
Profit after income tax for the period
Other comprehensive income
Items that may be reclassified to profit or loss
Effective portion of changes in fair value of cash flow hedges, net of tax
Exchange differences on translation of foreign operations
Other comprehensive (loss)/income for the period, net of tax
Total comprehensive income for the period
Profit for the period attributable to the members of Independence Group NL
Notes
2
3
5
2019
$'000
784,512
8,377
(262,851)
(53,234)
(3,123)
(6,915)
(237,118)
(57,317)
(30,506)
(57)
(18,340)
(6,638)
(11,342)
105,448
(29,363)
76,085
(1,054)
(27)
(1,081)
75,004
76,085
2018
$'000
777,946
2,689
(241,302)
(88,795)
(3,267)
231
(252,133)
(38,926)
(30,489)
(8,776)
(19,787)
(10,699)
(7,626)
79,066
(26,380)
52,686
1,784
42
1,826
54,512
52,686
Total comprehensive income for the period attributable to the members of
Independence Group NL
75,004
54,512
Earnings per share for profit attributable to the ordinary equity holders of the
Company:
Basic earnings per share
Diluted earnings per share
6
6
Cents
Cents
12.89
12.84
8.98
8.94
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
Independence Group NL
2
66 — IGO ANNUAL REPORT 2019
CONSOLIDATED BALANCE SHEET
FOR THE YEAR ENDED 30 JUNE 2019
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Financial assets at fair value through profit or loss
Derivative financial instruments
Total current assets
Non-current assets
Receivables
Inventories
Property, plant and equipment
Mine properties
Exploration and evaluation expenditure
Deferred tax assets
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Deferred tax liabilities
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Consolidated balance sheet
As at 30 June 2019
Notes
2019
$'000
2018
$'000
7
8
9
10
20
8
9
13
14
15
5
11
16
12
16
12
5
348,208
47,748
70,274
27,531
484
494,245
14,998
52,594
41,622
1,311,376
95,197
180,237
1,696,024
138,688
94,093
82,487
24,294
1,990
341,552
29,495
33,012
35,417
1,457,688
70,493
207,271
1,833,376
2,190,269
2,174,928
49,902
56,226
5,180
111,308
28,363
63,626
137,912
229,901
56,586
56,226
4,894
117,706
84,589
62,168
131,638
278,395
341,209
396,101
1,849,060
1,778,827
17
18(a)
18(b)
1,895,855
15,777
(62,572)
1,849,060
1,879,094
14,771
(115,038)
1,778,827
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
Independence Group NL
3
IGO ANNUAL REPORT 2019 — 67
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated statement of changes in equity
For the year ended 30 June 2019
Contributed
equity
$'000
Accumulated
losses
$'000
Hedging
reserve
$'000
Share-
based
payments
reserve
$'000
Foreign
currency
translation
reserve
$'000
Acquisition
reserve
$'000
Total
equity
$'000
Balance at 1 July 2017
1,878,469
(159,130)
(391)
10,698
3,142
(4)
1,732,784
Profit for the period
Other comprehensive income
Currency translation
differences - current period
Effective portion of changes in
fair value of cash flow hedges,
net of tax
Total comprehensive income
for the period
Transactions with owners in
their capacity as owners:
Dividends paid
Share-based payments
expense
Issue of shares - Employee
Incentive Plan
Transfer acquisition reserve to
accumulated losses
-
-
-
-
-
-
625
-
52,686
-
-
-
-
1,784
52,686
1,784
(11,736)
-
-
3,142
-
-
-
-
-
-
-
-
-
3,267
(625)
-
-
-
-
-
-
-
-
(3,142)
-
52,686
42
-
42
-
-
-
-
42
1,784
54,512
(11,736)
3,267
-
-
Balance at 30 June 2018
1,879,094
(115,038)
1,393
13,340
-
38
1,778,827
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Independence Group NL
4
68 — IGO ANNUAL REPORT 2019
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
Consolidated statement of changes in equity
For the year ended 30 June 2019
(continued)
Contributed
equity
$'000
Accumulated
losses
$'000
Hedging
reserve
$'000
Share-
based
payments
reserve
$'000
Foreign
currency
translation
reserve
$'000
Acquisition
reserve
$'000
Total
equity
$'000
Balance at 1 July 2018
Profit for the period
1,879,094
-
(115,038)
76,085
1,393
-
13,340
-
Other comprehensive income
Effective portion of changes in
fair value of cash flow hedges,
net of tax
Currency translation
differences - current period
Total comprehensive
income for the period
Transactions with owners in
their capacity as owners:
Dividends paid
Share-based payments
expense
Issue of shares - Employee
Incentive Plan
Shares issued on acquisition of
Southern Hills Tenements
-
-
-
-
-
1,036
15,725
-
-
(1,054)
-
76,085
(1,054)
(23,619)
-
-
-
-
-
-
-
-
-
-
-
3,123
(1,036)
-
Balance at 30 June 2019
1,895,855
(62,572)
339
15,427
-
-
-
-
-
-
-
-
-
-
38
-
1,778,827
76,085
-
(1,054)
(27)
(27)
(27)
75,004
-
-
-
-
(23,619)
3,123
-
15,725
11
1,849,060
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Independence Group NL
5
IGO ANNUAL REPORT 2019 — 69
CONSOLIDATED STATEMENT OF CASH FLOWS
30 JUNE 2019
Consolidated statement of cash flows
For the year ended 30 June 2019
Notes
2019
$'000
2018
$'000
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest and other costs of finance paid
Interest received
Payments for exploration activities
Receipts from other operating activities
Net cash inflow from operating activities
7(a)
Cash flows from investing activities
Interest and other costs of finance paid
Payments for property, plant and equipment
Proceeds from sale of property, plant and equipment and other investments
Payments for development expenditure
Payments for purchase of listed investments
Payments for capitalised exploration and evaluation expenditure
Net proceeds on sale of Stockman Project
Net proceeds on sale Jaguar Operation
Net cash (outflow) from investing activities
Cash flows from financing activities
Repayment of borrowings
Payment of dividends
Net cash (outflow) from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the period
16
19
7
841,684
(426,194)
415,490
(4,538)
3,973
(54,123)
11,508
372,310
-
(16,384)
3,268
(78,056)
(6,652)
(11,753)
10,000
16,764
(82,813)
(57,142)
(23,619)
(80,761)
208,736
138,688
784
348,208
783,395
(457,652)
325,743
(7,896)
659
(40,729)
28
277,805
(1,008)
(20,498)
198
(114,536)
(8,919)
(5,162)
21,782
23,140
(105,003)
(57,142)
(11,736)
(68,878)
103,924
35,763
(999)
138,688
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Independence Group NL
6
70 — IGO ANNUAL REPORT 2019
About this report
Independence Group NL is a company limited by shares incorporated and domiciled in Australia whose shares are publicly
traded on the Australian Securities Exchange. The nature of the operations and principal activities of the Group are
described in the directors' report.
The financial report of Independence Group NL (the Company) and its subsidiaries (collectively, the Group) for the year
ended 30 June 2019 was authorised for issue in accordance with a resolution of the Directors on 27 August 2019.
Basis of preparation
This financial report is a general purpose financial report, prepared by a for-profit entity, which:
•
•
•
•
•
•
Has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards
and other authoritative pronouncements of
the Australian Accounting Standards Board (AASB) and International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB);
Has been prepared on a historical cost basis, as modified by the revaluation of financial assets and liabilities (including
derivative instruments) at fair value through profit or loss and certain classes of property, plant and equipment;
Is presented in Australian dollars with values rounded to the nearest thousand dollars or in certain cases, the nearest
dollar,
in accordance with the Australian Securities and Investments Commission 'ASIC Corporation Legislative
Instrument 2016/191';
Presents comparative information where required for consistency with the current year's presentation;
Adopts all new and amended Accounting Standards and Interpretations issued by the AASB that are relevant to the
operations of the Group and effective for reporting periods beginning on or after 1 July 2018 as disclosed in note 30; and
Does not early adopt Accounting Standards and Interpretations that have been issued or amended but are not yet
effective, with the exception of AASB 9 Financial Instruments (December 2010) as amended by 2013-0 (AASB 9 (2013))
which was adopted in the year ended 30 June 2016.
Key estimates and judgements
In the process of applying the Group's accounting policies, management has made a number of judgements and applied
estimates of future events. The areas involving a higher degree of judgement or complexity, or areas where assumptions
and estimates are significant to the financial statements, are disclosed in the following notes:
Note 2
Note 5
Note 8
Note 9
Note 12
Note 13
Note 14
Note 15
Note 25
Revenue
Income tax
Trade and other receivables
Inventories
Provisions
Property, plant and equipment
Mine properties
Exploration and evaluation expenditure
Share-based payments
Basis of consolidation
The consolidated financial statements comprise the financial statements of
(subsidiaries) at year end is contained in note 22.
the Group. A list of controlled entities
The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent
accounting policies.
In preparing the consolidated financial statements, all inter-company balances and transactions, income and expenses and
profit or losses resulting from intra-Group transactions have been eliminated. Subsidiaries are consolidated from the date on
which control is obtained to the date on which control is disposed. The acquisition of subsidiaries is accounted for using the
acquisition method of accounting.
Independence Group NL
7
IGO ANNUAL REPORT 2019 — 71
CONTENTS OF THE NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
PAGE
FINANCIAL PERFORMANCE
Segment information
1
2
Revenue
3 Other income
4
5
6
Expenses and losses
Income tax
Earnings per share
Cash and cash equivalents
Trade and other receivables
Inventories
WORKING CAPITAL AND PROVISIONS
7
8
9
10 Financial assets at fair value through profit or loss
11
12 Provisions
Trade and other payables
INVESTED CAPITAL
13 Property, plant and equipment
14 Mine properties
15 Exploration and evaluation
CAPITAL STRUCTURE AND FINANCING ACTIVITIES
16 Borrowings
17 Contributed equity
18 Reserves and accumulated losses
19 Dividends paid and proposed
RISK
20 Derivatives
21 Financial risk management
GROUP STRUCTURE
22 Subsidiaries
UNRECOGNISED ITEMS
23 Commitments and contingencies
24 Events occurring after the reporting period
OTHER INFORMATION
25 Share-based payments
26 Related party transactions
27 Parent entity financial information
28 Deed of cross guarantee
29 Remuneration of auditors
30 Summary of significant accounting policies
72 — IGO ANNUAL REPORT 2019
73
73
76
78
78
79
82
83
83
84
85
86
86
86
89
89
91
93
94
94
95
97
98
100
100
101
109
109
110
110
111
111
111
115
116
117
119
119
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
Financial Performance
This section of the notes includes segment information and provides further information on key line items relevant to
financial performance that
including accounting policies, key judgements and
estimates relevant to understanding these items.
the Directors consider most relevant,
1
Segment information
(a)
Identification of reportable segments
Management has determined the operating segments based on the reports reviewed by the Board that are used to make
strategic decisions. The Group operates predominantly in only one geographic segment (Australia). During the year, the
following segments were in operation: The Nova Operation, the Tropicana Operation and Growth, which comprises Regional
Exploration Activities and Project Evaluation. The Jaguar Operation was sold effective 31 May 2018 and the Long Operation
was placed in care and maintenance in June 2018, and subsequently sold effective 31 May 2019.
these
The Nova Operation primarily produces nickel and copper concentrates. Revenue is derived from the sale of
concentrates containing nickel, copper and cobalt to multiple customers. The General Manager of the Nova Operation is
responsible for the budgets and expenditure of the Operation. The Nova Operation and exploration properties are owned by
the Group's wholly owned subsidiary Independence Nova Pty Ltd.
The Tropicana Operation represents the Group’s 30% joint venture interest in the Tropicana Gold Mine. AngloGold Ashanti
Australia Limited (AngloGold Ashanti) is the manager of the Operation and holds the remaining 70% interest. Programs and
budgets are provided by AngloGold Ashanti and are considered for approval by the Company's Board.
The Group’s General Manager Exploration is responsible for budgets and expenditure relating to the Group’s regional
exploration, scoping studies, feasibility studies and new business development. The Growth division does not normally
derive any income. Should a project generated by the Growth division commence generating income or lead to the
construction or acquisition of a mining operation, that operation would then be disaggregated from the Growth division and
become reportable in a different segment.
The Long Operation produced primarily nickel, together with copper, until June 2018. Revenue derived by the Long
Operation was received from one customer, being BHP Billiton Nickel West Pty Ltd. The Registered Manager of the Long
Operation was responsible for the budgets and expenditure of the Operation, which included exploration activities on the
mine’s tenure. The Long Operation and exploration properties were owned by the Group’s wholly owned subsidiary
Independence Long Pty Ltd. The Long Operation was placed in care and maintenance during June 2018, and subsequently
sold effective 31 May 2019.
The Jaguar Operation primarily produced zinc and copper concentrate. The General Manager of the Jaguar Operation was
responsible for the budgets and expenditure of the operation. The Jaguar Operation and exploration properties were owned
by the Group’s wholly owned subsidiary Independence Jaguar Pty Ltd. The Jaguar Operation was sold effective 31 May
2018.
Independence Group NL
9
IGO ANNUAL REPORT 2019 — 73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
1
Segment information (continued)
(b) Segment results
Year ended 30 June 2019
Nova
Operation
$'000
Tropicana
Operation
$'000
Jaguar
Operation
$'000
Long
Operation
$'000
Growth
$'000
Nickel revenue
Gold revenue
Copper revenue
Silver revenue
Cobalt revenue
Shipping and insurance service revenue
Other revenue
389,105
-
96,781
953
27,218
5,336
(17,502)
-
277,429
-
1,051
-
-
-
Total segment revenue
501,891
278,480
Segment operating profit/(loss) before income
tax
SPACE
Total segment assets
95,365
97,627
1,193,096
314,990
SPACE
Total segment liabilities
SPACE
Acquisition of property, plant and equipment
SPACE
SPACE
Depreciation and amortisation
SPACE
Other non-cash expenses
66,996
41,491
11,315
6,802
160,456
74,731
956
401
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,189)
(1,189)
-
-
-
-
-
-
3
3
Total
$'000
389,105
277,429
96,781
2,004
27,218
5,336
(18,688)
779,185
(1,400)
(59,148)
132,444
-
-
125
681
59
95,551 1,603,637
2,107
110,594
-
18,242
44
235,912
-
1,416
Year ended 30 June 2018
Nickel revenue
Gold revenue
Copper revenue
Silver revenue
Cobalt revenue
Zinc revenue
Shipping and insurance service revenue
Other revenue
Nova
Operation
$'000
Tropicana
Operation
$'000
Jaguar
Operation
$'000
Long
Operation
$'000
Growth
$'000
Total
$'000
232,722
-
69,435
725
22,277
-
3,643
19,990
-
239,472
-
905
-
-
-
-
-
1,459
17,064
16,259
-
78,100
1,025
(1,771)
57,517
-
1,410
-
-
-
-
5,855
-
-
-
-
-
-
-
11
11
290,239
240,931
87,909
17,889
22,277
78,100
4,668
24,085
766,098
Total segment revenue
348,792
240,377
112,136
64,782
Segment net operating profit/(loss) before
income tax
SPACE
Total segment assets
SPACE
Total segment liabilities
SPACE
35,623
86,292
12,893
1,368
(42,390)
93,786
1,372,090
304,341
69,113
36,486
-
-
21,848
83,225 1,781,504
8,572
1,360
115,531
Independence Group NL
10
74 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
1
Segment information (continued)
(b) Segment results (continued)
Year ended 30 June 2018
Acquisition of property, plant and equipment
SPACE
SPACE
Depreciation and amortisation
SPACE
Other non-cash expenses
(c) Segment net profit before income tax
Nova
Operation
$'000
Tropicana
Operation
$'000
Jaguar
Operation
$'000
Long
Operation
$'000
Growth
$'000
Total
$'000
6,106
4,229
8,283
547
-
19,165
159,777
54,532
13,826
22,835
55
251,025
827
396
276
110
-
1,609
A reconciliation of reportable segment profit before income tax to profit before income tax is as follows:
Segment profit before income tax
Interest revenue on corporate cash balances and other unallocated revenue
Fair value movement of corporate financial investments
Share-based payments expense
Corporate and other costs and unallocated other income
Borrowing and finance costs
Depreciation expense on corporate assets
Net gain on disposal of subsidiaries and other assets
Total profit before income tax
(d) Segment revenue
A reconciliation of reportable segment revenue to total revenue is as follows:
Total revenue for reportable segments
Other revenue from continuing operations
Total revenue
2019
$'000
132,444
5,327
(6,915)
(3,123)
(18,445)
(5,222)
(1,205)
2,587
105,448
2019
$'000
779,185
5,327
784,512
2018
$'000
93,786
11,848
(587)
(3,267)
(15,054)
(9,090)
(1,108)
2,538
79,066
2018
$'000
766,098
11,848
777,946
Revenues for the Nova Operation were received from BHP Billiton Nickel West Pty Ltd (BHP Billiton Nickel West), Glencore
International AG and Trafigura Pte Ltd.
Revenues for the Tropicana Operation were received from The Perth Mint, Australia and the Company's financiers via
forward sales contracts.
Revenues for the Long Operation were all derived from a single customer, being BHP Billiton Nickel West.
Revenues for the Jaguar Operation in the prior year were received from Glencore International AG and Trafigura Pte Ltd.
Independence Group NL
11
IGO ANNUAL REPORT 2019 — 75
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
1
Segment information (continued)
(e) Segment assets
A reconciliation of reportable segment assets to total assets is as follows:
Total assets for reportable segments
Unallocated assets:
Deferred tax assets
Listed equity securities
Cash and receivables held by the parent entity
Office and general plant and equipment
Total assets as per the balance sheet
(f) Segment liabilities
A reconciliation of reportable segment liabilities to total liabilities is as follows:
Total liabilities for reportable segments
Unallocated liabilities:
Deferred tax liabilities
Creditors and accruals of the parent entity
Provision for employee entitlements of the parent entity
Bank loans
Total liabilities as per the balance sheet
2 Revenue
Sales revenue from contracts with customers
Sale of goods revenue
Shipping and insurance service revenue
Other revenue
Interest revenue
Other revenue
Provisional pricing adjustments
2019
$'000
2018
$'000
1,603,637
1,781,504
180,237
27,531
373,433
5,431
207,271
22,376
159,595
4,182
2,190,269
2,174,928
2019
$'000
2018
$'000
110,594
115,531
137,912
4,634
3,480
84,589
341,209
2019
$'000
792,537
5,336
797,873
5,877
15
(19,253)
(13,361)
131,638
5,103
3,014
140,815
396,101
2018
$'000
737,345
4,668
742,013
731
11,528
23,674
35,933
Total revenue
784,512
777,946
Independence Group NL
12
76 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
2 Revenue (continued)
(a) Recognition and measurement
(i) Revenue from sale of goods
Revenue from the sale of goods is recognised when control of the goods has passed to the buyer based upon agreed
delivery terms.
Sale of concentrates
Revenue from the sale of concentrates is recognised when control has passed to the buyer based upon agreed delivery
terms, generally being when the product is loaded onto the ship and bill of lading received, or delivered to the customer's
is transferred to the customer before shipping takes place, revenue is
premises. In cases where control of product
recognised when the customer has formally acknowledged their legal ownership of the product, which includes all inherent
risks associated with control of the product. In these cases, the product is clearly identified and immediately available to the
customer. This is when the performance obligation is met.
The price to be received on sales of concentrate is provisionally priced and recognised at the estimate of the consideration
receivable that is highly probable of not reversing by reference to the relevant contractual price and the estimated mineral
specifications, net of treatment and refining charges where applicable. Subsequently, provisionally priced sales are repriced
at each reporting period up until when final pricing and settlement is confirmed with revenue adjustments relating to the
quality and quantity of commodities sold being recognised in sales revenue.
Provisionally priced sales for which price finalisation is referenced to the relevant metal price index have an embedded
commodity derivative. The embedded derivative is carried at fair value through profit or loss as part of trade receivables. The
period between provisional pricing and final invoices is generally between 30 to 90 days.
Sale of gold bullion
Revenue from the sale of gold bullion is recognised when control of the inventory has transferred to the customer, being
when the gold is credited to the metals account of the customers. It is at this point that control over the gold bullion has been
passed to the customer and the Group has fulfilled its performance obligation under the contract.
(ii) Revenue from Services - Shipping and Insurance
Sales of nickel and copper concentrates are on terms that include the Group being responsible for shipping and insurance
costs. Shipping and insurance is a separate performance obligation from the sale of the commodity with the revenue
allocated to shipping and insurance being recognised over the period of transfer to the customer.
(iii) Provisional pricing adjustments
The Group’s sales contracts may provide for provisional pricing of sales at the time the product is delivered to the vessel
with final pricing determined using the index on or after the vessel’s arrival to the port of discharge. This provisional pricing
relates to the quality and quantity of the commodity sold, which is included in sales revenue, and an embedded derivative
relating to the pricing of the commodity sold. Provisional pricing adjustments relating to the embedded derivative are
separately identified as movements in the financial instrument rather than being included within Sales revenue. The final
pricing adjustment mechanism, being an embedded derivative, is separated from the host contract and recognised at fair
value through profit or loss. These amounts are disclosed separately as Provisional pricing adjustments in Other revenue,
rather than being included within Sales revenue for the Group.
(iv) Interest revenue
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest
rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to
the net carrying amount of the financial asset.
Independence Group NL
13
IGO ANNUAL REPORT 2019 — 77
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
2 Revenue (continued)
(b) Key estimates and judgements
Judgement is exercised in estimating variable consideration. This is determined by past experience with respect to the
goods returned to the Group where the customer maintains a right of return pursuant to the customer contract or where
goods or services have a variable component. Revenue will only be recognised to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised under the contract will not occur when the uncertainty
associated with the variable consideration is subsequently resolved.
3 Other income
Net foreign exchange gains
Net gain on disposal of property, plant and equipment
Net gain on sale of tenements
Write-back of rehabilitation provision
Net gain on sale of subsidiaries
4
Expenses and losses
Cost of sale of goods
Employee benefits expenses
Share-based payments expense
Exploration and growth costs
Rental expense relating to operating leases
Net foreign exchange losses
Amortisation expense
Depreciation expense
Borrowing and finance costs
Rehabilitation and restoration borrowing costs
Borrowing and finance costs - other entities
Amortisation of borrowing costs
Finance costs expensed
2019
$'000
1,967
2,636
-
1,187
2,587
8,377
2019
$'000
327,569
53,234
3,123
57,317
1,933
-
228,121
8,997
1,416
4,306
916
6,638
2018
$'000
-
135
13
-
2,541
2,689
2018
$'000
373,725
88,795
3,267
38,926
1,872
582
237,993
14,140
1,609
8,174
916
10,699
Independence Group NL
7
78 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 5
Income tax
(a)
Income tax expense
The major components of income tax expense are:
Deferred income tax expense
Current income tax expense
Income tax expense
Deferred income tax expense included in income tax expense comprises:
Decrease in deferred tax assets
Increase in deferred tax liabilities
Deferred income tax expense
(b) Amounts recognised directly in equity
Notes to the consolidated financial statements
30 June 2019
(continued)
2019
$'000
29,363
-
29,363
24,204
5,159
29,363
2018
$'000
26,380
-
26,380
23,039
3,341
26,380
Deferred income tax (benefit)/expense related to items charged or credited to other
comprehensive income or directly to equity:
Recognition of hedge contracts
Income tax (benefit)/expense reported in equity
(452)
(452)
765
765
(c) Numerical reconciliation of income tax expense to prima facie tax payable
Profit from continuing operations before income tax expense
Tax expense at the Australian tax rate of 30% (2018: 30%)
Tax effect of amounts which are not deductible (taxable)
in calculating taxable income:
Share-based payments
Other non-deductible items
Adjustment to tax cost base of asset on acquisition of subsidiary
Impairment of tax losses previously recognised
Non-assessable gain on disposal of subsidiary
Capital losses not brought to account
Previously unrecognised capital losses brought to account
Difference in overseas tax rates
Overseas tax losses not brought to account
Adjustments for current tax of prior periods
Income tax expense
Independence Group NL
2019
$'000
105,448
31,634
317
519
-
-
(811)
16
(27)
7
20
(2,312)
29,363
2018
$'000
79,066
23,720
897
1
(11,038)
14,032
(1,341)
-
(86)
46
126
23
26,380
15
IGO ANNUAL REPORT 2019 — 79
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
5
Income tax (continued)
(d) Reconciliation of carry forward tax losses and income tax paid
Tax effected balances at 30%
Carry forward tax losses at the beginning of the year
Tax losses recouped from current year
Impairment of tax losses
Carry forward tax losses at the end of the year
2019
$'000
180,695
(26,307)
-
154,388
2018
$'000
198,571
(3,844)
(14,032)
180,695
Effective income tax rate based on income tax paid
-%
-%
(e) Deferred tax assets and liabilities
Balance Sheet
Profit or loss
Equity
2019
$'000
2018
$'000
2019
$'000
2018
$'000
2019
$'000
2018
$'000
Deferred tax liabilities
Capitalised exploration
expenditure
Mine properties
Property, plant and equipment
Deferred gains and losses on
hedging contracts
Trade debtors
Consumable inventories
Other
(2,163)
(128,960)
(1,673)
(3,915)
(121,034)
-
(145)
(2,852)
(1,815)
(304)
(597)
(2,606)
(1,905)
(1,581)
(3,319)
7,926
1,673
-
246
(90)
(1,277)
Gross deferred tax liabilities
(137,912)
(131,638)
5,159
(8,729)
14,212
-
-
(3,226)
750
334
3,341
-
-
-
(452)
-
-
-
(452)
-
-
-
400
-
-
-
400
Disposal of
Subsidiary
2019
$'000
2018
$'000
1,567
-
-
-
-
-
-
(641)
(8,899)
-
-
(1,074)
(1,359)
(33)
1,567
(12,006)
Deferred tax assets
Property, plant and equipment
Deferred losses on hedged
commodity contracts
Business-related capital
allowances
Provision for employee
entitlements
Provision for rehabilitation
Mining information
Carry forward tax losses
Other
-
-
514
(967)
2,766
-
-
-
1,831
3,593
1,762
1,916
1,910
18,732
-
154,388
3,376
1,738
18,380
-
180,695
2,351
(172)
(1,701)
-
26,307
(1,025)
1,851
(391)
172
17,876
(1,151)
Gross deferred tax assets
180,237
207,271
24,204
23,039
-
-
-
-
-
-
-
-
-
Deferred tax expense/(benefit)
42,325
75,633
29,363
26,380
(452)
-
1,481
14,685
365
-
-
-
-
-
-
365
765
-
-
-
1,349
-
-
-
2,830
-
-
1,151
3,824
543
-
551
20,754
4,397
8,748
Independence Group NL
16
80 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
5
Income tax (continued)
(f) Tax losses
In addition to the above recognised tax losses, the Group also has the following revenue and capital tax losses for which no
deferred tax asset has been recognised:
Unrecognised revenue tax losses
Potential tax benefit @ 30.0% (2018: 30%)
Unrecognised capital tax losses
Potential tax benefit @ 30% (2018: 30%)
(g) Tax transparency code
2019
$'000
46,775
14,032
85,546
25,664
2018
$'000
46,775
14,032
85,304
25,591
The Group has adopted the Board of Taxation's voluntary Tax Transparency Code (TTC). The TTC requires additional tax
disclosures in two parts (Part A and Part B), which includes addressing the Company's approach to tax strategy and
governance. The Group has addressed these Part A and Part B disclosures in this note and in its 2018 Tax Transparency
Report. In relation to the year ended 30 June 2019, the Part A and Part B disclosures will be addressed in the Group's 2019
Annual Sustainability Report.
(h) Recognition and measurement
Current taxes
The income tax expense or benefit for the period is the tax payable on the current period's taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Company's subsidiaries and associates operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation
is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the
tax authorities.
Deferred taxes
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are
not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises
from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws)
that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the
related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to utilise those
temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases
of investments in foreign operations where the Company is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse in the foreseeable future.
Independence Group NL
10
IGO ANNUAL REPORT 2019 — 81
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
5
Income tax (continued)
(h) Recognition and measurement (continued)
Offsetting deferred tax balances
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset
where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and
settle the liability simultaneously.
(i) Significant estimates
In addition, deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future forecast taxable profits are available to utilise those temporary differences and losses, and the tax
losses continue to be available having regard to the relevant tax legislation associated with their recoupment.
The Australian consolidated tax group has recognised a deferred tax asset relating to carry forward tax losses of
$154,388,000 at 30 June 2019 (2018: $180,695,000). The utilisation of this deferred tax asset amount depends upon future
taxable amounts in excess of profits arising from the reversal of temporary differences. The Group believes this amount to
be recoverable based on taxable income projections.
6
Earnings per share
(a) Earnings used in calculating earnings per share
Profit used in calculating basic and diluted earnings per share attributable to ordinary equity holders of the parent is
$76,085,000 (2018: $52,686,000).
(b) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in calculating basic
earnings per share
Adjustments for calculation of diluted earnings per share:
Share rights
Weighted average number of ordinary and potential ordinary shares used as the
denominator in calculating diluted earnings per share
(c)
Information concerning the classification of securities
2019
Number
2018
Number
590,335,278
586,808,843
2,524,470
2,261,529
592,859,748
589,070,372
Share rights
Share rights granted to Executives and employees under the Company's Employee Incentive Plan and any outstanding
service rights are included in the calculation of diluted earnings per share as they could potentially dilute basic earnings per
share in the future. The share rights are not included in the determination of basic earnings per share. Further information
about the share rights is provided in note 25.
(d) Calculation of earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
Notes to the consolidated financial statements
30 June 2019
(continued)
•
6
•
(d) Calculation of earnings per share (continued)
the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares,
Earnings per share (continued)
by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements
in ordinary shares issued during the year and excluding treasury shares.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
•
•
the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares; and
the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion
of all dilutive potential ordinary shares.
Independence Group NL
18
82 — IGO ANNUAL REPORT 2019
Independence Group NL
19
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
Working Capital and Provisions
This section of the notes provides further information about the Group's working capital and provisions, including accounting
policies and key judgements and estimates relevant to understanding these items.
7 Cash and cash equivalents
Cash at bank and in hand
Deposits at call
2019
$'000
108,178
240,030
348,208
2018
$'000
138,658
30
138,688
The Group has cash balances of $1,633,000 (2018: $1,864,000) not generally available for use as the balances are held by
the Tropicana Joint Venture and may only be used in relation to joint venture expenditure.
The Group's exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in note
21.
(a) Reconciliation of profit after income tax to net cash inflow from operating activities
Profit for the period
Depreciation and amortisation
Net gain on sale of non-current assets
Fair value of movement of financial investments
Non-cash employee benefits expense - share-based payments
Gain on disposal of subsidiaries
Amortisation of borrowing expenses
Amortisation of lease incentive
Foreign exchange (gains) losses on cash balances
Change in fair value measurement of receivables
Change in operating assets and liabilities:
Decrease (increase) in trade receivables
(Increase) in inventories
Decrease in deferred tax assets
Decrease (increase) in other operating receivables and prepayments
(Increase) in derivative financial instruments
(Decrease) increase in trade and other payables
Increase in deferred tax liabilities
Increase (decrease) in other provisions
2019
$'000
76,085
237,118
(2,636)
6,915
3,123
(2,587)
916
(79)
(784)
(1,574)
25,371
(7,375)
24,204
9,855
-
(2,080)
5,159
679
2018
$'000
52,686
252,133
(148)
(231)
3,267
(2,541)
916
(78)
999
-
(26,912)
(49,692)
23,404
(8,152)
(29)
34,135
2,976
(4,928)
Net cash inflow from operating activities
372,310
277,805
(b) Non-cash investing and financing activities
During the current year, the Company issued 3,095,408 shares totalling $15,725,000 for the acquisition of the Southern Hills
tenements (refer note 17(b)). The Company also received 7,777,778 shares in Mincor Resources NL totalling $3,500,000
relating to the sale of the Long Operation during the year (refer to Note 22(b)). There were no other non-cash investing and
financing activities during the current or previous year.
Independence Group NL
13
IGO ANNUAL REPORT 2019 — 83
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
7 Cash and cash equivalents (continued)
(c) Recognition and measurement
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term deposits with an original
maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
For the purpose of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined
above, net of outstanding bank overdrafts. Bank overdrafts are included within borrowings in current liabilities on the balance
sheet.
8
Trade and other receivables
Current
Trade receivables
GST Receivable
Other receivables
Prepayments
Non-current
Other receivables
2019
$'000
24,568
2,463
18,556
2,161
47,748
2018
$'000
50,858
738
40,563
1,934
94,093
14,998
14,998
29,495
29,495
(a) Recognition and measurement
(i) Trade receivables
Trade receivables are generally received in the current month, or up to three months after the shipment date. The
receivables are initially recognised at fair value, less any allowance for expected credit losses.
The Group has applied the simplified approach to measuring expected credit losses, which applies a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Trade receivables are subsequently revalued by the mark-to-market of open sales. The Group determines mark-to-market
prices using forward prices at each period end for nickel, copper and cobalt sales.
(ii) Other receivables
Other receivables include amounts outstanding on the sale of the Jaguar Operation in May 2018. The discounted values
(using a discount rate of 3.5%) of the outstanding cash proceeds of $15,519,000 (2018: $15,520,000) and $14,994,000
(2018: $29,480,000) are shown in current and non-current receivables respectively. Refer further information at note 22(c).
Notes to the consolidated financial statements
30 June 2019
(continued)
Note 21(b)(i) sets out information about the impairment of financial assets and the Group's exposure to credit risk. Given our
credit risk management processes, the resulting level of expected credit losses are insignificant.
Impairment and risk exposure
(iii)
8
(b) Key estimates and judgements
Trade and other receivables (continued)
(b) Key estimates and judgements (continued)
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a estimation based on a degree of judgement. It is based on
the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected
credit loss rate for each group. These assumptions include recent sales experience and historical collection rates.
9
Inventories
Independence Group NL
Current
Mine spares and stores
ROM inventory
Concentrate inventory
Gold in circuit
Gold dore
84 — IGO ANNUAL REPORT 2019
Non-current
ROM inventory
(a) Classification of inventory
2019
$'000
19,023
32,866
12,006
1,454
4,925
70,274
2018
21
$'000
13,831
39,943
23,258
1,585
3,870
82,487
52,594
52,594
33,012
33,012
Inventory classified as non-current relates to low grade (0.6g/t to 1.2g/t) gold ore stockpiles which are not intended to be
utilised within the next 12 months but are anticipated to be utilised beyond that period.
(b) Recognition and measurement
(i) Ore, concentrate and gold inventories
included in the cost of inventory.
(ii) Mine spares and stores
Inventories, comprising nickel, copper and cobalt in concentrate, gold dore, gold in circuit and ore stockpiles, are valued at
the lower of weighted average cost and net realisable value. Costs include fixed direct costs, variable direct costs and an
appropriate portion of fixed overhead costs. A portion of the related depreciation, depletion and amortisation charge is
Inventories of consumable supplies and spare parts are valued at the lower of cost and net realisable value. Cost is
assigned on a weighted average basis. Net realisable value is the estimated selling price in the ordinary course of business
less estimated costs of completion, and the estimated costs necessary to make the sale.
The recoverable amount of surplus items is assessed regularly on an ongoing basis and written down to its net realisable
value when an impairment indicator is present.
(c) Key estimates and judgements
The Group reviews the carrying value of inventories regularly to ensure that their cost does not exceed net realisable value.
In determining net realisable value various factors are taken into account, including estimated future sales price of the
product based on prevailing spot metals prices at the reporting date, less estimated costs to complete production and bring
the product to sale.
Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the amount of
contained metal based on assay data, and the estimated recovery percentage based on the expected processing method.
Independence Group NL
22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
8
Trade and other receivables (continued)
(b) Key estimates and judgements (continued)
The allowance for expected credit losses assessment requires a estimation based on a degree of judgement. It is based on
the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected
credit loss rate for each group. These assumptions include recent sales experience and historical collection rates.
9
Inventories
Current
Mine spares and stores
ROM inventory
Concentrate inventory
Gold in circuit
Gold dore
Non-current
ROM inventory
2019
$'000
19,023
32,866
12,006
1,454
4,925
70,274
2018
$'000
13,831
39,943
23,258
1,585
3,870
82,487
52,594
52,594
33,012
33,012
(a) Classification of inventory
Inventory classified as non-current relates to low grade (0.6g/t to 1.2g/t) gold ore stockpiles which are not intended to be
utilised within the next 12 months but are anticipated to be utilised beyond that period.
(b) Recognition and measurement
(i) Ore, concentrate and gold inventories
Inventories, comprising nickel, copper and cobalt in concentrate, gold dore, gold in circuit and ore stockpiles, are valued at
the lower of weighted average cost and net realisable value. Costs include fixed direct costs, variable direct costs and an
appropriate portion of fixed overhead costs. A portion of the related depreciation, depletion and amortisation charge is
included in the cost of inventory.
(ii) Mine spares and stores
Inventories of consumable supplies and spare parts are valued at the lower of cost and net realisable value. Cost is
assigned on a weighted average basis. Net realisable value is the estimated selling price in the ordinary course of business
less estimated costs of completion, and the estimated costs necessary to make the sale.
The recoverable amount of surplus items is assessed regularly on an ongoing basis and written down to its net realisable
value when an impairment indicator is present.
(c) Key estimates and judgements
The Group reviews the carrying value of inventories regularly to ensure that their cost does not exceed net realisable value.
In determining net realisable value various factors are taken into account, including estimated future sales price of the
product based on prevailing spot metals prices at the reporting date, less estimated costs to complete production and bring
the product to sale.
Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the amount of
contained metal based on assay data, and the estimated recovery percentage based on the expected processing method.
Independence Group NL
22
IGO ANNUAL REPORT 2019 — 85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 10 Financial assets at fair value through profit or loss
Shares in Australian listed companies - at fair value through profit or loss
Notes to the consolidated financial statements
30 June 2019
(continued)
2019
$'000
27,531
27,531
2018
$'000
24,294
24,294
(i) Amounts recognised in profit or loss
During the current year, the changes in fair values of financial assets resulted in a loss to the profit or loss of $6,915,000
(2018: profit of $231,000). Changes in fair values of financial assets at fair value through profit or loss are recorded in fair
value movement of financial investments in the profit or loss.
(ii) Recognition and measurement
The Group classifies financial assets at fair value through profit or loss if they are acquired principally for the purpose of
selling in the short term, ie are held for trading. They are presented as current assets if they are expected to be sold within
12 months after the end of the reporting period; otherwise they are presented as non-current assets. Refer to note 21(d) for
fair value measurement.
11 Trade and other payables
Current liabilities
Trade payables
Other payables
(a) Recognition and measurement
2019
$'000
2,827
47,075
49,902
2018
$'000
14,447
42,139
56,586
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are
unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are
presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised
initially at their fair value and subsequently measured at amortised cost using the effective interest method.
12 Provisions
Current
Provision for employee entitlements
Provision for restructuring costs
2019
$'000
5,180
-
5,180
2018
$'000
4,322
572
4,894
Independence Group NL
23
86 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
12 Provisions (continued)
Non-current
Provision for employee entitlements
Provision for rehabilitation costs
(a) Movements in provisions
Movements in the provision for rehabilitation costs during the financial year are set out below:
Carrying amount at beginning of financial year
Additional provision
Rehabilitation and restoration borrowing costs expense
Payments during the period
Disposal of subsidiary
Write-back of provision
Carrying amount at end of financial year
(b) Recognition and measurement
2019
$'000
1,185
62,441
63,626
2019
$'000
61,267
5,564
1,416
(122)
(4,497)
(1,187)
62,441
2018
$'000
901
61,267
62,168
2018
$'000
72,687
86
1,609
(369)
(12,746)
-
61,267
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Provisions are not recognised for future operating losses.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the
present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate
that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the
provision due to the passage of time is recognised as rehabilitation and restoration borrowing expense in the profit or loss.
(i) Rehabilitation and restoration
Long-term environmental obligations are based on the Group’s environmental management plans, in compliance with
current environmental and regulatory requirements.
Full provision is made based on the net present value of the estimated cost of rehabilitating and restoring the environmental
disturbance that has occurred up to the reporting date. To the extent that future economic benefits are expected to arise,
these costs are capitalised and amortised over the remaining lives of the mines.
Annual increases in the provision relating to the change in the net present value of the provision are recognised as finance
costs (and disclosed as Rehabilitation and restoration borrowing costs). The estimated costs of rehabilitation are reviewed
annually and adjusted as appropriate for changes in legislation, technology or other circumstances. Cost estimates are not
reduced by the potential proceeds from the sale of assets or from plant clean-up at closure.
(ii) Employee benefits
The provision for employee benefits represents annual leave and long service leave entitlements accrued by employees.
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months
after the end of the period in which the employees render the related service, are recognised in respect of employees’
services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are
settled. The amounts are presented as current employee entitlements in the balance sheet.
Independence Group NL
24
IGO ANNUAL REPORT 2019 — 87
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
12 Provisions (continued)
(b) Recognition and measurement (continued)
(ii) Employee benefits (continued)
Other long-term employee benefit obligations
The liabilities for long service leave and annual leave that are not expected to be settled wholly within 12 months after the
end of the period in which the employees render the related service are measured as the present value of expected future
payments to be made in respect of services provided by employees up to the end of the reporting period. Consideration is
given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future
payments are discounted using market yields at the end of the reporting period of government bonds with terms and
the estimated future cash outflows. Remeasurements as a result of
currencies that match, as closely as possible,
experience adjustments and changes in actuarial assumptions are recognised in profit or loss.
The obligations are presented as current liabilities in the consolidated balance sheet
if the entity does not have an
unconditional right to defer settlement for at least twelve months after the reporting date, regardless of when the actual
settlement is expected to occur.
(c) Key estimates and judgements
Rehabilitation and restoration provisions
The provision for rehabilitation and restoration costs is based on the net present value of the estimated cost of rehabilitating
and restoring the environmental disturbance that has occurred up to the reporting date. Significant estimates and
assumptions are made in determining the provision for mine rehabilitation as there are numerous factors that will affect the
ultimate liability payable. These factors include estimates of the extent and costs of rehabilitation activities, technological
changes, regulatory changes, cost increases as compared to the inflation rates and changes in discount rates. These
uncertainties may result in future actual expenditure differing from the amounts currently provided. The provision at reporting
date represents management’s best estimate of the present value of the future rehabilitation costs required.
Long service leave
Long service leave is measured at the present value of benefits accumulated up to the end of the reporting period. The
liability is discounted using an appropriate discount rate. Management requires judgement to determine key assumptions
used in the calculation, including future increases in salaries and wages, future on-costs rates and future settlement dates of
employees' departures.
Independence Group NL
25
88 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
Invested Capital
This section of the notes provides further information about property, plant and equipment, mine properties and exploration
and evaluation expenditure and the carrying amount of these non-financial assets, including accounting policies, key
judgements and estimates relevant to understanding these items.
13 Property, plant and equipment
Land and
buildings
$'000
Mining plant
and
equipment
$'000
Furniture,
fittings and
other
equipment
$'000
Motor
vehicles
$'000
Assets under
construction
$'000
Total
$'000
25,040
27,670
14,118
4,589
9,326
80,743
(14,334)
(11,989)
10,706
15,681
(9,014)
5,104
(3,784)
805
-
(39,121)
9,326
41,622
12,663
667
-
117
(2,741)
-
10,706
13,548
4,344
(632)
3,178
(4,288)
(469)
15,681
4,132
1,742
-
756
(1,493)
(33)
5,104
1,013
293
-
22
(475)
(48)
805
4,061
9,338
-
(4,073)
-
-
9,326
35,417
16,384
(632)
-
(8,997)
(550)
41,622
24,257
62,710
12,483
5,583
4,061
109,094
(11,594)
(49,162)
12,663
13,548
(8,351)
4,132
(4,570)
1,013
-
4,061
(73,677)
35,417
14,622
1,202
-
1,262
(2,851)
(1,572)
12,663
20,301
8,714
(52)
1,868
(8,521)
(8,762)
13,548
3,783
1,951
-
269
(1,617)
(254)
4,132
2,227
911
(16)
153
(1,151)
(1,111)
1,013
3,989
7,847
-
(3,552)
-
(4,223)
4,061
44,922
20,625
(68)
-
(14,140)
(15,922)
35,417
Year ended 30 June 2019
Cost
Accumulated depreciation and
impairment
Net book amount
Movements
Opening net book amount
Additions
Disposals
Transfers
Depreciation charge
Disposal of subsidiary
Closing net book amount
Year ended 30 June 2018
Cost
Accumulated depreciation and
impairment
Net book amount
Movements
Opening net book amount
Additions
Disposals
Transfers
Depreciation charge
Disposal of subsidiary
Closing net book amount
(a) Non-current assets pledged as security
Refer to note 16 for information on non-current assets pledged as security by the Group.
Independence Group NL
26
IGO ANNUAL REPORT 2019 — 89
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
13 Property, plant and equipment (continued)
(b) Recognition and measurement
Property, plant and equipment are stated at historical cost
includes
expenditure that is directly attributable to the acquisition of the items. It also includes the direct cost of bringing the asset to
the location and condition necessary for first use and the estimated future cost of rehabilitation, where applicable. The
assets are subsequently measured at cost less accumulated depreciation and any accumulated impairment losses.
less accumulated depreciation. Historical cost
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when
replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are
incurred.
Depreciation
Land is not depreciated. Depreciation on other assets is calculated using either units-of-production or straight-line
depreciation as follows:
Depreciation periods are primarily:
Buildings
Mining plant and equipment
Motor vehicles
Furniture and fittings
5 - 10 years
2 - 10 years
3 - 8 years
3 - 10 years
Depreciation is expensed as incurred, unless it relates to an asset or operation in the construction phase, in which case it is
capitalised.
Derecognition
An item of property, plant and equipment is derecognised when it is sold or otherwise disposed of, or when its use is
expected to bring no future economic benefits. Any gain or loss from derecognising the asset (being the difference between
the proceeds of disposal and the carrying amount of the asset) is included in the profit or loss in the period the item is
derecognised.
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
(c) Key estimates and judgements
The estimations of useful lives, residual values and depreciation methods require significant management judgements and
are regularly reviewed. If they need to be modified, the depreciation and amortisation expense is accounted for prospectively
from the date of the assessment until the end of the revised useful life (for both the current and future years).
Independence Group NL
27
90 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 14 Mine properties
Year ended 30 June 2019
Cost
Accumulated amortisation and impairment
Net book amount
Movements
Carrying amount at beginning of the period
Additions
Transfers from exploration and evaluation expenditure
Amortisation expense
Closing net book amount
Year ended 30 June 2018
Cost
Accumulated amortisation and impairment
Net book amount
Movements
Carrying amount at beginning of the period
Additions
Transfers to exploration and evaluation expenditure
Amortisation expense
Transfers
Disposal of subsidiary
Notes to the consolidated financial statements
30 June 2019
(continued)
Mine
properties in
development
$'000
Mine
properties in
production
$'000
Deferred
stripping
$'000
Total mine
properties
$'000
4,271
-
4,271
-
1,497
2,774
-
4,271
1,720,121
(464,628)
1,255,493
198,031
(146,419)
1,922,423
(611,047)
51,612
1,311,376
1,391,143
41,482
-
(177,132)
1,255,493
66,545
36,056
-
(50,989)
1,457,688
79,035
2,774
(228,121)
51,612
1,311,376
-
-
-
1,831,083
(439,940)
1,391,143
161,975
(95,430)
1,993,058
(535,370)
66,545
1,457,688
1,355,722
-
-
-
(1,355,722)
-
202,282
74,734
(1,473)
(206,227)
1,355,722
(33,895)
54,915
43,396
-
(31,766)
-
-
1,612,919
118,130
(1,473)
(237,993)
-
(33,895)
Closing net book amount
-
1,391,143
66,545
1,457,688
(a) Recognition and measurement
(i) Mine properties in development
Mine properties in development represent the expenditure incurred when technical feasibility and commercial viability of
extracting a mineral resource have been demonstrated, and includes the costs incurred up until such time as the asset is
capable of being operated in a manner intended by management. These costs are not amortised but the carrying value is
assessed for impairment whenever facts and circumstances suggest that the carrying amount of the asset may exceed its
recoverable amount.
Independence Group NL
28
IGO ANNUAL REPORT 2019 — 91
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
14 Mine properties (continued)
(a) Recognition and measurement (continued)
(ii) Mine properties in production
Mine properties in production represent
the accumulation of all acquisition, exploration, evaluation and development
expenditure incurred by or on behalf of the Group in relation to areas of interest in which mining of the mineral resource has
commenced. When further development expenditure, including waste development and stripping, is incurred in respect of a
mine property after the commencement of production, such expenditure is carried forward as part of the cost of that mine
property only when substantial future economic benefits are established, otherwise such expenditure is classified as part of
the cost of production.
Amortisation is provided on a units-of-production basis, with separate calculations being made for each mineral resource.
The units-of-production method results in an amortisation charge proportional
the economically
recoverable mineral resources (comprising proven and probable reserves).
to the depletion of
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 mine properties exceeds its estimated
recoverable amount. The asset is then written down to its recoverable amount and the impairment losses are recognised in
profit or loss.
(iii) Deferred stripping
Stripping activity costs incurred in the development phase of a mine are capitalised as part of the cost of constructing the
mine and subsequently amortised over the life of the mine on a units-of-production basis.
Stripping activity incurred during the production phase of a mine is assessed as to whether the benefit accruing from that
activity is to provide access to ore that can be used to produce ore inventory, or whether it in addition provides improved
access to ore that will be mined in future periods.
To the extent that the benefit from the stripping activity is realised in the form of inventory produced, the Group accounts for
those stripping activity costs in accordance with AASB102 Inventories. A stripping activity asset is brought to account if it is
probable that future economic benefits (improved access to the ore body) will flow to the Group, the component of the ore
body for which access has been improved can be identified and costs relating to the stripping activity can be measured
reliably.
The amount of stripping activity costs that are capitalised is determined based on a comparison of the stripping ratio in the
relevant period with the life of mine stripping ratio. To the extent that there is a period of sustained stripping that exceeds the
average life of mine stripping ratio, mine waste stripping costs are capitalised to the stripping activity asset. Such capitalised
costs are amortised over the life of that mine on a units-of-production basis. The life of mine ratio is based on ore reserves of
the mine. Changes to the life of mine are accounted for prospectively.
(b) Key estimates and judgements
(i) Proved and probable ore reserves
The Group uses the concept of life of mine to determine the amortisation of mine properties. In determining life of mine, the
Notes to the consolidated financial statements
Group prepares ore reserve estimates in accordance with the JORC Code 2012, guidelines prepared by the Joint Ore
30 June 2019
Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and
(continued)
Minerals Council of Australia. The estimate of these proved and probable ore reserves, by their very nature, require
judgements, estimates and assumptions.
14 Mine properties (continued)
Where the proved and probable reserve estimates need to be modified,
prospectively from the date of the assessment until the end of the revised mine life (for both the current and future years).
(b) Key estimates and judgements (continued)
the amortisation expense is accounted for
(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.
Other
$'000
5,518
27,478
(2,774)
30,222
Total
29
$'000
70,493
27,478
(2,774)
95,197
73,068
5,161
1,473
(9,209)
70,493
15 Exploration and evaluation
Independence Group NL
Year ended 30 June 2019
Opening net book amount
Additions*
Transfer from (to) mine properties
in production
Nova
Operation
$'000
Windward
$'000
Stockman
Project
$'000
Jaguar
Operation
$'000
34,100
-
17,823
-
13,052
-
-
-
-
-
-
-
-
Closing net book amount
34,100
17,823
13,052
92 — IGO ANNUAL REPORT 2019
Year ended 30 June 2018
Opening net book amount
Additions
Transfer from (to) mine properties
in production
Disposal of subsidiary
Closing net book amount
(a)
Impairment
(b) Recognition and measurement
34,100
17,823
13,052
-
-
-
-
-
-
-
-
-
5,250
2,486
1,473
(9,209)
2,843
2,675
-
-
34,100
17,823
13,052
-
5,518
* Additions during the current financial year includes $22,243,000 relating to acquisition of the Southern Hills tenements.
The Group did not recognise any impairment charges during the current or previous reporting period.
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 STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
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
Year ended 30 June 2019
Opening net book amount
Additions*
Transfer from (to) mine properties
in production
34,100
-
17,823
-
13,052
-
-
-
-
Closing net book amount
34,100
17,823
13,052
-
-
-
-
Other
$'000
5,518
27,478
(2,774)
30,222
Year ended 30 June 2018
Opening net book amount
Additions
Transfer from (to) mine properties
in production
Disposal of subsidiary
34,100
-
17,823
-
13,052
-
-
-
-
-
-
-
5,250
2,486
1,473
(9,209)
2,843
2,675
-
-
Closing net book amount
34,100
17,823
13,052
-
5,518
Total
$'000
70,493
27,478
(2,774)
95,197
73,068
5,161
1,473
(9,209)
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.
Notes to the consolidated financial statements
Exploration and evaluation expenditure is expensed to the profit or loss as incurred except in the following circumstances in
30 June 2019
which case the expenditure may be capitalised:
(continued)
•
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.
15 Exploration and evaluation (continued)
•
(b) Recognition and 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.
Independence Group NL
30
(c) Key estimates and judgements
The recoverability of
development and commercial exploitation, or alternatively, sale of the respective area of interest.
the carrying amount of
the exploration and evaluation assets is dependent on the successful
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
Independence Group NL
31
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Capital structure and financing activities
Notes to the consolidated financial statements
30 June 2019
(continued)
This section of
accumulated losses and dividends, including accounting policies relevant to understanding these items.
the notes provides further information about
the Group's borrowings, contributed equity, reserves,
16 Borrowings
Current
Unsecured
Bank loans
Total current borrowings
Non-current
Unsecured
Bank loans
Total non-current borrowings
(a) Corporate loan facility
2019
$'000
2018
$'000
56,226
56,226
56,226
56,226
28,363
28,363
84,589
84,589
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
$550,000,000 unsecured committed term finance facility comprising: a five year $350,000,000 amortising loan facility and a
five year $200,000,000 revolving loan facility. Subsequent restructures, cancellations and repayments of
the Facility
Agreement have resulted in an outstanding balance of
the amortising loan facility of $85,716,000 which expires in
September 2020.
Transaction costs are accounted for under the effective interest rate method. These costs are incremental costs that are
directly attributable to the loan and include loan origination fees, commitment fees and legal fees. At 30 June 2019, a
balance of unamortised transaction costs of $1,127,000 (2018: $2,043,000) was offset against the bank loans contractual
liability of $85,716,000 (2018: $142,858,000). Total capitalised transaction costs to 30 June 2019 are $5,495,000 (2018:
$5,495,000).
The Facility Agreement has certain financial covenants that the Company has to comply with. All such financial covenants
have been complied with in accordance with the Facility Agreement.
(b) Assets pledged as security
There were no assets pledged as security at 30 June 2019 (2018: $nil).
Independence Group NL
32
94 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
16 Borrowings (continued)
(c) Financing arrangements
The Group had access to the following financing arrangements at the reporting date:
Total facilities
Corporate debt facility
Contingent instrument facility1
Facilities used as at reporting date
Corporate debt facility
Contingent instrument facility
2019
$'000
85,716
1,131
86,847
85,716
1,131
86,847
2018
$'000
142,858
1,311
144,169
142,858
1,311
144,169
1. This facility provides financial backing in relation to non-performance of third party guarantee requirements.
(d) Recognition and measurement
(i) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in
profit or loss over the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs and
amortised over the period of the remaining facility.
(ii) Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying
asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale.
Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Other borrowing costs are expensed in the period in which they are incurred.
17 Contributed equity
(a) Share capital
Fully paid issued capital
2019
$'000
2018
$'000
1,895,855
1,879,094
Independence Group NL
33
IGO ANNUAL REPORT 2019 — 95
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
17 Contributed equity (continued)
(b) Movements in ordinary share capital
Details
Balance at beginning of financial year
Issue of shares under the Employee Incentive
Plan
Issue of shares on acquisition of Southern
Hills Tenements
2019
Number of shares
2019
$'000
2018
Number of shares
2018
$'000
586,923,035
1,879,094
586,747,023
1,878,469
459,376
1,036
176,012
3,095,408
15,725
-
625
-
Balance at end of financial year
590,477,819
1,895,855
586,923,035
1,879,094
(c) Capital management
The Board’s policy is to preserve a strong balance sheet so as to maintain investor, creditor and market confidence, and to
sustain ongoing and future development of the business. Demonstrating the Company's balance sheet strength are various
financing and liquidity ratios, supported by strong EBITDA margins:
Current ratio (times)
Debt to equity
Underlying EBITDA margin
2019
4.4
5%
43%
2018
2.9
8%
44%
including reserves, and net debt/(cash). As at 30 June 2019 this totalled
The Group's capital comprises equity,
$1,586,568,000 (2018: $1,782,997,000), a decrease of 11% over 2018. Contributing to this decrease was the reduction in
debt as a result of debt repayments of $57,142,000 during the year and the strong cash flow generation during the year from
deploying our existing capital.
The Company's capital management framework aims to respond to a dynamic commodity and investment cycle. To this end,
the goals of the framework are to:
•
•
•
•
Ensure that the Company's operations are able to generate cash flows safely, at appropriate margins, and according to
plan;
Provide a buffer from future potential adverse price movements as a result of the Company operating in a cyclical
commodity price environment;
Raise and repay debt and invest in growth and replenish and acquire new assets; and
Raise capital and to repay capital to shareholders by way of dividends or capital returns in accordance with the
Company's capital allocation policy. This policy targets the return of between 15 and 25 percent of free cash flow to
shareholders with the policy to be reviewed every two years based on financial results, outlook for commodity prices,
long-term growth capital requirements for the business and balance sheet strength.
None of the Group’s entities are currently subject to externally imposed capital requirements.
There were no changes in the Group’s approach to capital management during the year.
(d) Recognition and measurement
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds. Ordinary shares entitle the holder to participate in dividends
and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. Every
holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is
entitled to one vote.
Independence Group NL
34
96 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 18 Reserves and accumulated losses
(a) Reserves
Hedging reserve
Share-based payments reserve
Foreign currency translation reserve
Notes to the consolidated financial statements
30 June 2019
(continued)
2019
$'000
339
15,427
11
15,777
2018
$'000
1,393
13,340
38
14,771
(i) Movements in reserves
The following table shows a breakdown of the movements in these reserves during the year. A description of the nature and
purpose of each reserve is provided below the table.
Balance at 1 July 2018
Revaluation - gross
Deferred tax
Transfer to profit or loss - gross
Deferred tax
Currency translation differences -
current period
Share-based payment expenses
Issue of shares under the Employee
Incentive Plan
Balance at 30 June 2019
Balance at 1 July 2017
Revaluation - gross
Deferred tax
Transfer to profit or loss - gross
Deferred tax
Transfer to accumulated losses
Currency translation differences -
current period
Share-based payment expenses
Issue of shares under the Employee
Incentive Plan
Hedging
reserve
$'000
1,393
515
(154)
(2,021)
606
-
-
-
339
(391)
4,504
(1,351)
(1,955)
586
-
-
-
-
Share- based
payments
reserve
$'000
Acquisition
reserve
$'000
Foreign
currency
translation
reserve
$'000
13,340
-
-
-
-
-
3,123
(1,036)
15,427
10,698
-
-
-
-
-
-
3,267
(625)
-
-
-
-
-
-
-
-
-
3,142
-
-
-
-
(3,142)
-
-
-
-
38
-
-
-
-
(27)
-
-
11
(4)
-
-
-
-
-
42
-
-
38
Balance at 30 June 2018
1,393
13,340
Independence Group NL
Total
$'000
14,771
515
(154)
(2,021)
606
(27)
3,123
(1,036)
15,777
13,445
4,504
(1,351)
(1,955)
586
(3,142)
42
3,267
(625)
14,771
35
IGO ANNUAL REPORT 2019 — 97
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
18 Reserves and accumulated losses (continued)
(a) Reserves (continued)
(ii) Nature and purpose of reserves
Hedging reserve
The hedging reserve is used to record gains or losses on derivatives that are designated and qualify as cash flow hedges
and that are recognised in other comprehensive income. Amounts are reclassified to profit or loss when the associated
hedged transaction affects profit or loss.
Share-based payments reserve
The share-based payments reserve is used to record the value of share-based payments provided to employees, including
key management personnel, as part of their remuneration. Refer to note 25 for further details of these plans.
Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entity are recognised in other comprehensive income
and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net
investment is disposed of.
(b) Accumulated losses
Movements in accumulated losses were as follows:
Balance at beginning of financial year
Net profit for the period
Dividends paid during the period
Transfer from acquisition reserve
Balance at end of financial year
19 Dividends paid and proposed
(a) Ordinary shares
Notes
19
2019
$'000
(115,038)
76,085
(23,619)
-
(62,572)
2018
$'000
(159,130)
52,686
(11,736)
3,142
(115,038)
Final ordinary dividend for the year ended 30 June 2018 of 2 cents (2017: 1 cent) per fully
paid share
Interim dividend for the year ended 30 June 2019 of 2 cents (2018: 1 cent) per fully paid
share
Total dividends paid during the financial year
(b) Dividends not recognised at the end of the reporting period
In addition to the above dividends, since year end the Directors have recommended the
payment of a final dividend of 8 cents per fully paid ordinary share, franked to 97% (2018:
2 cents per fully paid ordinary share fully franked), based on tax paid at 30%. The
aggregate amount of the proposed dividend expected to be paid on 26 September
[2019out of retained earnings at [30 June 2019 but not recognised as a liability at year
end, is:
2019
$'000
11,809
11,810
23,619
2018
$'000
5,868
5,868
11,736
2019
$'000
2018
$'000
47,264
11,809
Independence Group NL
29
98 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 19 Dividends paid and proposed (continued)
Notes to the consolidated financial statements
30 June 2019
(continued)
Notes to the consolidated financial statements
30 June 2019
(continued)
(b) Dividends not recognised at the end of the reporting period (continued)
19 Dividends paid and proposed (continued)
(ii) Dividends not recognised at the end of the reporting period (continued)
(c) Franked dividends
(iii) Franked dividends
Franking credits available for subsequent reporting periods based on a tax rate of 30%
(2018: 30%)
2019
$'000
2019
$'000
19,661
2018
$'000
2018
$'000
29,799
Franking credits available for subsequent reporting periods based on a tax rate of 30%
The above amounts are calculated from the balance of the franking account as at the end of the reporting period, adjusted
(2018: 30%)
29,799
for:
19,677
The above amounts are calculated from the balance of the franking account as at the end of the reporting period, adjusted
franking credits that will arise from the payment of the amount of the provision for income tax;
(a)
for:
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and
(b)
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
(c)
franking credits that will arise from the payment of the amount of the provision for income tax;
(a)
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and
(b)
The impact on the franking account of the dividend recommended by the Directors since the end of the reporting period, but
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
(c)
not recognised as a liability at the reporting date, will be a reduction in the franking account of $19,648,000 (2018:
$5,061,000).
The impact on the franking account of the dividend recommended by the Directors since the end of the reporting period, but
not recognised as a liability at the reporting date, will be a reduction in the franking account of $19,677,000 (2018:
(d) Recognition and measurement
$5,061,000).
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of
(d) Recognition and measurement
the entity, on or before the end of the reporting period but not distributed at the end of the reporting period. A provision for
dividends is not recognised as a liability unless the dividends are declared, determined or publicly recommended on or
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of
before the reporting date.
the entity, on or before the end of the reporting period but not distributed at the end of the reporting period. A provision for
dividends is not recognised as a liability unless the dividends are declared, determined or publicly recommended on or
before the reporting date.
Independence Group NL
Independence Group NL
30
37
IGO ANNUAL REPORT 2019 — 99
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
Risk
This section of the notes includes information on the Group's exposure to various risks and shows how these could affect
the Group's financial position and performance.
20 Derivatives
The Group has the following derivative financial instruments:
Current assets
Diesel hedging contracts - cash flow hedges
(a)
Instruments used by the Group
2019
$'000
484
484
2018
$'000
1,990
1,990
Derivative financial instruments may be used by the Group in the normal course of business in order to hedge exposure to
fluctuations in foreign exchange rates, commodity prices and diesel prices.
The derivative financial instruments are classified as held for trading and accounted for at fair value through profit or loss
unless they are designated as cash flow hedges. The Group's accounting policy for its cash flow hedges is set out below.
The fair value of the derivative instruments at the reporting date is reflected in current and non-current assets and liabilities
in the balance sheet and is calculated by comparing the contracted rate to the market rates for derivatives with the same
length of maturity.
Refer to note 21 and below for details of the diesel fuel risk being mitigated by the Group’s derivative instruments as at 30
June 2019 and 30 June 2018.
Diesel
The Group held various diesel fuel hedging contracts at 30 June 2019 and 30 June 2018 to reduce the exposure to future
increases in the price of the Singapore gasoil component of landed diesel fuel cost.
The following table details the diesel fuel hedging contracts outstanding at the reporting date:
Litres of oil ('000)
Weighted average price
(AUD/litre)
2019
8,756
8,818
17,574
2018
5,400
2,700
8,100
2019
0.67
0.67
0.67
2018
0.51
0.51
0.51
Fair value
2019
$'000
272
212
484
2018
$'000
1,342
648
1,990
0 - 6 months
6 -12 months
Total
(b) Recognition and measurement
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value
depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
The Group designates certain derivatives as either:
•
•
hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges); or
hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly probable
forecast transactions (cash flow hedges).
Independence Group NL
38
100 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
20 Derivatives (continued)
(b) Recognition and measurement (continued)
The Group documents, at the inception of the hedging transaction, the relationship between hedging instruments and
hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group
also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used
in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of
hedged items.
The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the
hedged item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of the hedged
item is less than 12 months. Trading derivatives are classified as a current asset or liability. Movements in the hedging
reserve in shareholder's equity are shown in note 18.
(i) Fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in profit or loss,
together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
(ii) Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is
recognised in the hedging reserve in equity, limited to the cumulative change in the fair value of the hedged item on a
present value basis from the inception of the hedge. The gain or loss relating to the ineffective portion is recognised
immediately in profit or loss.
Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss.
The gain or loss relating to the effective portion of forward foreign exchange contracts hedging export sales is recognised in
profit or loss within 'sales revenue'.
The changes in the time value component of options that relate to hedged items are recognised with other comprehensive
income in the hedging reserve within equity. The cumulative changes accumulated in the hedge reserve are reclassified to
the profit or loss when the hedged item affects profit or loss.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge
accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast
transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the
cumulative gain or loss that was reported in equity is immediately reclassified to profit or loss.
(iii) Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument
that does not qualify for hedge accounting are recognised immediately in profit or loss.
21 Financial risk management
This note explains the Group's exposure to financial risks and how these risks could affect the Group's future financial
performance.
Financial instruments are held by the Group for various purposes, including:
• Operational: Activities of the Group generate financial
instruments which include cash, trade receivables and trade
payables;
•
Financing: The Company may enter into debt instruments in order to finance both internal growth opportunities and
acquire assets. Types of instruments used include syndicated and other bank loans and hire purchase agreements.
Surplus funds are held either at call or as short-term deposits; and
Independence Group NL
39
IGO ANNUAL REPORT 2019 — 101
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
21 Financial risk management (continued)
•
Risk management: The Group is exposed to commodity and foreign exchange risk which is overseen by management,
under policies approved by the Board. Management
risks in close
co-operation with the Group’s operating units. Financial instruments used by the Group to mitigate these risks include
forward exchange contracts, commodity swaps and forward sales agreements.
identifies, evaluates and hedges financial
By holding these financial instruments, the Group exposes itself to risk. The Board reviews and agrees the Group's policies
for managing each of these risks, which are summarised below:
(a) Market risk
(i) Foreign currency risk
As the Group’s sales revenues for base and precious metals are denominated in United States dollars (USD) and the
majority of operating costs are denominated in Australian dollars (AUD), the Group’s cash flow is exposed to movements in
the AUD:USD exchange rate. The Group may mitigate this risk through the use of derivative instruments, including, but not
limited to, forward contracts denominated in AUD.
Financial instruments, including derivative instruments, denominated in USD and then converted into the functional currency
(i.e. AUD) were as follows:
Financial assets
Cash and cash equivalents
Trade receivables
Net financial assets
2019
$'000
1,891
24,568
26,459
2018
$'000
11,578
50,858
62,436
The cash balance above only represents the cash held in the USD bank accounts at the reporting date and converted into
AUD at the 30 June 2019 AUD:USD exchange rate of 0.7013 (2018: 0.7391). The remainder of the cash balance of
$346,317,000 (2018: $127,110,000) was held in AUD and therefore not exposed to foreign currency risk.
The trade receivables amounts represent the USD denominated trade debtors. All other receivables were denominated in
AUD at the reporting date.
The following table summarises the Group’s sensitivity of financial instruments held at 30 June 2019 to movements in the
AUD:USD exchange rate, with all other variables held constant.
Sensitivity of financial instruments to foreign currency movements
Increase/decrease in foreign exchange rate
Increase 5.0%
Decrease 5.0%
Impact on post-tax profit
2019
$'000
(702)
961
2018
$'000
(2,605)
2,879
(ii) Commodity price risk
The Group’s sales revenues are generated from the sale of nickel, copper, cobalt, gold and silver. Accordingly, the Group’s
revenues, derivatives and trade receivables are exposed to commodity price risk fluctuations, primarily nickel, copper,
cobalt, gold and silver.
The markets for base and precious metals are freely traded and can be volatile. As a relatively small producer, the Group
has no ability to influence commodity prices. The Group mitigates this risk through derivative instruments, including, but not
limited to, quotational period hedging, forward contracts and collar arrangements.
Independence Group NL
40
102 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
21 Financial risk management (continued)
(a) Market risk (continued)
(ii) Commodity price risk (continued)
Nickel
Nickel concentrate sales have an average price finalisation period of two to three months until the sale is finalised with the
customer.
It is the Board’s policy to hedge between 0% and 50% of total nickel production tonnes.
Copper
Copper concentrate sales during the year had an average price finalisation period of up to three months from shipment date.
It is the Board’s policy to hedge between 0% and 50% of total copper production tonnes.
Gold
It is the Board’s policy to hedge between 0% and 50% of forecast gold production from the Company’s 30% interest in the
Tropicana Gold Mine.
Diesel fuel
It is the Board's policy to hedge up to 75% of forecast diesel fuel usage. Diesel fuel price comprises a number of
components, including Singapore gasoil and various other costs such as shipping and insurance. The total of all costs
represents the wholesale or Terminal Gate Price (TGP) of diesel. The Group only hedges the Singapore gasoil component
of the diesel TGP, which represents approximately 40% of the total diesel price.
At the reporting date, the carrying value of the financial
follows:
instruments exposed to commodity price movements were as
Financial instruments exposed to commodity price movements
Financial assets
Trade receivables
Derivative financial instruments - diesel hedging contracts
Net exposure
2019
$'000
26,501
484
26,985
2018
$'000
44,705
1,990
46,695
The following table summarises the sensitivity of financial instruments held at 30 June 2019 to movements in the nickel
price, with all other variables held constant. Trade receivables valuation uses a sensitivity analysis of 5.0% (2018: 5.0%).
Sensitivity of financial instruments to nickel price movements
Increase/decrease in nickel price
Increase
Decrease
Impact on post-tax profit
2019
$'000
2,924
(2,924)
2018
$'000
3,326
(3,326)
The following table summarises the sensitivity of financial instruments held at 30 June 2019 to movements in the copper
price, with all other variables held constant. Trade receivables valuation uses a sensitivity analysis of 5.0% (2018: 5.0%).
Independence Group NL
41
IGO ANNUAL REPORT 2019 — 103
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
21 Financial risk management (continued)
(a) Market risk (continued)
(ii) Commodity price risk (continued)
Sensitivity of financial instruments to copper price movements
Increase/decrease in copper price
Increase
Decrease
Impact on post-tax profit
2019
$'000
949
(949)
2018
$'000
1,250
(1,250)
The following table summarises the sensitivity of financial instruments held at 30 June 2019 to movements in the Singapore
gasoil price, with all other variables held constant.
Sensitivity of financial instruments to Singapore gasoil price movements
Increase/decrease in Singapore gasoil price
Increase 20% (2018: 20%)
Decrease 20% (2018: 20%)
Impact on other components of
equity
2019
$'000
1,713
(1,713)
2018
$'000
852
(852)
(iii) Equity price risk sensitivity analysis
The following sensitivity analysis has been determined based on the exposure to equity price risks at the reporting date.
Each equity instrument is assessed on its individual price movements with the sensitivity rate based on a reasonably
possible change of 20% (2018: 20%). At reporting date, if the equity prices had been higher or lower, net profit for the year
would have increased or decreased by $3,854,000 (2018: $3,389,000).
(iv) Cash flow and fair value interest rate risk
The Group’s exposure to interest rate risk is the risk that a financial instrument’s value will fluctuate as a result of changes in
market
the Group had the following exposure to interest rate risk on financial
instruments:
the reporting date,
interest rates. At
Financial assets
Cash and cash equivalents
Financial liabilities
Bank loans
30 June 2019
30 June 2018
Weighted
average
interest rate
%
1.9%
1.9%
3.7%
3.7%
Weighted
average
interest rate
%
1.5%
1.5%
3.8%
3.8%
Balance
$'000
348,208
348,208
85,716
85,716
Balance
$'000
138,688
138,688
142,858
142,858
The sensitivity analysis below has been determined based on the exposure to interest rates at the reporting date and the
stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period.
Independence Group NL
42
104 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
21 Financial risk management (continued)
(a) Market risk (continued)
(iv) Cash flow and fair value interest rate risk (continued)
Sensitivity of interest revenue and expense to interest rate movements
Interest revenue
Increase 1.0% (2018: 1.0%)
Decrease 1.0% (2018: 1.0%)
Interest expense
Increase 1.0% (2018: 1.0%)
Decrease 1.0% (2018: 1.0%)
(b) Credit risk
Impact on post-tax profit
2019
$'000
2,425
(2,425)
(600)
600
2018
$'000
957
(957)
(1,000)
1,000
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. The Group has a strict code of credit, including only transacting with high quality financial institutions and customers
with an appropriate credit history. The maximum exposure to credit risk at the reporting date to recognised financial assets is
the carrying amount, net of any provisions for impairment of those assets, as disclosed in the balance sheet and notes to the
financial statements. The Group does not hold any collateral.
The maximum exposure to credit risk at the reporting date was as follows:
Financial assets
Cash and cash equivalents
Trade receivables
Other receivables
Financial assets at fair value through profit or loss
Derivative financial instruments
2019
$'000
2018
$'000
348,208
24,568
36,017
27,531
484
436,808
138,688
50,858
70,796
24,294
1,990
286,626
(i)
Impairment of financial assets
The Group has two types of financial assets that are subject to the expected credit loss model:
•
•
trade receivables, and
other receivables and financial assets.
While cash and cash equivalents are also subject to the impairment requirements of AASB 9, no impairment loss was
identified.
Trade receivables
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through
the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative
across all customers of
the Group based on recent sales experience, historical collection rates and forward-looking
information that is available.
The Group has policies in place to ensure that sales of products are made to customers with an appropriate credit history.
Independence Group NL
43
IGO ANNUAL REPORT 2019 — 105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
21 Financial risk management (continued)
(b) Credit risk (continued)
Gold bullion sales
Credit risk arising from the sale of gold bullion to the Company's customer is low as the payment by the customer (being The
Perth Mint Australia) is guaranteed under statute by the Western Australian State Government. In addition, sales are made
to high credit quality financial institutions, hence credit risk arising from these transactions is considered to be low.
Nickel, copper and cobalt concentrate sales
Credit risk arising from sales to customers is managed by contracts that stipulate a provisional payment of between 90%
and 100% of the estimated value of each sale. Provisional payments are predominantly made via an unconditional and
irrevocable letter of credit, governed by the laws of Western Australia, or alternatively via direct payment from the customer,
and are expected to be received within a few business days of the sale. Final payment is dependent on the quotation period
of the respective purchase contract, and is also made via an irrevocable letter of credit or direct payment from the customer.
Due to the large size of concentrate shipments, there are a relatively small number of transactions each month and therefore
each transaction and receivable balance is actively managed on an ongoing basis, with attention to timing of customer
payments and imposed credit limits. The resulting exposure to impairment losses is not considered significant.
Other receivables and financial assets
The Group recognises a loss allowance for expected credit losses on other financial assets which are either measured at
amortised cost, fair value through profit or loss or fair value through other comprehensive income. The measurement of the
loss allowance depends upon the Group's assessment at the end of each reporting period as to whether the financial
instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information
that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected
credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable
to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired, or where it
is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit
losses. The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is recognised within
other comprehensive income. In all other cases, the loss allowance is recognised in profit or loss.
In respect of cash and cash equivalents,
financial assets at fair value through profit or loss and derivative financial
instruments, the Group's exposure to credit risk arises from potential default of the counterparty, with a maximum exposure
equal to the carrying amount of these instruments. The Group does not hold any credit derivatives to offset its credit
exposure.
Derivative counterparties and cash transactions are restricted to high credit quality financial institutions.
(ii) Significant estimates and judgements
Impairment of financial assets
The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates. The Group
uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Group’s
past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
(c) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial liabilities as they fall due. The Group’s approach
to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when
due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s
reputation. Management and the Board monitors liquidity levels on an ongoing basis.
Independence Group NL
44
106 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
21 Financial risk management (continued)
(c) Liquidity risk (continued)
Maturities of financial liabilities
The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities. The tables are
based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required
to pay.
Contractual maturities of financial liabilities
At 30 June 2019
Trade and other payables
Bank loans*
At 30 June 2018
Trade and other payables
Bank loans*
* Includes estimated interest payments.
(d) Recognised fair value measurements
Less than 6
months
$'000
6 - 12
months
$'000
Between
1 and 5
years
$'000
Total
contractual
cash
flows
$'000
Carrying
amount
$'000
49,902
29,100
79,002
56,586
29,652
86,238
-
29,900
29,900
-
31,544
31,544
-
28,842
28,842
-
88,163
88,163
49,902
87,842
49,902
84,589
137,744
134,491
56,586
149,359
56,586
140,815
205,945
197,401
(i) Fair value hierarchy
The fair value of financial assets and liabilities must be estimated for recognition and measurement or for disclosure
purposes.
AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level of the following fair value
measurement hierarchy:
(a)
(b)
quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices) (level 2); and
inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).
(c)
The following table presents the Group’s assets and liabilities measured and recognised at fair value at 30 June 2019 and
30 June 2018 on a recurring basis.
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
At 30 June 2019
Financial assets
Listed investments
Derivative instruments
Diesel hedging contracts
27,531
-
27,531
-
484
484
-
-
-
27,531
484
28,015
Independence Group NL
45
IGO ANNUAL REPORT 2019 — 107
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 21 Financial risk management (continued)
(d) Recognised fair value measurements (continued)
(i) Fair value hierarchy (continued)
At 30 June 2018
Financial assets
Listed investments
Derivative instruments
Diesel hedging contracts
Notes to the consolidated financial statements
30 June 2019
(continued)
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
24,294
-
24,294
-
1,990
1,990
-
-
-
24,294
1,990
26,284
The Group did not measure any financial assets or financial liabilities at fair value on a non-recurring basis as at 30 June
2019 and did not transfer any fair value amounts between the fair value hierarchy levels during the year ended 30 June
2019.
(ii) Valuation techniques used to determine level 1 fair values
instruments traded in active markets (such as publicly traded derivatives and trading and
The fair value of financial
available-for-sale securities) is based on quoted market prices at the end of the reporting period. The quoted market price
used for financial assets held by the Group is the current bid price. These instruments are included in level 1.
(iii) Valuation techniques used to determine level 2 and level 3 fair values
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is
determined using valuation techniques. These valuation techniques maximise the use of observable market data where it is
available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument
are observable, the instrument is included in level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Specific valuation techniques used to value financial instruments include:
•
•
The use of quoted market prices or dealer quotes for similar instruments.
The fair value of commodity and forward foreign exchange contracts is determined using forward commodity and
exchange rates at the reporting date.
• Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining financial
instruments.
All of the resulting fair value estimates are included in level 2.
Notes to the consolidated financial statements
30 June 2019
(continued)
(iv) Fair value of other financial instruments
21 Financial risk management (continued)
The Group also has a number of financial instruments which are not measured at fair value in the balance sheet. These
instruments had the following fair value at the reporting date.
(d) Recognised fair value measurements (continued)
(iv) Fair value of other financial instruments (continued)
30 June 2019
30 June 2018
Carrying
amount
$'000
348,208
348,208
56,226
56,226
28,363
28,363
Fair value
$'000
Carrying
amount
$'000
Fair value
$'000
348,208
348,208
138,688
138,688
138,688
138,688
57,142
57,142
28,574
28,574
56,226
56,226
84,589
84,589
57,142
57,142
46
85,716
85,716
Current assets
Cash and cash equivalents
Current liabilities
Bank loans
Independence Group NL
Non-current liabilities
Bank loans
108 — IGO ANNUAL REPORT 2019
Independence Group NL
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
Group structure
This section of the notes provides information which will help users understand how the group structure affects the financial
position and performance of the Group.
22 Subsidiaries
(a) Significant investments in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of Independence Group NL and the
subsidiaries listed in the following table:
Name of entity
Independence Long Pty Ltd
Independence Newsearch Pty Ltd
Independence Stockman Parent Pty Ltd
Independence Stockman Project Pty Ltd
Independence Windward Pty Ltd
Flinders Prospecting Pty Ltd
Independence Europe Pty Ltd
Independence Nova Holdings Pty Ltd
Independence Nova Pty Ltd
Independence Group Europe AB
IGO Downstream Technologies Pty Ltd
Note
(a),(b)
(a)
(a)
Country of
incorporation
Equity holding
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Sweden
Australia
2019
%
-
100
100
100
100
100
100
100
100
100
100
2018
%
100
100
100
100
100
100
100
100
100
100
-
(a)
(b)
These subsidiaries have been granted relief from the necessity to prepare financial reports in accordance with ASIC
Corporations (Wholly-owned Companies) Instrument 2016/785 issued by the Australian Securities and Investments
Commission. For further information refer to note 28.
Independence Long Pty Ltd was disposed of on 31 May 2019.
(b) Sale of Independence Long Pty Ltd
On 23 May 2019, the Company announced that it had entered into an agreement with Mincor Resources NL (Mincor) to
divest the Long Operation for a total consideration of up to $9,500,000. The consideration comprised $3,500,000 in Mincor
shares on completion of the transaction and an additional $6,000,000 in payments contingent upon future production from
the mine. The transaction was completed on 31 May 2019.
The sale of the Long Operation resulted in a net gain on sale before tax of $3,010,000, which is included in Other income in
profit or loss.
(c) Sale of Independence Jaguar Pty Ltd
In the previous financial year, the Company divested its Jaguar Operation to CopperChem Limited (CopperChem) for a total
consideration of $73,200,000. The consideration comprised $25,000,000 in cash on completion of the transaction and an
additional $48,200,000 in deferred cash payments.
The discounted values (using a discount rate of 3.5%) of
$15,520,000) and $14,994,000 (2018: $29,480,000) are shown in current and non-current receivables respectively.
the outstanding cash proceeds of $15,519,000 (2018:
Notes to the consolidated financial statements
30 June 2019
(continued)
The sale of the Jaguar Operation resulted in a net loss on sale before tax of $423,000 (2018: profit of $2,541,000), which is
included in Other income in profit or loss. Net cash proceeds of $16,764,000 (2018: $23,140,000) are shown as Net cash
proceeds on sale of Jaguar Operation in investing activities in the Statement of cash flows.
22 Subsidiaries (continued)
(d) Principles of consolidation
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity
when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power to direct the activities of the entities. Subsidiaries are fully consolidated from the date
Independence Group NL
48
on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group (refer to note 30(c)(i)).
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
the Group.
IGO ANNUAL REPORT 2019 — 109
Independence Group NL
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
Unrecognised items
This section of the notes provides information about items that are not recognised in the financial statements as they do not
yet satisfy the recognition criteria but could potentially have an impact on the Group's financial position and performance.
23 Commitments and contingencies
(a) Capital commitments
Significant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:
Mine properties in development
(b) Commitments
(a) Leasing commitments
Operating lease commitments
Commitments for minimum lease payments in relation to non-cancellable operating leases
are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
Total minimum lease payments
2019
$'000
30,666
30,666
2018
$'000
-
-
2019
$'000
2018
$'000
10,635
37,397
26,080
74,112
10,264
39,093
35,019
84,376
(c) Gold delivery commitments
Within one year
Later than one but not later than five years
Total
Gold for
physical
delivery
oz
76,020
49,320
125,340
Average
contracted
sale price
A$/oz
1,818
1,814
1,816
Value of
committed
sales
$'000
138,182
89,452
227,634
The physical gold delivery contracts are settled by the physical delivery of gold as per the contract terms. The contracts are
accounted for as sales contracts with revenue recognised once gold has been delivered to the counterparties. The physical
gold delivery contracts are considered to sell a non-financial item and therefore do not fall within the scope of AASB 139
Financial Instruments: Recognition and Measurement. Hence, no derivatives have been recognised in respect of these
contracts.
(d) Contingencies
The Group had guarantees outstanding at 30 June 2019 totalling $1,131,000 (2018: $1,311,000) which have been granted
in favour of various third parties. The guarantees primarily relate to environmental and rehabilitation bonds at the various
mine sites.
Independence Group NL
50
110 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
24 Events occurring after the reporting period
On 29 August 2019, the Company announced a final dividend of 8 cents per share, franked to 97%, to be paid on 26
September 2019.
Other than the above, there has not arisen in the interval between the end of the financial year and the date of this report
any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to
affect significantly the operations of the consolidated entity, the results of those operations, or the state of affairs of the
consolidated entity, in future financial years, other than as stated elsewhere in the financial report.
Other information
This section of the notes includes other information that must be disclosed to comply with the accounting standards and
other pronouncements, but are not considered critical in understanding the financial performance or position of the Group.
25 Share-based payments
The Group provides benefits to employees (including executive directors) of the Group through share-based incentives.
Information relating to these schemes is set out below.
(a) Employee Incentive Plan
The Independence Group NL Employee Incentive Plan (EIP) was approved by shareholders at the Annual General Meeting
of the Company in November 2016. The EIP incorporates both broad based equity participation for eligible employees as
well as key executive incentive schemes designed to provide long-term incentives to senior management (including
executive directors) to deliver long-term shareholder returns.
The EIP comprised the following schemes during the current financial year:
•
•
•
•
Long-term incentive (LTI) - performance rights;
Service rights;
Employee share ownership award; and
Employee salary sacrifice share plan.
LTI - Performance Rights
Under the LTI scheme, participants are granted share rights which will only vest if certain performance conditions are met
and the employees are still employed by the Group at the end of the vesting period. Participation in the LTI scheme is at the
Board’s discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits.
Equity settled awards outstanding
Set out below are summaries of share rights granted under the LTI scheme:
2019
2018
Outstanding at the beginning of the year
Rights issued during the year
Rights vested during the year
Rights lapsed during the year
25 Share-based payments (continued)
Rights cancelled during the year
Equity settled awards outstanding (continued)
Outstanding at the end of the year
Number of
share rights
Weighted
average fair
value at grant
date
Weighted
average fair
value at grant
date
Notes to the consolidated financial statements
2.00
30 June 2019
2.46
(continued)
-
2.34
2.22
1,648,285
1,246,722
-
(622,637)
(229,751)
2.14
2.67
1.34
1.51
2.28
Number of
share rights
2,042,619
953,229
(281,388)
(326,175)
(19,144)
2,369,141
2.54
2,042,619
2.14
The share-based payments expense relating to performance rights included in profit or loss for the year totalled $1,883,700
(2018: $2,034,404).
Fair value of performance rights granted
The fair value of the share rights granted during the year ended 30 June 2019 are determined using a trinomial tree which
has been adopted by the Boyle and Law (1994) node alignment algorithm to improve accuracy, with the following inputs:
Independence Group NL
44
Fair value inputs
CEO
Senior management
Other employees
Grant date
Vesting date
Share price at grant date
Fair value estimate at grant date
Expected share price volatility (%)
Expected dividend yield (%)
Expected risk-free rate (%)
23 November 2018
1 July 2021
3.89
2.17
47
1.29
2.11
Vesting conditions of performance rights granted
28 September 2018
1 July 2021
4.66
2.81
48
1.07
2.08
28 September 2018
1 July 2021
4.66
2.81
48
1.07
2.08
IGO ANNUAL REPORT 2019 — 111
Vesting of the performance rights granted to executive directors and executives during the year is based on two equally
weighted performance hurdles as follows:
•
•
Relative TSR; and
Absolute TSR.
Relative TSR
measurement period.
The relative TSR scorecard for the three year measurement period will be determined based on a percentile ranking of the
Company's TSR results relative to the TSR of each of the companies in the peer group over the same three year
The peer group is to comprise the constituents of the S&P ASX 300 Metals and Mining Index.
The vesting schedule of the performance rights subject to relative TSR testing is as follows:
Relative TSR performance
Less than 50th percentile
Between 50th and 75th percentile
75th percentile or better
50% plus pro-rata straight line percentage between 50%
Level of vesting
Zero
and 100%
100%
The Company's TSR performance for share rights issued during the current financial year will be assessed against the
following members of the S&P ASX 300 Metals and Mining Index:
Independence Group NL
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 25 Share-based payments (continued)
Equity settled awards outstanding (continued)
Notes to the consolidated financial statements
30 June 2019
(continued)
Notes to the consolidated financial statements
30 June 2019
(continued)
25 Share-based payments (continued)
The share-based payments expense relating to performance rights included in profit or loss for the year totalled $1,883,700
Equity settled awards outstanding (continued)
(2018: $2,034,404).
Fair value of performance rights granted
The share-based payments expense relating to performance rights included in profit or loss for the year totalled $1,883,700
(2018: $2,034,404).
The fair value of the share rights granted during the year ended 30 June 2019 are determined using a trinomial tree which
has been adopted by the Boyle and Law (1994) node alignment algorithm to improve accuracy, with the following inputs:
Fair value of performance rights granted
CEO
CEO
Other employees
Other employees
Senior management
Senior management
The fair value of the share rights granted during the year ended 30 June 2019 are determined using a trinomial tree which
Fair value inputs
has been adopted by the Boyle and Law (1994) node alignment algorithm to improve accuracy, with the following inputs:
23 November 2018
28 September 2018
Grant date
1 July 2021
1 July 2021
Vesting date
Fair value inputs
4.66
3.89
Share price at grant date
2.81
2.17
Fair value estimate at grant date
28 September 2018
23 November 2018
Grant date
48
47
Expected share price volatility (%)
1 July 2021
1 July 2021
Vesting date
1.07
1.29
Expected dividend yield (%)
3.89
Share price at grant date
4.66
2.08
2.11
Expected risk-free rate (%)
2.81
2.17
Fair value estimate at grant date
Expected share price volatility (%)
47
48
1.29
Expected dividend yield (%)
1.07
Vesting conditions of performance rights granted
Expected risk-free rate (%)
2.11
2.08
Vesting of the performance rights granted to executive directors and executives during the year is based on two equally
weighted performance hurdles as follows:
Vesting conditions of performance rights granted
•
Vesting of the performance rights granted to executive directors and executives during the year is based on two equally
•
weighted performance hurdles as follows:
Relative TSR
•
•
The relative TSR scorecard for the three year measurement period will be determined based on a percentile ranking of the
Company's TSR results relative to the TSR of each of the companies in the peer group over the same three year
Relative TSR
measurement period.
28 September 2018
1 July 2021
4.66
2.81
28 September 2018
48
1 July 2021
1.07
4.66
2.08
2.81
48
1.07
2.08
Relative TSR; and
Absolute TSR.
Relative TSR; and
Absolute TSR.
The relative TSR scorecard for the three year measurement period will be determined based on a percentile ranking of the
The peer group is to comprise the constituents of the S&P ASX 300 Metals and Mining Index.
Company's TSR results relative to the TSR of each of the companies in the peer group over the same three year
The vesting schedule of the performance rights subject to relative TSR testing is as follows:
measurement period.
Relative TSR performance
Less than 50th percentile
The peer group is to comprise the constituents of the S&P ASX 300 Metals and Mining Index.
Level of vesting
Zero
The vesting schedule of the performance rights subject to relative TSR testing is as follows:
50% plus pro-rata straight line percentage between 50%
and 100%
Level of vesting
100%
Zero
50% plus pro-rata straight line percentage between 50%
and 100%
100%
The Company's TSR performance for share rights issued during the current financial year will be assessed against the
following members of the S&P ASX 300 Metals and Mining Index:
Between 50th and 75th percentile
Relative TSR performance
75th percentile or better
Less than 50th percentile
Between 50th and 75th percentile
75th percentile or better
The Company's TSR performance for share rights issued during the current financial year will be assessed against the
following members of the S&P ASX 300 Metals and Mining Index:
Independence Group NL
Independence Group NL
112 — IGO ANNUAL REPORT 2019
52
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
25 Share-based payments (continued)
Vesting conditions of performance rights granted (continued)
Peer companies
* Alacer Gold Corp
* Beadell Resources Ltd1
* Dacian Gold Ltd
* Doray Minerals Ltd
* Evolution Mining Ltd
* Fortescue Metals Group Ltd
* Galaxy Resources Ltd
* Gold Road Resources Ltd
* Iluka Resources Ltd
* Lynas Corp Ltd
* Magnis Resources Ltd
* Mineral Resources Ltd
* Newcrest Mining Ltd
* Northern Star Resources Ltd
* OceanaGold Corp
* Orocobre Ltd
* OZ Minerals Ltd
* Perseus Mining Ltd
* Pilbara Minerals Ltd
* Regis Resources Ltd
* Resolute Mining Ltd
* Sandfire Resources NL
* Saracen Mineral Holdings Ltd
* Silver Lake Resources Ltd
* South32 Ltd
* St Barbara Ltd
* Syrah Resources Ltd
* Western Areas Ltd
* Westgold Resources Ltd
1. To be removed from peer group of companies following delisting of the company.
Absolute TSR
The absolute TSR scorecard for the three year measurement period will be determined based on an increase in absolute
TSR of the Company over the three year measurement period.
The vesting schedule of the performance rights subject to absolute TSR testing is as follows:
Absolute TSR performance
10% per annum return
Above 10% per annum and below 20% per annum return
Above 20% per annum return
Level of vesting
33%
Straight line pro-rata between 33% and 100%
100%
Service rights - short-term incentive (STI) scheme
Under the Group's short-term incentive (STI) scheme, Executives and selected employees receive 50% of the annual STI
achieved in cash and 50% in the form of rights to deferred shares in Independence Group NL (referred to as service rights).
The service rights are granted following the determination of the STI for the performance year and vest in two equal
tranches. The first tranche of 50% vests on the 12 month anniversary of the STI award date, and the second tranche of 50%
vests on the 24 month anniversary of the STI award date.
The service rights automatically convert into one ordinary share each on vesting at an exercise price of nil. The Executives
and employees do not receive any dividends and are not entitled to vote in relation to the service rights during the vesting
period. If an Executive or employee ceases to be employed by the Group within the vesting period, the service rights will be
forfeited, except in circumstances that are approved by the Board on a case-by-case basis.
The number of rights to be granted is determined based on the 5 day VWAP of the Company's shares after release of the
Independence Group NL financial statements.
Set out below are summaries of movements in service rights during the year:
Independence Group NL
53
IGO ANNUAL REPORT 2019 — 113
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
Notes to the consolidated financial statements
(continued)
30 June 2019
(continued)
25 Share-based payments (continued)
25 Share-based payments (continued)
Vesting conditions of performance rights granted (continued)
Vesting conditions of performance rights granted (continued)
Service rights - short-term incentive (STI) scheme (continued)
Service rights - short-term incentive (STI) scheme (continued)
Outstanding at the beginning of the year
25 Share-based payments (continued)
Rights issued during the year
Outstanding at the beginning of the year
Rights vested during the year
Vesting conditions of performance rights granted (continued)
Rights issued during the year
Rights lapsed during the year
Rights vested during the year
Service rights - short-term incentive (STI) scheme (continued)
Outstanding at the end of the year
Rights lapsed during the year
2019
2019
2018
2018
Notes to the consolidated financial statements
Weighted
30 June 2019
average fair
(continued)
Weighted
value
average fair
-
value
3.51
-
3.51
3.51
3.51
3.51
3.51
3.51
Weighted
average fair
Weighted
value
average fair
3.51
value
4.21
3.51
3.51
4.21
3.87
3.51
4.01
3.87
Number of
share rights
Number of
-
share rights
423,357
-
(99,560)
423,357
(33,595)
(99,560)
290,202
(33,595)
Number of
share rights
Number of
290,202
share rights
320,780
290,202
(152,650)
320,780
(20,646)
(152,650)
437,686
(20,646)
2019
2018
3.51
4.21
3.51
3.87
4.01
Weighted
average fair
value
437,686
Number of
share rights
290,202
Number of
share rights
290,202
320,780
(152,650)
(20,646)
3.51
Outstanding at the end of the year
Weighted
The share-based payments expense relating to service rights included in profit or loss for the year totalled $1,116,176
average fair
(2018: $956,481).
The share-based payments expense relating to service rights included in profit or loss for the year totalled $1,116,176
value
Employee Share Ownership Award
(2018: $956,481).
-
Outstanding at the beginning of the year
In accordance with the terms of the EIP, the Employee Share Ownership Award (ESOA) provides for shares to be issued by
Employee Share Ownership Award
3.51
Rights issued during the year
the Company to employees for no cash consideration. All employees (excluding executive directors, senior management
3.51
Rights vested during the year
In accordance with the terms of the EIP, the Employee Share Ownership Award (ESOA) provides for shares to be issued by
and other employees entitled to participate in the LTI scheme and non-executive directors) who have been continuously
3.51
Rights lapsed during the year
the Company to employees for no cash consideration. All employees (excluding executive directors, senior management
employed by the Group for a period of at least three months prior to 1 July are eligible to participate in the ESOA.
and other employees entitled to participate in the LTI scheme and non-executive directors) who have been continuously
3.51
Outstanding at the end of the year
Under the ESOA, eligible employees may be granted up to $1,000 worth of fully paid ordinary shares in Independence
employed by the Group for a period of at least three months prior to 1 July are eligible to participate in the ESOA.
Group NL annually for no cash consideration. The number of shares issued to participants in the scheme is the offer amount
The share-based payments expense relating to service rights included in profit or loss for the year totalled $1,116,176
Under the ESOA, eligible employees may be granted up to $1,000 worth of fully paid ordinary shares in Independence
divided by the weighted average price at which the Company's shares are traded on the Australian Securities Exchange for
(2018: $956,481).
Group NL annually for no cash consideration. The number of shares issued to participants in the scheme is the offer amount
the 20 days up to and including the date of grant.
divided by the weighted average price at which the Company's shares are traded on the Australian Securities Exchange for
Employee Share Ownership Award
the 20 days up to and including the date of grant.
2018
In accordance with the terms of the EIP, the Employee Share Ownership Award (ESOA) provides for shares to be issued by
Number
the Company to employees for no cash consideration. All employees (excluding executive directors, senior management
Notes to the consolidated financial statements
2018
and other employees entitled to participate in the LTI scheme and non-executive directors) who have been continuously
Number of shares issued under the plan to participating employees
76,452
30 June 2019
Number
employed by the Group for a period of at least three months prior to 1 July are eligible to participate in the ESOA.
(continued)
Number of shares issued under the plan to participating employees
76,452
Each participant was issued with shares worth $1,000 based on the weighted average market price of $4.85 (2018: $3.61).
Under the ESOA, eligible employees may be granted up to $1,000 worth of fully paid ordinary shares in Independence
The share-based payments expense relating to EOSA included in profit or loss for the year totalled $122,889 (2018:
Group NL annually for no cash consideration. The number of shares issued to participants in the scheme is the offer amount
Each participant was issued with shares worth $1,000 based on the weighted average market price of $4.85 (2018: $3.61).
25 Share-based payments (continued)
$275,991).
divided by the weighted average price at which the Company's shares are traded on the Australian Securities Exchange for
The share-based payments expense relating to EOSA included in profit or loss for the year totalled $122,889 (2018:
the 20 days up to and including the date of grant.
Vesting conditions of performance rights granted (continued)
The performance rights will not be subject to any further escrow restrictions once they have vested to the employees.
$275,991).
-
423,357
(99,560)
(33,595)
2019
Number
2019
25,338
Number
437,686
290,202
25,338
4.01
2019
Number
Share trading policy
Employee Salary Sacrifice Share Plan
The performance rights will not be subject to any further escrow restrictions once they have vested to the employees.
2018
The trading of shares issued to participants under the Company’s EIP is subject to, and conditional upon, compliance with
Number
During the current year, and in accordance with the terms of the EIP, the Company introduced an Employee Salary Sacrifice
Share trading policy
the Company’s employee share trading policy.
Plan whereby employees, excluding KMP, can purchase up to $5,000 of shares in the Company via salary sacrifice. The
76,452
Number of shares issued under the plan to participating employees
The trading of shares issued to participants under the Company’s EIP is subject to, and conditional upon, compliance with
Company will match any two shares purchased with one share, up to a maximum of $2,500. The number of shares acquired
Non-executive Directors
the Company’s employee share trading policy.
on-market by the Company during the year for the purposes of this plan were 69,970 shares with an average price per share
Each participant was issued with shares worth $1,000 based on the weighted average market price of $4.85 (2018: $3.61).
The EIP permits non-executive directors to be eligible employees and therefore to participate in the plan. It is not currently
Non-executive Directors
of $4.50.
The share-based payments expense relating to EOSA included in profit or loss for the year totalled $122,889 (2018:
intended that non-executive directors will be issued with performance rights under the EIP and any such issue would be
The EIP permits non-executive directors to be eligible employees and therefore to participate in the plan. It is not currently
$275,991).
subject to all necessary shareholder approvals.
The share rights issued under the EIP will not be subject to any further escrow restrictions once they have vested to the
intended that non-executive directors will be issued with performance rights under the EIP and any such issue would be
employees.
The performance rights will not be subject to any further escrow restrictions once they have vested to the employees.
(b) Recognition and measurement
subject to all necessary shareholder approvals.
Share trading policy
Share trading policy
(b) Recognition and measurement
Equity-settled transactions
The trading of shares issued to participants under the Company’s EIP is subject to, and conditional upon, compliance with
The trading of shares issued to participants under the Company’s EIP is subject to, and conditional upon, compliance with
The fair values of equity settled awards are recognised in share-based payments expense, together with a corresponding
the Company’s employee share trading policy.
Equity-settled transactions
the Company’s employee share trading policy.
increase in share-based payments reserve within equity, over the period in which the performance conditions are fulfilled,
The fair values of equity settled awards are recognised in share-based payments expense, together with a corresponding
ending on the date on which the relevant employees become fully entitled to the award (vesting date).
Non-executive Directors
Non-executive Directors
increase in share-based payments reserve within equity, over the period in which the performance conditions are fulfilled,
The EIP permits non-executive directors to be eligible employees and therefore to participate in the plan. It is not currently
The EIP permits non-executive directors to be eligible employees and therefore to participate in the plan. It is not currently
ending on the date on which the relevant employees become fully entitled to the award (vesting date).
intended that non-executive directors will be issued with performance rights under the EIP and any such issue would be
intended that non-executive directors will be issued with performance rights under the EIP and any such issue would be
subject to all necessary shareholder approvals.
subject to all necessary shareholder approvals.
25,338
(b) Recognition and measurement
(b) Recognition and measurement
Independence Group NL
Equity-settled transactions
Equity-settled transactions
Independence Group NL
54
The fair values of equity settled awards are recognised in share-based payments expense, together with a corresponding
The fair values of equity settled awards are recognised in share-based payments expense, together with a corresponding
increase in share-based payments reserve within equity, over the period in which the performance conditions are fulfilled,
increase in share-based payments reserve within equity, over the period in which the performance conditions are fulfilled,
ending on the date on which the relevant employees become fully entitled to the award (vesting date).
ending on the date on which the relevant employees become fully entitled to the award (vesting date).
54
The cost of these equity-settled transactions is measured by reference to the fair value at the date at which they are granted.
The fair value is determined with the assistance of a valuation software using a trinomial tree which has been adopted by the
Boyle and Law (1994) node alignment algorithm to improve accuracy. In valuing equity-settled transactions, no account is
taken of any performance conditions, other than conditions linked to the price of the shares of Independence Group NL
(market conditions).
54
Independence Group NL
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects: (i) the
114 — IGO ANNUAL REPORT 2019
extent to which the vesting period has expired, and (ii) the number of awards that, in the opinion of the Directors of the
Company, will ultimately vest. This opinion is formed based on the best available information at the reporting date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a
market condition.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not
been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the
modification, as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not
yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and
designated as a replacement award on the date that it is granted, the cancelled and new award is treated as if it was a
modification of the original award, as described in the previous paragraph.
Upon the settlement of equity settled share awards, the balance of the share-based payments reserve relating to those
rights and awards is transferred to share capital. The dilutive effect, if any, of outstanding rights is reflected as additional
share dilution in the computation of diluted earnings per share.
Independence Group NL
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
25 Share-based payments (continued)
(b) Recognition and measurement (continued)
Equity-settled transactions (continued)
The cost of these equity-settled transactions is measured by reference to the fair value at the date at which they are granted.
The fair value is determined with the assistance of a valuation software using a trinomial tree which has been adopted by the
Boyle and Law (1994) node alignment algorithm to improve accuracy. In valuing equity-settled transactions, no account is
taken of any performance conditions, other than conditions linked to the price of the shares of Independence Group NL
(market conditions).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects: (i) the
extent to which the vesting period has expired, and (ii) the number of awards that, in the opinion of the Directors of the
Company, will ultimately vest. This opinion is formed based on the best available information at the reporting date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a
market condition.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not
been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the
modification, as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not
yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and
designated as a replacement award on the date that it is granted, the cancelled and new award is treated as if it was a
modification of the original award, as described in the previous paragraph.
Upon the settlement of equity settled share awards, the balance of the share-based payments reserve relating to those
rights and awards is transferred to share capital. The dilutive effect, if any, of outstanding rights is reflected as additional
share dilution in the computation of diluted earnings per share.
26 Related party transactions
(a) Transactions with other related parties
During the financial year, a wholly-owned subsidiary paid dividends of $78,000,000 to Independence Group NL (2018: $nil).
Any such amounts are eliminated on consolidation for the purposes of calculating the profit of the Group for the financial
year.
Loans were made between Independence Group NL and certain entities in the wholly-owned group. The loans receivable
from controlled entities are interest-free and repayable on demand.
(b) Key management personnel
Compensation of key management personnel
Short-term employee benefits
Post-employment benefits
Long-term benefits
Share-based payments
2019
$
5,313,201
301,780
86,066
1,901,926
7,602,973
2018
$
4,335,929
245,536
62,033
1,357,043
6,000,541
Detailed remuneration disclosures are provided in the remuneration report on pages 45 to 62 .
Independence Group NL
55
IGO ANNUAL REPORT 2019 — 115
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
27 Parent entity financial information
(a) Summary financial information
The following information relates to the parent entity, Independence Group NL, at 30 June.
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Hedging reserve
Share-based payments reserve
Accumulated losses
Total equity
Profit for the year
Other comprehensive income for the period
Total comprehensive income for the year
(b) Guarantees entered into by the parent entity
2019
$'000
2018
$'000
432,362
1,550,426
1,982,788
80,620
98,663
179,283
183,409
1,773,911
1,957,320
80,027
153,744
233,771
1,803,505
1,723,549
(1,803,505)
(1,723,549)
1,895,855
1,879,094
136
15,427
(107,913)
464
13,340
(169,349)
1,803,505
1,723,549
2019
$'000
85,055
(329)
84,726
2018
$'000
50,612
531
51,143
The parent entity has no unsecured guarantees in respect of finance leases of subsidiaries (2018: $nil).
There are cross guarantees given by Independence Group NL, Independence Nova Holdings Pty Ltd and Independence
Nova Pty Ltd as described in note 28. No deficiencies of assets exist in any of these companies.
(c) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2019 or 30 June 2018.
(d) Contractual commitments for the acquisition of property, plant or equipment
The parent entity did not have any outstanding contractual commitments for the acquisition of property, plant and equipment
at 30 June 2019 or 30 June 2018.
Independence Group NL
56
116 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
28 Deed of cross guarantee
Independence Group NL, Independence Nova Holdings Pty Ltd and Independence Nova Pty Ltd are parties to a deed of
cross guarantee under which each company guarantees the debts of
the
wholly-owned entities have been relieved from the requirement to prepare a financial report and directors' report under ASIC
Corporations (Wholly-owned Companies) Instrument 2016/785 (as amended) issued by the Australian Securities and
Investments Commission. Independence Long Pty Ltd and Independence Jaguar Pty Ltd were also parties to the deed of
cross guarantee until their divestment on 31 May 2019 and 31 May 2018 respectively.
the others. By entering into the deed,
(a) Consolidated statement of profit or loss and other comprehensive income and summary of movements in
consolidated retained earnings
The above companies represent a 'closed group' for the purposes of the Legislative Instrument, and as there are no other
parties to the deed of cross guarantee that are controlled by Independence Group NL, they also represent the 'extended
closed group'.
Set out below is a consolidated statement of profit or loss and other comprehensive income and a summary of movements
in consolidated retained earnings for the year ended 30 June 2019 of the closed group consisting of Independence Group
NL, Independence Nova Holdings Pty Ltd and Independence Nova Pty Ltd. The results of Independence Long Pty Ltd and
Independence Jaguar Pty Ltd are included until the date of their divestment on 31 May 2019 and 31 May 2018 respectively.
Consolidated statement of profit or loss and other comprehensive income
Revenue from continuing operations
Other income
2019
$'000
784,509
8,377
2018
$'000
777,935
2,600
Mining, development and processing costs
Employee benefits expense
Share-based payments expense
Fair value movement of financial investments
Depreciation and amortisation expense
Exploration and growth expense
Royalty expense
Ore tolling expense
Shipping and wharfage expense
Borrowing and finance costs
Impairment and forgiveness of loans to subsidiaries
Other expenses
28 Deed of cross guarantee (continued)
Profit before income tax
Income tax expense
(a) Consolidated statement of profit or loss and other comprehensive income (continued)
Profit after income tax for the period
(241,302)
(88,795)
(3,267)
(587)
(234,845)
(22,695)
(30,489)
(8,776)
Notes to the consolidated financial statements
(19,787)
30 June 2019
(10,302)
(continued)
(21,718)
(9,465)
(262,851)
(53,234)
(3,123)
(5,796)
(204,531)
(29,412)
(30,506)
(57)
(18,340)
(6,237)
(21,168)
(11,207)
Other comprehensive income
Items that may be reclassified to profit or loss
Effective portion of changes in fair value of cash flow hedges, net of tax
Other comprehensive (loss)/income for the period, net of tax
Total comprehensive income for the period
Summary of movements in consolidated accumulated losses
Accumulated losses at the beginning of the financial year
Profit for the year
Dividends paid
Transfer from acquisition reserve
Accumulated losses at the end of the financial year
Independence Group NL
(b) Consolidated balance sheet
146,424
(52,794)
93,630
88,507
(36,711)
51,796
(1,054)
(1,054)
92,576
2019
$'000
(77,338)
93,630
(23,619)
-
(7,327)
1,784
1,784
53,580
2018
$'000
(120,540)
51,796
(11,736)
3,142
(77,338)
57
Set out below is a consolidated balance sheet as at 30 June 2019 of the closed group consisting of Independence Group
NL, Independence Nova Holdings Pty Ltd and Independence Nova Pty Ltd. Independence Long Pty Ltd is also included in
the consolidated balance sheet at 30 June 2018.
IGO ANNUAL REPORT 2019 — 117
Independence Group NL
58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
28 Deed of cross guarantee (continued)
(a) Consolidated statement of profit or loss and other comprehensive income (continued)
Other comprehensive income
Items that may be reclassified to profit or loss
Effective portion of changes in fair value of cash flow hedges, net of tax
Other comprehensive (loss)/income for the period, net of tax
Total comprehensive income for the period
Summary of movements in consolidated accumulated losses
Accumulated losses at the beginning of the financial year
Profit for the year
Dividends paid
Transfer from acquisition reserve
Accumulated losses at the end of the financial year
28 Deed of cross guarantee (continued)
(b) Consolidated balance sheet
(1,054)
(1,054)
92,576
2019
$'000
(77,338)
93,630
(23,619)
-
1,784
1,784
53,580
2018
$'000
(120,540)
51,796
(11,736)
3,142
(77,338)
Notes to the consolidated financial statements
30 June 2019
(continued)
(7,327)
Set out below is a consolidated balance sheet as at 30 June 2019 of the closed group consisting of Independence Group
28 Deed of cross guarantee (continued)
NL, Independence Nova Holdings Pty Ltd and Independence Nova Pty Ltd. Independence Long Pty Ltd is also included in
the consolidated balance sheet at 30 June 2018.
(b) Consolidated balance sheet (continued)
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Financial assets at fair value through profit or loss
Derivative financial instruments
Total current assets
Non-current assets
Receivables
Property, plant and equipment
Mine properties
Exploration and evaluation expenditure
Deferred tax assets
Investments in controlled entities
Investments in joint ventures
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Provisions
Total current liabilities
Independence Group NL
Non-current liabilities
Borrowings
Provisions
Deferred tax liabilities
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
2019
$'000
2018
$'000
346,451
45,486
25,889
26,732
484
445,042
14,998
23,088
1,116,014
36,338
172,694
35,195
384,364
1,782,691
136,276
81,238
45,247
22,376
1,990
287,127
29,485
14,140
1,250,298
34,600
203,995
35,195
343,416
1,911,129
2,227,733
2,198,256
96,891
56,226
5,180
158,297
28,363
39,018
97,761
165,142
107,284
56,226
4,894
168,404
58
84,589
41,958
86,816
213,363
323,439
381,767
1,904,294
1,816,489
1,895,855
15,766
(7,327)
1,904,294
1,879,094
14,733
(77,338)
1,816,489
Independence Group NL
59
118 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
29 Remuneration of auditors
The auditor of Independence Group NL is BDO Audit (WA) Pty Ltd.
Amounts received or due and receivable by BDO Audit (WA) Pty Ltd for:
Audit and review of financial statements
Other services in relation to the entity and any other entity in the consolidated Group
2019
$
2018
$
168,500
20,000
188,500
189,500
20,500
210,000
30 Summary of significant accounting policies
(a) New and amended standards and interpretations adopted by the Group
A number of new or amended standards became applicable for the current reporting period resulting in a change to the
Group's accounting policies. Retrospective adjustments were made as a result of adopting the following standard:
•
AASB 15 Revenue from Contracts with Customers
The impact of the adoption of this standard and the new accounting policies are disclosed below. AASB9 Financial
Instruments was previously early adopted in the year ended 30 June 2016.
The Group has not elected to early adopt any new standards or amendments during the current financial year.
(i) AASB 15 Revenue from Contracts with Customers
The Group has applied AASB 15 Revenue from Contracts with Customers (as amended) for the first time in the current
reporting period. AASB 15 establishes a single comprehensive model for entities to use in accounting for revenue arising
from contracts with customers and replaces the previous standard AASB 118 Revenue.
The core principle of AASB 15 is that an entity should recognise revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for
those goods or services. Specifically, the Standard introduces a 5-step approach to revenue recognition:
•
•
•
•
•
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
Under AASB 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the
goods or services underlying the particular performance obligation is transferred to the customer.
The Group has considered AASB 15 in detail and determined the following relevant impacts for the Group:
Independence Group NL
60
IGO ANNUAL REPORT 2019 — 119
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
30 Summary of significant accounting policies (continued)
(a) New and amended standards and interpretations adopted by the Group (continued)
•
•
The Group sells a significant proportion of its products on Cost, Insurance and Freight (CIF) terms, which means that
the Group is responsible for shipping the product to a destination port specified by the buyer. There is not a significant
impact on the Group’s other commodity sales contracts under AASB 15.
Under the Group's prior period accounting policy, the Group recognised the total contract revenue when there was
persuasive evidence indicating that there has been a transfer of risks and rewards to the customer, typically on the bill of
lading date when the concentrate is delivered to the ship and the related shipping costs were recognised in full at that
point. Under AASB 15, the sale of the concentrate is recognised when control has passed to the customer, which is
upon loading onto the ship or delivered to the customer’s premises. The revenue recognised in relation to the sale of the
concentrate is priced at the amount for which it is expected to be highly probable of not reversing. The shipping and
insurance service represents a separate performance obligation, being recognised separately from the sale of the
concentrate over the period the shipping and insurance service is provided.
The Group’s nickel and copper concentrate sales contracts provide for provisional pricing of sales at the time the
product is delivered to the vessel, with final pricing determined using the relevant metal price index on or after the
vessel’s arrival to the port of discharge. The provisional pricing related to the quality and quantity of the commodity sold
is included in sales revenue. The provisional pricing related to the pricing of the commodity sold is an embedded
derivative which is accounted for in accordance with AASB 9 Financial Instruments. Following the adoption of AASB 15,
provisional pricing adjustments to revenue relating to the embedded derivative are separately identified as movements
in the financial instrument and disclosed separately as Provisional pricing adjustments in Other revenue, rather than
being included within Sales revenue.
New Revenue Accounting Policy
Revenue from Sale of Goods
Revenue is recognised when control of the goods has passed to the buyer based upon agreed delivery terms. For sales of
concentrate, this is when the product is loaded onto the ship or delivered to the customer’s premises. In cases where control
of product is transferred to the customer before shipping takes place, revenue is recognised when the customer has formally
acknowledged their legal ownership of the product, which includes all inherent risks associated with control of the product. In
these cases, the product is clearly identified and immediately available to the customer.
The price to be received on sales of concentrate is provisionally priced and recognised at the estimate of the consideration
receivable that is highly probable of not reversing by reference to the relevant contractual price and the estimated mineral
specifications. Subsequently, provisionally priced sales are repriced at each reporting period up until when final pricing and
settlement is confirmed, with revenue adjustments relating to the quality and quantity of commodities sold being recognised
in sales revenue.
Provisionally priced sales for which price finalisation is referenced to the relevant metal price index have an embedded
commodity derivative. The embedded derivative is carried at fair value through profit or loss as part of trade receivables. The
period between provisional pricing and final invoices is approximately 30 to 90 days.
Revenue from Services - Shipping and Insurance
Sales of nickel and copper concentrates are on terms that include the Group being responsible for shipping and insurance
costs. Shipping and insurance is a separate performance obligation from the sale of the commodity with the revenue
allocated to shipping and insurance being recognised over the period of transfer to the customer.
Application of new and revised Australian Accounting Standards
The Group adopted AASB 15 using the retrospective method. The nature and effect of these disclosures changes are
shown below.
Independence Group NL
61
120 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 30 Summary of significant accounting policies (continued)
(a) New and amended standards and interpretations adopted by the Group (continued)
Notes to the consolidated financial statements
30 June 2019
(continued)
Impact of disclosures the year ended 30 June 2019
Revenue - sale of products
Revenue - shipping and insurance services
Other revenue - provisional pricing adjustments
Impact on disclosures for the year ended 30 June 2018
Revenue - sale of products
Revenue - shipping and insurance services
Other revenue - provisional pricing adjustments
Application of
AASB 118
$'000
AASB 15
adjustments
$'000
30 June 2019
$'000
778,620
-
-
778,620
13,917
5,336
(19,253)
-
792,537
5,336
(19,253)
778,620
As previously
reported
under AASB
118
$'000
AASB 15
adjustments
$'000
30 June 2018
$'000
765,687
-
-
765,687
(28,342)
4,668
23,674
-
737,345
4,668
23,674
765,687
Under AASB 118 Revenue, the Group recognised the total contract revenue when there was persuasive evidence indicating
that there had been a transfer of risks and rewards to the customer, typically on the bill of lading date when concentrate was
delivered to the ship, including the related shipping and insurance costs. On adoption of AASB 15, the shipping and
insurance service represents a separate performance obligation, and are recognised separately from the sale of the
concentrate over the period the shipping and insurance service is provided.
As explained in the new revenue accounting policy above, the Group’s sales contracts may provide for provisional pricing of
sales at the time the product is delivered to the vessel with final pricing determined using the quotational period of the month
of the vessel’s arrival to the port of discharge. This provisional pricing relates to the quality and quantity of the commodity
sold, which is included in sales revenue, and an embedded derivative relating to the pricing of the commodity sold. On
adoption of AASB 15, provisional pricing adjustments relating to the embedded derivative are separately identified as
movements in the financial
instrument rather than being included within Sales revenue. The final pricing adjustment
mechanism, being an embedded derivative, is separated from the host contract and recognised at fair value through profit or
loss. These amounts are disclosed separately as Provisional pricing adjustments in Other revenue, rather than being
included within Sales revenue for the Group.
Under AASB 9, the receivable asset is measure at fair value through profit or loss which will result in a similar overall impact
on the income statement and balance sheet. AASB 9 introduces an expected credit loss model for impairment of financial
assets which replaces the incurred loss model. This does not have a significant impact on the Group given the Group's
credit risk management processes, and the resulting insignificant level of credit losses.
(b) New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2019
reporting periods and have not been early adopted by the Group. The Group’s assessment of the impact of these new
standards and interpretations is set out below.
Independence Group NL
62
IGO ANNUAL REPORT 2019 — 121
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 Notes to the consolidated financial statements
30 June 2019
(continued)
30 Summary of significant accounting policies (continued)
(b) New standards and interpretations not yet adopted (continued)
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. As a result, the Group will be
adopting this standard from 1 July 2019. The standard replaces AASB 117 Leases and for lessees will eliminate the
classifications of operating leases and finance leases. Subject to exceptions, a 'right-of-use' asset will be capitalised in the
balance sheet, measured at the present value of unavoidable future lease payments to be made over the lease term. The
exceptions relate to short-term leases of 12 months or less and leases of low-value assets where an accounting policy
choice exists whereby either a 'right-of-use' asset is recognised or lease payments are expensed to profit or loss as
incurred. A liability corresponding to the capitalised lease will also be recognised, adjusted for lease prepayments, lease
incentives received,
future restoration, removal or dismantling costs.
Straight-line operating lease expense recognition will be replaced with a depreciation charge for the leased asset (included
in operating costs) and an interest expense on the recognised lease liability (included in finance costs). In the earlier periods
of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under
AASB 117. However EBITDA (Earnings before interest, tax, depreciation and amortisation) results will be improved as the
operating expense is replaced by interest expense and depreciation in profit or loss under AASB 16. For classification within
the statement of cash flows, the lease payments will be separated into both a principal (financing activities) and interest
(operating activities) component. The Group has undertaken work to date in preparedness for the new standard, including
identification and analysis of contracts relating to mining services, power generation, logistics and property leases that are
likely to contain a lease (as newly defined).
initial direct costs incurred and an estimate of
There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in
the current or future reporting periods and on foreseeable future transactions.
(c) Other significant accounting policies
(i) Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair
liabilities incurred and the equity interests issued by the Group. The consideration
value of
transferred also includes the fair value of any asset or liability resulting from a contingent consideration arrangement and the
fair value of any pre-existing equity interest in the subsidiary.
the assets transferred,
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited
exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in
the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate
share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
(ii)
Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are
tested for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value-in-use. For the purposes
of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows
which are largely independent of
the cash inflows from other assets or groups of assets (cash-generating units).
Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at
the end of each reporting period.
Independence Group NL
63
122 — IGO ANNUAL REPORT 2019
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2019 DIRECTORS’ DECLARATION
30 JUNE 2019
Directors' declaration
30 June 2019
In the Directors' opinion:
(a)
the financial statements and notes set out on pages 66 to 122 are in accordance with the Corporations Act 2001,
including:
(i)
(ii)
complying with Accounting Standards,
professional reporting requirements, and
the Corporations Regulations 2001 and other mandatory
giving a true and fair view of the consolidated entity's financial position as at 30 June 2019 and of its
performance for the year ended on that date, and
(b)
(c)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable, and
at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed
Group will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the
deed of cross guarantee.
The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by
section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of Directors.
Peter Bradford
Managing Director
Perth, Western Australia
Dated this 28th day of August 2019
IGO ANNUAL REPORT 2019 — 123
INDEPENDENT AUDITOR’S REPORT
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
INDEPENDENT AUDITOR'S REPORT
To the members of Independence Group NL
To the members of Independence Group NL
Report on the Audit of the Financial Report
Opinion
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Independence Group NL (the Company) and its subsidiaries (the
Group), which comprises the consolidated balance sheet as at 30 June 2019, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in
We have audited the financial report of Independence Group NL (the Company) and its subsidiaries (the
equity and the consolidated statement of cash flows for the year then ended, and notes to the
Group), which comprises the consolidated balance sheet as at 30 June 2019, the consolidated
financial report, including a summary of significant accounting policies and the directors’ declaration.
statement of profit or loss and other comprehensive income, the consolidated statement of changes in
equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial report, including a summary of significant accounting policies and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
Giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its
financial performance for the year ended on that date; and
(i)
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its
financial performance for the year ended on that date; and
Basis for opinion
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
Report section of our report. We are independent of the Group in accordance with the Corporations
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
with the Code.
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
We confirm that the independence declaration required by the Corporations Act 2001, which has been
with the Code.
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
Key audit matters
for our opinion.
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
124 — IGO ANNUAL REPORT 2019
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
124 — IGO ANNUAL REPORT 2019
124 — IGO ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT
Carrying Value of Mine Properties
Key audit matter
How the matter was addressed in our audit
Refer to Note 14 of the financial statements, for
Our work included, but was not limited, to the
disclosure of the mine properties asset.
following procedures:
The carrying value of mine properties is impacted by
various key estimates and judgements in particular:
•
•
•
•
Ore Reserves and estimates;
Amortisation rates;
Capitalisation and attribution of mining
costs; and
Life of mine average stripping ratio.
The Group is also required to assess for indicators of
impairment at each reporting period. The assessment
of impairment indicators in relation to the mine
assets requires management to make significant
accounting judgements and estimates which includes
discount rates, commodity price and ore reserve
estimates.
•
•
•
•
•
Reviewing management’s amortisation models,
including agreeing key inputs to supporting
information;
Assessing the competency and objectivity of,
and work performed by, management’s experts
in respect of the ore reserve estimates;
Challenging management’s judgements over
capitalisation of development costs of
underground mining operations;
Assessing whether the recognition of the
deferred stripping assets was consistent with
the requirements of IFRIC 20;
Evaluating and challenging management’s
assessment of indicators of impairment under
the Australian Accounting Standards for the
This is a key audit matter due to the quantum of the
mining assets by:
asset and the significant judgement involved in
management’s assessment of the carrying value of
mine properties.
-
Comparing the carrying amount of the
Group’s net assets against the
market capitalisation, both as at 30 June
2019, and subsequent movements;
-
-
Considering commodity price assumptions
at 30 June 2019, including forecasts;
Reviewing board and sub-committee
meeting minutes, and holding discussions
with key management, including non-
finance personnel;
-
Assessing economic indicators for impacts
on appropriate discount rates; and
• We also assessed the adequacy of related
disclosures in Note 14 to the financial
statements.
IGO ANNUAL REPORT 2019 — 125
125 — IGO ANNUAL REPORT 2019
Carrying Value of Mining Inventories
Other information
Key audit matter
How the matter was addressed in our audit
We consider accounting for inventory to be a key audit
Our work included but was not limited to the
matter because of the:
following procedures:
•
•
•
•
•
Quantitative significance of the inventory
balance;
Complexity involved in determining inventory
quantities on hand due to the assumptions
used such as grades, volumes and densities;
Significant judgement in applying an
appropriate costing methodology in
accordance with the Group’s accounting
policy and estimates for calculating stockpiles
and concentrate on hand;
Judgemental aspect of the carrying amount of
the non-current stockpile at Tropicana; and
Significant judgements made in determining
net realisable value, including estimating the
future sales price of commodities, less any
estimated costs to complete production.
Refer to Note 9 for the detailed disclosures which
include the related accounting policies, including a
description of the major estimates management are
required to make.
•
•
•
•
•
•
•
Testing the controls over the appropriate
allocation of costs to ensure that they are
absorbed into inventory accurately;
Reconciling ore stockpile and concentrate
inventory balances held at 30 June 2019 to
supporting documentation;
Verifying the physical inputs included in the
cost models as at 30 June 2019 to stockpile
survey and technical reports;
Assessing the competence and objectivity of
the experts used by management in the
preparation of stockpile surveys;
Assessing the methodology applied by
management to record all appropriate costs
into the calculation of inventories on hand;
Evaluating management’s Net Realisable
Value assessment and agree that the
inventory cost carried is lower than Net
Realisable Value; and
Testing the net realisable value by assessing
management’s calculation including:
- Future commodity pricing;
- Expected cost to complete;
- In the case of the non-current inventory, a
review of management’s plans to blend the
low grade stockpile with future high grade
production over several years; and
• We also assessed the adequacy of related
disclosures in Note 9 to the financial
statements.
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2019, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 45 to 62 of the directors’ report for the
year ended 30 June 2019.
In our opinion, the Remuneration Report of Independence Group NL, for the year ended 30 June 2019,
complies with section 300A of the Corporations Act 2001.
126 — IGO ANNUAL REPORT 2019
126 — IGO ANNUAL REPORT 2019
127 — IGO ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2019, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 45 to 62 of the directors’ report for the
year ended 30 June 2019.
In our opinion, the Remuneration Report of Independence Group NL, for the year ended 30 June 2019,
complies with section 300A of the Corporations Act 2001.
IGO ANNUAL REPORT 2019 — 127
127 — IGO ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Glyn O’Brien
Director
Perth, 28 August 2019
128 — IGO ANNUAL REPORT 2019
128 — IGO ANNUAL REPORT 2019
INDEPENDENT AUDITOR’S REPORT ADDITIONAL ASX INFORMATION
The following additional information not shown elsewhere in this report is required by ASX Limited in respect of listed
companies only. This information is current as at 19 August 2019.
1. SHAREHOLDING
a. Distribution of shareholders
RANGE
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – Over
Total
TOTAL HOLDERS
UNITS
% OF ISSUED CAPITAL
3,511
2,640
880
852
103
7,986
1,259,663
6,831,528
6,551,573
21,288,383
554,585,912
590,517,059
0.21
1.16
1.11
3.61
93.92
100
b. The number of shareholders holding less that a marketable parcel of fully paid ordinary shares is 1,077.
c. The Company has received the following notices of substantial shareholding (Notice):
SUBSTANTIAL SHAREHOLDER
Mark Creasy
T. Rowe Price Group, Inc.
FIL Limited
Ausbil Investment Management Limited
RELEVANT INTEREST PER THE NOTICE – NUMBER OF SHARES
90,941,075
48,341,790
45,566,028
30,311,742
d. Voting rights: The voting rights of the fully paid ordinary shares are one vote per share held.
2. TWENTY LARGEST HOLDERS OF ORDINARY SHARES
ORDINARY SHAREHOLDERS
1
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
2 HSBC CUSTODY NOMINEES
3 CITICORP NOMINEES PTY LIMITED
4 NATIONAL NOMINEES LIMITED
5 YANDAL INVESTMENTS PTY LTD
6
FRASERX PTY LTD
7 PONTON MINERALS PTY LTD
8
LAKE RIVERS GOLD PTY LTD
9 BNP PARIBAS NOMINEES PTY LTD
10 FREE CI PTY LTD
11 BNP PARIBAS NOMS PTY LTD
12 HSBC CUSTODY NOMINEES
13 PERTH SELECT SEAFOODS PTY LTD
14 WARBONT NOMINEES PTY LTD
15 PERTH SELECT SEAFOODS PTY LTD
16 HSBC CUSTODY NOMINEES
17 CITICORP NOMINEES PTY LIMITED
18 XNI PTY LTD
19 MR KENNETH JOSEPH HALL
20 HSBC CUSTODY NOMINEES
Top 20 holders of Independence Ordinary Share Class (Total)
Total Remaining Holders Balance
3. UNQUOTED SECURITIES
NO. OF SHARES HELD
PERCENTAGE HELD
140,059,562
136,873,746
80,433,951
46,832,850
42,421,310
13,415,188
12,046,611
10,964,531
10,668,699
6,000,000
5,533,335
5,407,721
2,837,200
2,470,051
2,166,800
2,142,293
2,087,115
2,013,329
1,847,830
1,814,642
528,036,764
62,480,295
23.72
23.18
13.62
7.93
7.18
2.27
2.04
1.86
1.81
1.02
0.94
0.92
0.48
0.42
0.37
0.36
0.35
0.34
0.31
0.31
89.42
10.58
IGO has 1,904,658 performance rights and 431,288 service rights on issue. The number of beneficial holders of performance
rights and service rights are 73 and 43 respectively.
IGO ANNUAL REPORT 2019 — 129
SHAREHOLDER REPORTING TIMETABLE
IMPORTANT DATES
Please note that the dates below are subject to change.
Please check the IGO website nearer the time to confirm dates.
2019
22 October 2019
September 2019 Quarterly Activities Report
22 October 2019
September 2019 Quarter Investor Webcast
20 November 2019
Annual General Meeting, Four Points by Sheraton, Perth, Western Australia
2020
30 January 2020
FY20 Half Yearly Financial Statements (incorporating December 2019
Quarterly Activities Report)
30 January 2020
FY20 Half Year Investor Webcast
30 April 2020
30 April 2020
29 July 2020
29 July 2020
March 2020 Quarterly Activities Report
March 2020 Quarter Investor Webcast
June 2020 Quarterly Activities Report
June 2020 Quarter Investor Webcast
130 — IGO ANNUAL REPORT 2019
GLOSSARY OF TERMS
GLOSSARY OF TERMS
AC
AGAA
Ag
Au
BCM
Co
Cu
EBITDA
EM
air core usually in the context of drilling or drill holes
AngloGold Ashanti Australia
silver
gold
bulk cubic metres
cobalt
copper
Earnings Before Interest, Tax, Depreciation and Amortisation
electromagnetic
EM conductors
electromagnetic conductors returned from EM surveys
FLEM
HPGR
HPM
IGO
LTIFR
MLEM
Mt
Mtpa
NPAT
Ni
oz
Fixed-Loop electromagnetic
High Pressure Grinding Rolls
high precious metal
Independence Group NL
lost time injury frequency rate per million hours worked
moving-loop electromagnetic surveys
million metric tonnes
million metric tonnes per annum
Net Profit After Tax
nickel
ounce
RC drilling
reverse circulation drilling
t
metric tonnes
Tropicana Operation
Tropicana Gold Mine that is 30% owned by the Company and 70% owned by AngloGold Ashanti Australia under the TJV agreement
TJV
Zn
$
$M
Tropicana Joint Venture that is 30% owned by the Company and 70% owned by AngloGold Ashanti Australia
zinc
Australian dollars. All currency amounts in this report are Australian Dollars unless otherwise stated
million Australian dollars
FORWARD-LOOKING STATEMENTS
This document may include Forward-looking statements. Forward-looking statements include, but are not limited to,
statements concerning IGO’s planned production and planned exploration program and other statements that are not historical
facts. When used in this document, the words such as “could”, “plan”, “estimate”, “expect”, “intend”, “may”, “potential”, “should”
and similar expressions are Forward-looking statements. Although IGO believes that its expectations reflected in these
Forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given
that actual results will be consistent with these Forward-looking statements.
CASH COSTS
All cash costs quoted include royalties and net of by-product credits unless otherwise stated
Underlying EBITDA is a non-IFRS measure and comprises net profit or loss after tax, adjusted to exclude tax expense, finance
costs, interest income, asset impairments, gain on sale of subsidiary, redundancy and restructuring costs, depreciation and
amortisation, and once-off transaction costs.
CURRENCY
All currency amounts in this report are Australian Dollars unless otherwise stated.
ALL-IN SUSTAINING COSTS (AISC) PER OUNCE OF GOLD SOLD
IGO reports All-in Sustaining Costs (AISC) per ounce of gold sold in AUD for its 30% interest in the Tropicana Gold Mine using
the World Gold Council guidelines for AISC. The World Gold Council guidelines publication was released via press release on
27th June 2013 and is available from the World Gold Council’s website.
IGO ANNUAL REPORT 2019 — 131
COMPANY DIRECTORY
DIRECTORS
PETER BILBE
Non-executive Chairman
PETER BRADFORD
Managing Director & CEO
DEBRA BAKKER
Non-executive Director
PETER BUCK
Non-executive Director
GEOFFREY CLIFFORD
Non-executive Director
KEITH SPENCE
Non-executive Director
NEIL WARBURTON
Non-executive Director
EXECUTIVE LEADERSHIP TEAM
PETER BRADFORD
Managing Director & CEO
KEITH ASHBY
Head of SHEQ & Risk
KATE BARKER
Legal Counsel
MATT DUSCI
Chief Operating Officer
ANDREW EDDOWES
Head of Corporate Development
PERTH OFFICE
Suite 4, Level 5
South Shore Centre
85 South Perth Esplanade
South Perth WA 6151
POSTAL
PO Box 496
South Perth WA 6951
Telephone +61 8 9238 8300
Facsimile +61 8 9238 8399
Email
Website
contact@igo.com.au
www.igo.com.au
EXTERNAL AUDITOR
BDO AUDIT (WA) PTY LTD
38 Station Street
Subiaco WA 6008
Telephone +61 8 6382 4600
SHARE REGISTRY
COMPUTERSHARE INVESTOR SERVICES PTY LIMITED
Level 11,
172 St Georges Terrace
Perth WA 6000
Telephone 1300 850 505 (within Australia),
+61 3 9415 4000 (outside Australia)
Facsimile +61 3 9473 2500
Email
Web
www.investorcentre.com/contact
www.computershare.com
JOANNE MCDONALD
Company Secretary and Head of Corporate Affairs
SHARES
SAM RETALLACK
Head of People & Culture
IAN SANDL
General Manager Exploration
SCOTT STEINKRUG
Chief Financial Officer and Joint Company Secretary
LISTED ON AUSTRALIAN SECURITIES EXCHANGE (ASX)
ASX code: IGO
Shares on issue: 590,517,059 ordinary shares
WEBSITE
Through the use of the internet, we have ensured that our
corporate reporting is timely, complete and available at
minimum cost to the Company. All ASX releases, investor
presentations, financial statements and other information are
available on our website.
www.igo.com.au
132 — IGO ANNUAL REPORT 2019
CAUTIONARY NOTES AND DISCLAIMER
This annual report has been prepared by Independence Group NL (“IGO”) (ABN 46 092 786 304). It should not be considered as an offer or invitation to
subscribe for or purchase any securities in IGO or as an inducement to make an offer or invitation with respect to those securities in any jurisdiction. This
annual report contains general summary information about IGO. The information, opinions or conclusions expressed in the course of this presentation should
be read in conjunction with IGO’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange (ASX), which
are available on the IGO website. No representation or warranty, express or implied, is made in relation to the fairness, accuracy or completeness of the
information, opinions and conclusions expressed in this presentation.
This annual report includes forward looking information regarding future events, conditions, circumstances and the future financial performance of IGO.
Often, but not always, forward looking statements can be identified by the use of forward looking words such as “may”, “will”, “expect”, “intend”, “plan”,
“estimate”, “anticipate”, “continue” and “guidance”, or other similar words and may include statements regarding plans, strategies and objectives of
management, anticipated production or construction commencement dates and expected costs or production outputs. Such forecasts, projections and
information are not a guarantee of future performance and involve unknown risks and uncertainties, many of which are beyond IGO’s control, which may
cause actual results and developments to differ materially from those expressed or implied. Further details of these risks are set out below. All references
to future production and production guidance made in relation to IGO are subject to the completion of all necessary feasibility studies, permit applications
and approvals, construction, financing arrangements and access to the necessary infrastructure. Where such a reference is made, it should be read subject
to this paragraph and in conjunction with further information about the Mineral Resources and Ore Reserves, as well as any Competent Persons’ Statements
included in periodic and continuous disclosure announcements lodged with the ASX. Forward looking statements only apply at the date of issue. Subject
to any continuing obligations under applicable law or any relevant stock exchange listing rules, in providing this information IGO does not undertake any
obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any
such statement is based.
There are a number of risks specific to IGO and of a general nature which may affect the future operating and financial performance of IGO and the value
of an investment in IGO including and not limited to economic conditions, stock market fluctuations, commodity demand and price movements, access to
infrastructure, timing of environmental approvals, regulatory risks, operational risks, reliance on key personnel, reserve and resource estimations, native title
and title risks, foreign currency fluctuations and mining development, construction and commissioning risk. The production guidance in this presentation is
subject to risks specific to IGO and of a general nature which may affect the future operating and financial performance of IGO.
The information in this annual report that relates to Exploration Results is extracted from the ASX announcements released on 26 July 2018 entitled ‘2018
Mineral Resources and Ore Reserves Update’, 20 February 2019 entitled ‘CY18 Mineral Resources and Ore Reserve statement’, 30 May 2019 entitled ‘PRX:
Lake Mackay JV High grade Cobalt intersect at Grimlock’, and 1 July 2019 entitled ‘RTR: Significant High Grade Gold Mineralisation in Fraser Range’, and for
which Competent Person’s consents were obtained. The Competent Person’s consents remain in place for subsequent releases by the Company of the same
information in the same form and context, until the consent is withdrawn or replaced by a subsequent report and accompanying consent.
The information in this annual report that relates to Mineral Resources or Ore Reserves is extracted from the Mineral Resource and Ore Reserve Statement
released to the Australian Securities Exchange on 20 February 2019 and for which Competent Person’s consents were obtained. The Competent Person’s
consents remain in place for subsequent releases by the Company of the same information in the same form and context, until the consent is withdrawn or
replaced by a subsequent report and accompanying consent.
The Company confirms that it is not aware of any new information or data that materially affects the information included in the original ASX announcements released
on 26 July 2018, 20 February 2019, 30 May 2019 and 1 July 2019 and, in the case of estimates or Mineral Resources or Ore Reserves, that all material assumptions and
technical parameters underpinning the estimates in the original ASX announcement continue to apply and have not materially changed. The Company confirms that
the form and context in which the Competent Person’s findings are presented have not been materially modified from the original ASX announcement.
I
G
O
A
N
N
U
A
L
R
E
P
O
R
T
2
0
1
9
I
N
D
E
P
E
N
D
E
N
C
E
G
R
O
U
P
N
L
A
B
N
4
6
0
9
2
7
8
6
3
0
4
igo.com.au