CONTENTS
FY20 Snapshot
Chairman & CEO Message
CFO Report
Our Purpose & Strategy
Executive Leadership Team
Our People
Our Safety
Operational Scorecard & Outlook
Key Operations & Projects
Nova Operation
Tropicana Operation
02
04
06
08
10
12
16
18
19
20
22
Regional Exploration & Development
Mineral Resources & Ore Reserves
Competent Persons Statement
Making a Difference
Sustainability
Corporate Governance
Board Profile
Directors’ Report & Remuneration Report
Financial Report
Additional ASX Information
Company Directory
24
28
31
32
34
36
40
42
73
133
136
Our Purpose & Strategy
Our People
Our Safety
08
12
16
Key Operations & Projects
Exploration
19
24
Making a Difference
Sustainability
32
34
IGO ANNUAL REPORT 2020 — 1
FY20 Snapshot
FY20 was a year of unique challenges, including devastating bushfires and the COVID-19
pandemic. Throughout, IGO demonstrated remarkable resilience and adaptability. The Company
achieved record revenue and underlying EBITDA for the second year in a row. Nova production
exceeded guidance range for all metals and Tropicana delivered within guidance range. The
performance of our two core producing assets generated underlying free cash flow of $311M
and net profit after tax of $155M.
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 PRODUCTION
TROPICANA PRODUCTION
EXPLORATION ACTIVITY
Nova’s production exceeded
the top end of metal
production guidance with
production of 30,436t nickel
and 13,772t copper.
Tropicana delivered 463,118oz
of gold production on a 100%
basis and produced its three
millionth ounce of gold during
the second half of FY20.
Substantial exploration
activity to unlock the mines
of the future continued across
the IGO portfolio, while also
expanding our belt-scale
land holdings.
PROACTIVELY GREEN
NEW DEVELOPMENT
Nova Solar Farm commissioned
generating enough power
to displace ˜6,500t of CO2
emissions per annum. This is
equivalent to the emissions of
˜450 Australian households.
Development of the Boston
Shaker Underground Mine at
Tropicana on track to reach
commercial production in the
September 2020 quarter.
FINANCIAL SUMMARY
REVENUE
PROFIT AFTER TAX
DIVIDENDS PER SHARE PAID
$892M $155M
13%
Total revenue and other income
104%
14.0c
250%
• Company-wide employee engagement is strong and stable with positive
results across many areas:
– Overall engagement score of 69%, a stable result after achieving 70%
in 2019
– 91% of those surveyed said IGO has a work environment accepting of
diverse backgrounds; and
– 88% of those surveyed indicated that they are proud to work for IGO.
• With great sadness, in September 2019, IGO reported the tragic death of one
of our contractors' employees in an accident at Nova.
• IGO’s Total Reportable Injury Frequency Rate (TRIFR) for FY20 was 16.9,
significantly up from 9.6 for the previous year.
• Establishing an improved safety culture and reducing both actual and
potential incidents continued to be a key focus for the Company in FY20.
• Over $603,000 invested in Corporate Giving compared to $475,000 in FY19.
• In addition to the Corporate Giving spend, IGO pledged an additional
$250,000 Community Fund to be distributed to the Norseman and Esperance
communities to assist with their COVID-19 and bushfire recovery plans.
OUR PEOPLE
We believe that our
organisational culture is an
important reason why our
employees choose to work
for us and that building the
strength of our culture is
vital to our success.
Pg 12
OUR SAFETY
IGO has a culture of care
and, as a result strive to
provide a safe place of
work, a safe system of work
and demonstrated safety
behaviours.
Pg 16
OUR COMMUNITY
Making a Difference is
our reason for being,
our purpose. Every single
person in our business has
made a difference
this year.
Pg 32
SUSTAINABILITY
We care about doing what
is right – not just because
it is good for business but
because it is the right thing
to do.
• Production royalty payments from Nova to the Ngadju Native Title Aboriginal
Corporation (NNTAC) totalling $3.7M, up from $3.3M in FY19.
• Payments to government entities in royalties and taxes totalled $36.4M.
• Admitted to the Dow Jones Sustainability Index Australia in September 2019.
• A large-scale Environmental Impact Assessment (EIA) completed across all
our exploration activities within the Fraser Range Project.
Pg 34
2 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 3
Chairman &
CEO Message
It is our joint pleasure
to summarise IGO’s
performance for the
2020 financial year.
STRATEGY AND PURPOSE
IGO remains firmly focused on our
strategy to become a globally relevant
supplier of metals, which are critical
enablers of the rapidly growing energy
storage and renewable energy markets
as well as electrification of transport.
Despite the uniquely challenging
global events during the year, demand
for high quality, sustainably produced
raw materials, such as nickel and
copper, continues to increase as the
world progresses down a pathway
toward decarbonisation. IGO is excited
to be part of and ideally positioned to
benefit from this revolution, continuing
to Make a Difference.
We strongly believe that our reason for
being goes far beyond merely being
a mining company. We know we are
accountable to all of our stakeholders
in the way in which we go about our
business, be they shareholders,
employees, contractors, Traditional
Owners, local communities or our
customers. During FY20, we continued
to pursue our commitment of value
and care to deliver safe, reliable
and sustainable operations while
improving our operating and financial
performance.
OUR PEOPLE – OUR PRIORITY
While the impact of the global
COVID-19 pandemic has been
disruptive on a global scale, the
mining industry has demonstrated its
ability to adapt quickly to changing
circumstances and, importantly,
proven its critical role in supporting
the Australian economy. IGO is
pleased to have played our part and
are proud of our industry which has
shown genuine care for the safety
and wellbeing of its people and the
broader community during this crisis.
The pandemic has impacted all
of us and continues to present
unprecedented changes to the way
we live and work. During the year,
our people also faced the threat
of bushfires at Nova, as well as the
tragic death of one of our contractors'
employees at Nova. At the time of
writing it has been some 10 months
since the accident and we continue
to feel for the loss of his family and
friends. These events impacted our
team deeply and tested our unique
culture, but we are proud of the way in
which our people have supported each
other and shown that we really are
Better Together.
Despite our ongoing commitment
to safety, we are disappointed that
our safety performance was below
where we would like it to be, with our
Total Reportable Injury Frequency
Rate (TRIFR) increasing over the
course of the year. As a result, we have
implemented a Safety Improvement
Plan focused on our systems of
work, workplace hazard reduction
and the behaviours known to lead to
better safety outcomes. Board and
management are acutely focused on
this issue and we are confident these
changes will result in an improvement
in our future safety performance.
The success of our business is a direct
reflection of our culture and the level
of engagement our people have with
what we are aiming to achieve. We are
pleased that our 2020 Engagement
Survey found our people remain highly
engaged and are proud to work for
IGO. We have proactively worked
to build a culture which is friendly,
supportive, challenging and fun,
and the feedback we have from our
people is that they are energised and
motivated to go the extra mile for IGO,
a direct result of our culture.
At Nova, we have continued on our
journey to unlock productivity, cost
savings and safety outcomes through
technology and innovation. This is a
work program that will continue at
Nova and promises to deliver stronger
returns and a more engaged workforce.
At Tropicana, the focus during FY20
has been on delivering the first
underground mine at Boston Shaker,
which at the time of publication was
on track to achieving commercial
production in the September 2020
quarter. The development of this
project on time and on budget, is
testament to the ability and strong
management of our joint venture
partner, AngloGold Ashanti Australia
and our key contractors.
POSITIONED FOR GROWTH
With our record of strong operational
and financial performance, IGO is in an
ideal position to deliver on our growth
ambitions – both through exploration
and discovery, and via disciplined
mergers and acquisitions.
During FY20, we continued our
commitment to exploration and
discovery to unlock the mines of the
future. Our technical capability in this
area is ‘best in class’, and we have built
a portfolio of belt-scale projects which
are highly prospective for commodities
aligned to our clean energy metal
strategy.
In Western Australia, we continue to
prioritise work on the Fraser Range,
where we have systematically worked
to discover repetitions of the Nova
orebody over the past two years.
Discovery on the Fraser Range would
deliver significant value to IGO
shareholders and this remains a key
focus into FY21 and beyond.
Elsewhere in Western Australia,
we have expanded our belt-scale
positions in the Kimberley and
consolidated a new land package in
the Paterson region which is highly
prospective for Tier-1 copper and
precious metals discoveries. In
addition, we continued to progress
the Raptor and Lake Mackay Projects
in the Northern Territory, the Copper
Coast Project in South Australia and
the Frontier Project in Greenland.
We also remain highly active in
assessing opportunities to grow the
business via mergers and acquisitions,
as evidenced by the public takeover
offer for Panoramic Resources Ltd in
late 2019. While IGO did not proceed
with this transaction, our team
continue to review and conduct due
diligence on a range of opportunities
which are aligned to our strategy and
which deliver superior returns for our
shareholders.
THANK YOU
Despite the global challenges we
are all facing, IGO is in a very strong
position. This has been in large
part thanks to our dedicated and
hardworking people who have adapted
to new ways of working and have
continued to Make a Difference. We
take this opportunity to thank our
people for their contributions and their
families and friends for their support.
We also express our thanks to our host
communities, suppliers, contractors,
industry associations and regulators for
their assistance throughout the year.
Lastly, we would like to thank our
shareholders and our employees,
many of whom are also owners of
the business, for your continuing
support and trust in the Board and
Leadership team.
PETER BILBE
CHAIRMAN
PETER BRADFORD
MANAGING DIRECTOR
& CHIEF EXECUTIVE OFFICER
SUSTAINABLE OPERATIONS
Sustainability is a key pillar of
IGO’s strategy, and our people
are committed to ensuring we
are able to deliver value and care
over the long-term for all of our
stakeholders. Reducing our impact on
the environment through innovative
thinking, processes and technology,
is central to our strategy to be
Proactively Green.
During FY20, our partner Zenith
Energy completed and successfully
commissioned the 5.5MW solar farm
at Nova with first power delivered
during December 2019. The solar
farm is designed to generate enough
power to displace approximately 6,500
tonnes of CO2 emissions per year,
while also lowering costs at Nova. This
demonstrates IGO’s commitment to
reducing our carbon footprint.
Elsewhere, we also continued
to support our local community
stakeholders, through high levels of
engagement, offering employment
opportunities and our active corporate
giving program. During the year,
we made financial donations to a
number of organisations important
to our host communities, including
the Royal Flying Doctor Service, the
Earbus Foundation WA and Madalah,
as well as local community groups in
Norseman and Esperance.
As a result of our commitment to
sustainability, IGO was proud to have
been admitted to the Dow Jones
Sustainability Index Australia in
September 2019. This is an important
recognition for the Company. IGO is
placed in the top 30% of companies in
the S&P/ASX 200 Index.
CONTINUED OPERATIONAL
PERFORMANCE
During the year our teams at Nova
and Tropicana delivered outstanding
operational results, despite the
challenging conditions.
Key achievements during FY20
included:
• Nova production exceeded our
guidance range for all metals for the
second year in a row
• Tropicana delivered performance
within guidance while progressing the
development of the Boston Shaker
Underground Mine to plan; and
• We successfully progressed our
extensive exploration portfolio
toward discovery, with substantial
drill programs testing numerous
targets during the year, while
also expanding our belt-scale
land holdings.
4 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 5
CFO Report
SCOTT STEINKRUG
CHIEF FINANCIAL OFFICER
I am delighted to provide this overview
of IGO’s FY20 Financial Results
– a year in which the quality of our
portfolio and our continuing pursuit
of operational excellence combined
to deliver record revenue, underlying
free cash flow and net profit after tax.
The outstanding financial results have
positioned IGO with a strong balance
sheet to provide strong returns for
our shareholders, fund our extensive
exploration programs to unlock value
through discovery and to pursue
growth through disciplined mergers
and acquisitions.
Our operations delivered year-on-
year growth across all key measures.
Group revenue and other income in
FY20 was $892M, 13% higher than
FY19, primarily driven by higher
realised metal prices over the year.
Underlying free cash flow was 11%
higher than the FY19 result at $311M,
while net profit after tax of $155M was
104% higher than FY19.
Delivery of this strong financial
performance was possible due to
strong production performance in
line with guidance, combined with
sustained high margins from both
Nova and Tropicana.
• Nova delivered metal production
in excess of guidance (30,436t Ni,
13,772t Cu, 1,142t Co) at cash costs
of $2.41 per payable pound of nickel,
which was within guidance. Nova
recorded full year EBITDA and free
cash flow margins of 59% and 54%
respectively.
• Gold production from Tropicana was
463,118oz (100% basis) at an all-in
sustaining cost of $1,171 per ounce,
which was within our guidance
range. Tropicana EBITDA margin was
60%, while delivering a free cash
flow margin of 29%.
The ability of IGO to generate strong
free cash flows resulted in significant
strengthening of the balance sheet
over the course of FY20. As at
30 June 2020, the Company held
a record cash balance of $510M,
investments of $108M and a small debt
position of $57M. IGO had intended on
making a principal payment of $29M in
March 2020, however due to the onset
of the COVID-19 pandemic, it was
deemed prudent to defer this debt
payment until September 2020. It is
expected that the debt will be repaid
in full in September 2020.
Sustaining and improvement capital
expenditure at Nova of $7M was below
guidance. This underspend relates to
the deferral of expenditure relating
to water infrastructure, a project
which continues to be assessed for
delivery in FY21. Capital expenditure
at Tropicana was also below guidance
for FY20, primarily driven by capital
efficiencies gained during the year.
IGO has continued its commitment to
delivering returns to shareholders via
dividends. In line with our shareholder
return policy to return 15-25% of free
cash flow to shareholder via dividends,
IGO’s interim and full year dividends
totalled 11.0 cents per share (both
unfranked). The shareholder return
policy was amended in early 2019, and
this along with capital management
more broadly will next be reviewed by
the Board in January 2021.
We have also continued to deliver
on our reputation for high quality
and transparent financial reporting.
In particular, IGO is among the few
companies that provide simultaneous
reporting of our audit reviewed
half-year results with our December
quarterly result, a practice which
is well regarded by many investors.
In addition, we have retained our
commitment to preparing voluntary
Tax Transparency Reporting with
the FY20 report due for release in
November 2020. In line with our
culture, we believe this is the right
thing to do and is another way IGO
is Making a Difference.
SHARE PRICE PERFORMANCE 1
MAX:
A$6.91
MIN:
A$3.40
1 As at market close 21 August 2020.
FY20 FINANCIAL SUMMARY
HIGHLIGHTS
Total revenue and other income
Underlying EBITDA1
Profit after tax
Net cash flow from operating activities
Underlying free cash flow1
Total assets
Cash
Marketable securities
Total liabilities
Shareholders’ equity
Net tangible assets per share ($ per share)
Dividends per share paid
1 See Glossary of Terms for definition.
HISTORICAL METAL PRODUCTION 1
FY20
$M
892
460
155
398
311
2,293
510
108
367
1,926
$3.26
14.0
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
The historical metal production charts below, represent five years of contribution from IGO's current operations and historical
contributions from the Long and Jaguar Operations that are no longer in the IGO portfolio. 2
NICKEL (t)
COPPER (t)
COBALT (t)
GOLD (oz) 3
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
6
1
Y
F
7
1
Y
F
8
1
Y
F
9
1
Y
F
0
2
Y
F
15,000
12,000
9,000
6,000
3,000
0
6
1
Y
F
7
1
Y
F
8
1
Y
F
9
1
Y
F
0
2
Y
F
15,000
12,000
9,000
6,000
3,000
3,000
0
6
1
Y
F
7
1
Y
F
8
1
Y
F
9
1
Y
F
0
2
Y
F
20,000
15,000
10,000
5,000
0
6
1
Y
F
7
1
Y
F
8
1
Y
F
9
1
Y
F
0
2
Y
F
1 Historic metal production of nickel, copper and cobalt includes metal units produced in concentrate (Nova and Jaguar) and metal in ore (Long).
2 The Long and Jaguar Operations were divested in May 2019 and May 2018 respectively.
3 Gold production for FY20 was lower than FY19 due to the operation commencing transition from open pit mining to a combination of open pit and underground
mining resulting in treatment of low grade stockpiles.
6 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 7
Our Purpose
& Strategy
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.
We are the IGO Difference.
Our Purpose, Making a Difference,
drives everything that we do at IGO.
Our strategy is focused on eight key
imperatives which will drive success.
The IGO Strategy
We believe our reason for being
stretches further than simply being
a mining company.
We want to make a positive
contribution to the world by
enabling the clean energy future
through our work discovering and
producing the metals which are
critical to this revolution. Nickel,
copper and cobalt are the key
ingredients for high-performance
batteries used in electric vehicles
and grid-scale energy storage
systems, as well as renewable
energy generation such as solar
and wind power. Through the work
we do, we are helping the world
transition to a low-carbon future,
which will make the world a better
place for generations to come.
Our purpose is what drives and
motivates our people as they go
about their work to generate returns
for our shareholders, while Making
a Difference to our environment and
our communities.
IGO STRATEGY
Our strategy is to become a globally
relevant producer of metals critical
to clean energy.
This strategy recognises the
opportunity IGO has to leverage its
financial strength, highly capable
team, diverse asset base and track
record of success to become a
leader in the discovery, development
and operation of metal projects
which will play an important role
as the world progresses down the
pathway of decarbonisation.
In FY20, our strategy had a
particular focus on growth to
deliver mine-life extensions and
new discoveries which provide value
to our stakeholders.
Our organic growth strategy
is focused on exploration and
discovery to unlock the mines of
the future. We are actively pursuing
step-change organic growth
through our portfolio of belt-scale
exploration projects in Australia
and internationally. IGO has
established a commanding position
through our consolidation of an
extensive ground position in the
highly prospective Fraser Range,
as well as belt-scale greenfield
opportunities in Western Australia
at the West and East Kimberley
Projects and the newly expanded
Paterson Project, in the Northern
Territory at the Lake Mackay
Project and the 100% owned Raptor
Project, as well as the Frontier
Project in Eastern Greenland. Our
highly capable in-house team has
a wide breadth of experience and
expertise firmly aligned with our
strategic focus on energy storage
and transmission metals.
We also have a focus on growing
the business through disciplined
mergers and acquisitions. Our
team is highly active in assessing
opportunities which are aligned
with our strategy, targeting new
clean energy metals projects which
meet scale, mine life and quality
metrics, while also delivering
robust financial returns and
strong Environmental, Social and
Governance (ESG) credentials.
We also remain determined to
become vertically integrated by
aligning ourselves with the supply
chains for energy storage and
renewable energy markets. During
FY20 we continued to develop
The IGO Process™, a proprietary,
innovative processing technology
that efficiently converts nickel
sulphide concentrate into nickel
sulphate, a key raw material for
the clean energy and the electric
vehicle battery market. We are
assessing partnership and
collaboration opportunities to
leverage our proprietary technology
into the battery precursor and
cathode supply chain.
SAFETY & WELLBEING
We care about the health and wellbeing of our
people and recognise that ensuring their safety
at all times is the most critical element to our
success as a business.
OPERATIONS
We are in control and committed to delivering on
our promises. We continue to strive to optimise
and maximise the assets through an enduring
commitment to operational excellence.
FINANCIAL
We recognise that consistent financial
performance will be a critical enabler to deliver
on our strategy.
PEOPLE
We value our people and the importance of
culture. We are bold, passionate, fearless, and
fun – a smarter, kinder, more innovative team.
ENVIRONMENT AND CLIMATE
We care about the environment and we are
committed to taking action on climate change
initiatives.
Strategically focused on metals
critical to clean energy
GLOBALLY
RELEVANT
VERTICALLY
INTEGRATED
Globally relevant supplier
of metals that are critical
to energy storage and
renewable energy.
Vertically integrated to
produce battery grade
chemicals and cathode
precursors.
QUALITY PRODUCTS
PROACTIVELY GREEN
Quality products desired
by end users made safely,
ethically, sustainably
and reliably.
Proactively green using
renewables, energy
storage and EV mining
equipments to reduce
carbon footprint.
STAKEHOLDERS
We demonstrate and deliver our distinctive
value proposition to all our stakeholders.
Delivered by people who are bold, passionate,
fearless and fun - a smarter, kinder, more
innovative team.
BUSINESS SUPPORT
AND TECHNOLOGY
We have ‘fit-for-purpose’ systems, processes,
and technologies, while fostering a culture of
continuous improvement.
GROWTH
We deliver transformational growth through
discovery, vertical integration and M&A.
8 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 9
Executive
Leadership
Team
PETER
BRADFORD
MANAGING
DIRECTOR & CHIEF
EXECUTIVE
OFFICER
KEITH
ASHBY
HEAD
OF HSEQ
& RISK
BAppSc (Extractive Metallurgy), FAusIMM
BSc (Botany)(Hons), MSc (Environmental Science), MAICD, RMIA, FAusIMM
Peter is accountable to the Board of Directors, for the day-to-
day management of the Company.
Peter was appointed Managing Director & CEO of IGO in
2014. Peter is a metallurgist and has significant experience in
senior leadership roles with exploration, project development
and mining companies in Australia and internationally. Peter
is President of the Association of Mining and Exploration
Companies Inc (AMEC) 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,
land access, quality, internal audit and risk management
within IGO.
Keith joined IGO in 2015 in the role of Sustainability Manager.
Keith has 25 years’ local and international experience in the
resources industry and 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 (Geology) (Hons), MAIG
Kate’s role is to provide guidance to the Company on all
legal matters. She provides legal oversight to assist with the
Company’s growth strategy, supports the Exploration and
Operational teams, and is directly involved in the Company’s
key stakeholder relationships and negotiations.
Matt’s role is accountable for the day-to-day operational
delivery and performance of the Company. This includes the
Nova and Tropicana Operations, Exploration, Health and
Safety, Technical Services, Technology and Innovation, and
Information Technology.
Kate joined IGO in 2011 and was appointed General Counsel
in 2017. Kate has 20 years’ experience as a lawyer specialising
in large scale resources litigation, corporate law and native
title. In addition to her corporate work, Kate was legal member
of WA’s Mental Health Review Board for eight years 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 over 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 in Australia, South America, Africa and Asia.
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 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 support the business of the Board as well
as advising and implementing good governance practices
across the organisation. Joanne also provides leadership and
oversight of Corporate Affairs, which includes stakeholder
engagement, communications, investor relations and the
Company’s 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 over 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 also
has significant international experience having worked across
Australia, Africa and Asia.
SCOTT
STEINKRUG
CHIEF
FINANCIAL
OFFICER
F.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 Fellow of Chartered Accountants Australia and New
Zealand 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.
10 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 11
Our People
AT A GLANCE
91%
1% FY19
Employees said IGO has a work
environment accepting of diverse
backgrounds.
88%
2% FY19
Employees said they are proud
to work for IGO.
83%
Employees said IGO actively
supports their learning and
development, consistent with FY19.
89%
4% FY19
Employees said they get a
sense of accomplishment
from their work.
12 — IGO ANNUAL REPORT 2020
At IGO, we believe that our organisational culture
is an important reason why our employees choose
to work for us and that building the strength of our
culture, year-on-year, is vital to our success.
ENGAGED IN OUR CULTURE
DEVELOPING OUR PEOPLE
We understand that employee
engagement is key to our success
and we know that it requires focus
and commitment to build and
maintain. Engaged employees go
above and beyond, are optimistic
and team oriented and show
a passion for their and others
learning and development. With
that in mind, it is pleasing to
observe our progress over time
and our employees' year-on-year
commitment to providing us with
this feedback on how to improve.
In FY20, we conducted our fourth
Company-wide annual Employee
Engagement Survey with a response
rate of 77% and a strong and stable
overall engagement score of 69%
(70% in FY19). Each year we use
the results to conduct deeper
investigations to understand
specific feedback, then weave this
into our culturing plans for the next
year. This year some strong themes
emerged to focus our efforts and
programs of work for the coming
year, including:
• Performance and relationship
management
• Leadership and career
development; and
• Leadership capability.
Enduringly, our people tell us that
our culture is friendly, challenging,
ambitious, supportive and busy
and, this year, they have added
happy and inclusive to that
impressive list.
Learning and Development
Refreshed
While 83% of our people said that
IGO actively supports their learning
and development, consistent with
FY19, our focus group work has
highlighted that our people want
even greater support in this area.
We care about the growth of
our people and believe that all
employees should enjoy the
benefits that an individually focused
development plan can offer to their
professional effectiveness. Plans
are tailored with programs for entry
and early career people - such as
scholarships, graduate programs
and mentoring - designed to
attract, support and develop
talented individuals. Programs
centred on deepening leadership
expertise, empowerment,
engagement and team performance
become prominent in plans for our
established career people. Details
on several of these programs are
provided in our 2020 Sustainability
Report.
Our upgraded Learning
Management System will allow us
to better plan and manage job-
specific and career development
training opportunities, technical
skill development, feedback and
collaboration opportunities and will
form the basis for our enhanced
leadership development programs
in FY21.
CASE STUDY:
EMPLOYEE
DEVELOPMENT
Callum first joined IGO in 2011 as
a Graduate Mine Geologist at the
Jaguar site and within 12 months was
offered a permanent role as a Mine
Geologist. Callum then transitioned
into the role of Production Geologist
at our Long Operation, a role he held
for over three years.
After his initial time with the Company,
Callum decided it was time to see
more of the world and went travelling
for 14 months.
Upon his return to Australia, Callum’s
enhanced skills of communication,
adaptability, planning, budgeting
and an appreciation for diversity
were ready to be put to good use
professionally. Callum found he could
not refuse when asked to rejoin IGO
in 2016 at our then new Nova site, in
the role of Mine Geologist.
Since then, Callum has worked at both
our Nova Operation and our Corporate
office where he has applied his skills
and experience and been able to
capitalise on continued development
opportunities. This experience has
paved the way for Callum to be
promoted to his current role as Senior
Mine Geologist whilst also working
towards completing an MBA.
If Callum wasn’t busy enough, he is
also expecting his first child with wife
Emma who will welcome their baby
into the world in early 2021 and plans
on utilising IGO’s paid parental leave.
For Callum, job satisfaction comes
from being able to experience
different facets of the business,
including the ability to work across
different sites, participate in strategic
projects and work closely with experts
in the field. These experiences have
made a big difference to Callum’s job
satisfaction and is one of the reasons
he returned to IGO.
IGO is proud to have been able
to support Callum in his career
development over the last nine
years and now personally as he
soon enters the new and exciting
world of parenthood.
Callum Laming, Senior Mine Geologist.
IGO ANNUAL REPORT 2020 — 13
Systems Support
High performing organisations
have effective systems to enhance
employees ability to do their jobs
well.
In March 2020, we began
implementing a new, whole
of business Human Resource
Information System (HRIS) -
taking the bold step to introduce
concurrent modules to support
core HR functions including
employee master data, learning and
succession planning, performance
and goal management, payroll,
time and attendance, remuneration
management and data analytics.
The implementation of this new
system will provide the foundation
for improvements in our employee
experience and enable a range
of initiatives throughout the
organisation through enhanced
data management and analytics.
MORE THAN JUST
DIVERSITY
In a competitive talent market,
our focus on building an inclusive
culture is critical to IGO’s ability
to retain our talented people. By
valuing diversity and supporting
inclusion, we know that we will see
many benefits, including higher
employee engagement and happier
people, improved performance,
greater innovation and improved
employee wellbeing.
Improving gender diversity and
Aboriginal employment has been
the focus of the IGO leadership
team for many years. Whilst it is
acknowledged that true diversity
goes much further than this, at a
basic level the IGO approach has
been to improve gender balance as
a natural starting point on a journey
to drive more widespread change.
Our Annual Engagement Survey
indicated that our workforce is
highly aligned to this view with 91%
of respondents agreeing that our
workplace is accepting of diverse
backgrounds and thinking.
Gender Balance
IGO continues to maintain a gender
balance that is better than many
mining industry employers, however
achieving a more gender balanced
workforce in a year of significant
challenge has been a collaborative
effort. In FY20 the key highlights
included:
• Appointment of an additional
female Non-executive Director
• The award of 11% of internal
promotions to female candidates
• Achievement of an improved
gender diversity of FY20 vacation
students (61% female in FY20, up
from 20% in FY19)
• Strong support for our Paid
Parental Leave program with the
majority of participants (83%)
being male; and
• Broadening our flexible work
arrangements.
Our Gender Equality Report for
FY20, lodged with the Workplace
Gender Equality Agency, can
be found on our website and
comments on the report are
welcomed by emailing igofurther@
igo.com.au.
FEMALE REPRESENTATION
FY19
Board
14%
FY20
29%
Senior Executive roles
33%
33%
All management and professional roles
25%
Total workforce
25%
25%
24%
In collaboration with our culturing
programs aimed at improving
empowerment, satisfaction and
ownership, at IGO we believe
that employee share ownership
has made a difference to the
connection that our employees
have to our business and our
strategic objectives, and their part
in achieving our future. In FY20, key
achievements included:
• 100% of eligible employees
accepted their $1,000 grant under
the Employee Share Ownership
Award with the program now
an important part of the IGO
employee value proposition for
current and prospective employees
• 54% of employees have elected to
participate in our Salary Sacrifice
Share Plan to purchase IGO shares
and receive the 1 for 1 share benefit
(up to $5,000) - an increase of 7.4%
of employees in FY19; and
• 69% of employees believe
that if IGO does well, they will
appropriately share in its financial
success, an improvement of 8%
on FY19.
Aboriginal Employment
In FY20, we continued our programs
to support the employment of
Aboriginal people across the
business. Key highlights include:
• Maintaining Aboriginal
employment at approximately
3% of direct employees
• Development and engagement
of leaders to better support
Aboriginal employees in the
workplace
• Continued support for our Ngadju
cultural competency workshops;
and
• Continued support for Ngadju
apprenticeships in partnership
with Barminco, one of whom was
named 2019 WA Apprentice of the
Year.
In FY21, IGO will implement
additional measures to improve
inclusion through our culturing
programs, KPIs and learning and
development. While we understand
that our people believe inclusion is
already a feature of our IGO culture,
we believe that this increased focus
will be key to improving diversity
across the business over time.
WELLNESS AND
WELLBEING
While FY20 was a challenging
year for health and wellbeing, we
maintained our holistic approach,
aiming to address the needs of
our unique workforce by tailoring
programs and events to address
individual and team needs. In FY20,
IGO continued health initiatives
begun in FY19 with our annual
Health and Wellbeing calendar
including skin checks, health
screens, volunteering programs and
mental health awareness. New for
FY20 was the inclusion of a “Psych
on Site” psychology service and the
commencement of our IGO Mental
Health Guidelines at Nova.
With the arrival of COVID-19, our
challenge was to continue the
important work of supporting our
employees physical and mental
wellbeing in an immediately online
world. We were able to quickly
convert most programs (education
webinars, mental health initiatives,
exercise classes and ergonomic
assessments) to an online health
platform, supplied to us by our
partners WFR and is called 'Working
from Home, Working Alone'. This
program provided support to our
people and their direct family
members to stay motivated and
remain active and healthy whilst
in isolation.
Key to our COVID-19 response
was the Mental Health Support
Survey we conducted to assess the
fast-changing circumstances and
allowing us to action the issues and
concerns surrounding the impact
of COVID-19 on our people and
their families. One such action was
the introduction of a temporary
COVID-19 leave category. This
leave provided our people with an
additional 20 days personal leave,
should they require it, to care for
themselves or their family through
the pandemic without loss of
earnings.
EMPOWERMENT
THROUGH OWNERSHIP
At IGO, we believe that we can Be
Better Together. Harnessing the
talent and energy that are within our
people is one of our competitive
advantages and we know that
only engaged and empowered
employees will do this.
COVID-19
The COVID-19 global pandemic,
has profoundly impacted the lives
of people around the world. At
IGO, the health and safety of our
people, their families, and the
communities in which we operate
is our highest priority. In response
to the pandemic, we implemented
a range of measures to safeguard
our people, protect our ability to
operate and to minimise the spread
of COVID-19 within the communities
closest to our operations.
Our response to the crisis was swift
and effective, and we are proud that
the broader mining industry also
demonstrated a high degree of care
for its people and an ability to act
quickly to ensure people’s safety.
The mining industry has played
an important role in providing
economic stability for Australia
during this crisis and we feel
privileged to be able to continue
our important work.
Safeguarding the Welfare
of our People
In response to the pandemic,
IGO implemented a number of
measures and put in place several
programs and policies to help our
people through this disruptive and
uncertain period. These included:
• Encouraging remote working
wherever possible
• Site travel restrictions and pre-
flight health screenings
• Temporary changes to operational
rosters to minimise crew changes
and interactions
• Enabling physical distancing on
site through additional charter
flights and bus transport, meeting
structures and changes to
some services/processes at the
accommodation village
• Establishing on-site quarantine
and testing capacity
• Increasing staffing levels for
key roles
• Specific mental health support
through expanded employee
assistance programs and new
‘Working from Home, Working
Alone’ resources
• COVID-19 Health Hotline and
Information Hub
• A COVID-19 leave category
offering an additional 20 days
personal leave to people directly
impacted by COVID-19; and
• Increased levels of communication
between leaders and their teams
to assist in team morale and
engagement with the business.
The COVID-19 pandemic is expected
to continue for some time, and
IGO remains alert to the risks to
our people, operations and our
communities. The measures we
have implemented are continuously
reviewed and, if necessary, updated
in response to the changing risk
profile, as well as government
directives and guidelines.
To date, our response to the
pandemic has been successful,
and this is a credit to all at IGO.
14 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 15
Our Safety
AT A GLANCE
EMPLOYEE SAFETY
FY20 was a poor year for IGO
in respect of safety outcomes.
It is with sadness we note the
death of one of our contractors’
employees at our Nova Operation.
INCREASED TRIFR
16.9 TRIFR IGO’s Total
Reportable Injury Frequency
Rate, significantly up from
9.6 in FY19.
MANAGING RISK
Continued to be a key focus
for the Company in FY20.
16 — IGO ANNUAL REPORT 2020
IGO has a culture of care and, as a result we strive to provide
a safe place of work, a safe system of work and demonstrated
safety behaviours.
RESULTS
It is with sadness we note the
death of one of our contractors’
employees at our Nova Operation
in September 2019. We offer our
condolences to this person’s
family, friends and colleagues.
As the accident is still subject to
review by the Western Australian
Department of Mines, Industry
Regulation and Safety, and may be
subject to legal proceedings in the
future, IGO is unable to provide
insight into the circumstances of
the accident. Notwithstanding this,
this tragedy has served to redouble
our resolve to improve the safety of
our workplaces, the efficacy of our
systems of work, and our efforts to
support a culture focused on the
safety and wellbeing of our people.
Beyond this tragedy, our people,
a term we use in reference to both
IGO employees and contractors,
also suffered a total of 27
reportable workplace injuries. This
is the worst result we have had in
many years. Clearly this outcome
is unacceptable. In FY20, IGO
experienced 26 serious and high
potential incidents in comparison
to 14 recorded for FY19. Although
each of these events resulted in
no injury or only a minor injury, the
potential outcomes are recognised
and changes have been made to
our business processes so as to
minimise our people’s exposure to
the hazards involved.
REVIEW OF OUR SYSTEMS
AND CULTURE
In response to these outcomes, IGO
is in the process of completing a
range of improvement activities.
As a central element of our safety
system we investigate incidents
and then look for patterns or trends
in the accumulated data. In FY20,
we completed a review of both
the incident report data and that
associated with the four preceding
years. This work was completed
by an independent third party,
Fusable. Whilst the work provided
many useful insights, it did not
identify any significant common
causal factors.
In FY20, we again completed our
Engagement Survey of our workforce
to gauge sentiment on, among
other issues, the management
of safety and our safety culture.
The results revealed that most
of our people continue to feel
supported by their supervisors and
management and are empowered
to take responsibility for their own
safety and that of their workmates.
Notwithstanding this positive
feedback, we are mindful of the
limitations of self-assessment.
During the year we also engaged an
independent safety expert, Churchill
Consulting, to complete a review of
our safety culture and systems. This
process, which involved interviewing
more than 10% of our workforce,
revealed both strengths and
weaknesses in our approach. It was
noted that our people:
• Believe care is a real IGO value
• Have a high level of trust in each
other and management
• Are motivated to ‘get the job done’
• Are receptive to feedback
and actively pursue business
improvement; and
• Have a strong incident and hazard
reporting culture.
CASE STUDY:
ENGAGING OUR
PEOPLE
IGO deliberately seeks to shape our
organisation’s culture. We recognise
that culture trumps strategy and
business process in determining
performance outcomes. This is
most pertinent for safety outcomes.
IGO has refocused our safety effort
on establishing a discrete set of
behaviours and processes intended
to define ‘what good looks like’. In
particular, we want our people to
engage each other ‘in the field’ in
conversation about how safety can
be improved and where necessary,
intervene if some aspect of a job
looks unsafe. This is a skill needed
by both supervisors, managers,
and front-line employees alike.
Experience has demonstrated that
this skill is best developed by means
of on-the-job coaching.
In FY20, IGO initiated a coaching
program at our Nova Operation.
The first step was to engage expert
coaches to mentor a group of
our supervisors. Having satisfied
ourselves that these individuals
have truly learnt the required skills,
they in turn become our internal
coaches. We call this process
Field Engagement. The success or
otherwise of this type of process
is determined by the quality of the
conversations; not just in terms of
the technical insight but perhaps
more importantly, the sincerity of
those involved in the engagement.
We already have a culture of care.
We want this to translate to action.
To date, we are pleased with the
initial results, however it takes time
to realise the benefits of culture
shaping efforts. This program will be
rolled out throughout the Company.
For further information on IGO’s
safety performance and safety
programs, please refer to the 2020
Sustainability Report which will be
released in September 2020 and
can be found in the Sustainability
section of IGO’s website at https://
www.igo.com.au/site/investor-
center/sustainability-reports2.
ERT training at Nova.
IGO ANNUAL REPORT 2020 — 17
However, it was also noted that IGO
needs renewed focus on:
activities used to manage the most
significant workplace hazards
• The visibility of our leaders ‘on
• Documented Safety Systems –
the job’
• Long-term safety risk reduction
and process safety
• The management of critical risks
and their controls
• Consistent organisational
discipline regarding adherence
to safety procedures; and
• The direct mentoring and on-
the-job coaching of our people
in good safety practice.
DELIVERY ON THE FY20
SAFETY IMPROVEMENT
PLAN
IGO’s safety improvement
planning is overseen by a Safety
Steering Committee comprised of
representatives of IGO’s Executive
Leadership Team, our operations’
General Managers, and our
senior safety professionals. The
Committee is responsible for the
development and execution of the
corporate-wide safety improvement
plan and providing oversight of
execution of the operational safety
improvement plan. This structure is
intended to bring focus to shaping
IGO’s safety culture, improving the
physical safety of our workplaces,
and improving our systems of work.
In response to both the incidents
and the outcomes of the reviews
described above, our FY20 Safety
Improvement Plan drove the
following activities:
• Field Engagement – coaching our
people on the job (see Case Study
– Engaging Our People)
• Design Reviews – reviewing
hazards inherent to the design
of key elements of the plant
at Nova in respect of both
operability and maintainability
• Risk Management – improving
our focus of the management of
‘critical controls’ – the systems or
providing greater clarity about the
performance levels expected
• Training and Competence –
ensuring that our people know
what is required of them
• Assurance – checking to make
sure that everything is working,
and we are doing what we said we
would do
• Safety Support – ensuring our
safety professionals are focused
on where they add most value; and
• Incident Investigations – doing
more to learn from when things
go wrong.
These activities will be continued
into FY21.
IGO’S DESIRED SAFETY
CULTURE
The most significant determinant
of safety outcomes is workplace
culture. At IGO we proactively act
to create a workplace culture that
is characterised by the following
attributes:
• We care for each other’s safety
and wellbeing
• We act on the knowledge that the
design of workplaces and work is
central to safety outcomes
• We believe that our manager or
supervisor is concerned about our
safety and wellbeing
• We each understand our personal
responsibility for the management
of workplace hazards, the
effectiveness of our systems of
work, and how our behaviours
shape workplace culture; and
• We each have the courage to
speak up or intervene in unsafe
situations or if someone is at risk.
Operational
Scorecard
& Outlook
MINING
OPERATION
UNITS
FY20
GUIDANCE RANGE
FY20
ACTUAL
FY21
GUIDANCE RANGE
NOVA (IGO 100%)
Nickel in concentrate
Copper in concentrate
Cobalt in concentrate
Cash cost (payable)
Sustaining & improvement capex
Development capex
TROPICANA (IGO 30%)
Gold produced (100% basis)
Gold sold (IGO’s 30% share)
Cash cost
All-in Sustaining Costs
Sustaining & improvement capex (30%)
Capitalised waste stripping (30%)
Underground capex (30%)
EXPLORATION EXPENDITURE
Total Exploration Expenditure
t
t
t
$/Ib Ni
$M
$M
oz
oz
$/oz Au
$/oz Au
$M
$M
$M
$M
27,000 to 30,000
11,000 to 12,500
850 to 950
2.00 to 2.50
24 to 26
6 to 8
30,436
13,772
1,142
2.41
6.9
6.3
27,000 to 29,000
11,000 to 12,500
850 to 950
2.40 to 2.80
18 to 20
2 to 4
450,000 to 500,000
135,000 to 150,000
463,118
141,169
380,000 to 430,000
114,000 to 129,000
700 to 780
1,090 to 1,210
13 to 15
42 to 47
26 to 29
806
1,171
9.1
37.8
23.5
1,040 to 1,120
1,730 to 1,860
11 to 16
65 to 70
10 to 14
63 to 68
64.8
65
Key Operations
& Projects
KIMBERLEY PROJECT
IGO 100% and various JVs
PATERSON PROJECT
IGO 100% and various JVs
TROPICANA OPERATION (Au)
IGO 30%
NOVA OPERATION (Ni-Cu-Co)
IGO 100%
FRASER RANGE PROJECT
IGO 100% and various JVs
HEAD OFFICE PERTH
OPERATIONS
EXPLORATION ACTIVITIES
NI/CU/CO
CU/AU
D
N
A
L
N
E
E
R
G
FRONTIER PROJECT
IGO up to 80%
RAPTOR PROJECT
IGO 100%
LAKE MACKAY PROJECT
IGO up to 70%
COPPER COAST PROJECT
IGO 100%
18 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 19
Nova Operation
NICKEL-COPPER-COBALT
IGO 100%
AT A GLANCE
Location
140km by road, east northeast of Norseman,
Western Australia.
Product
Nickel (Ni), Copper (Cu), Cobalt (Co), produced
as a concentrate.
Mining
Underground mining utilising our primary contractor,
Barminco.
Processing method
Owner-operated processing operation, using
conventional crushing, grinding, flotation and filtration.
Sales/Offtake
All of nickel concentrate product is sold in equal volumes
to BHP Billiton Nickel West Pty Ltd and Trafigura Pte.
Ltd (previous to 31 December 2019 sold to Glencore
Australia). 100% of copper concentrate is contracted
to Trafigura Pte.Ltd.
FY20 Production
30,436t Ni, 13,772t Cu, 1,142t Co
FY20 Payable Cash Costs
A$2.41/lb Ni
Resources1
234,000t Ni, 94,000t Cu, 8,000t Co
Reserves1
177,000t Ni, 74,000t Cu, 6,000t Co
Estimated Mine Life
6 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 30 of this report.
20 — IGO ANNUAL REPORT 2020
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.
Nova is located in the Great Western Woodland,
approximately 140km by road east northeast of
Norseman in Western Australia.
The Nova deposit was discovered in July 2012,
with development of the current operation
commencing in January 2015. Following a
successful construction and commissioning
phase, the operation commenced commercial
production in July 2017, and reached its nameplate
production rate in the December 2017 quarter.
FY20 PRODUCTION
Nova’s strong track record of operational
performance continued in FY20 with nickel, copper
and cobalt production exceeding the top end of
our guidance range. Outperformance was primarily
driven by higher than forecast milled grades, and
improved copper recoveries over the year.
MINING
An updated Annual Mineral Resource and Ore
Reserve Statement was published in January
2020, demonstrating substantially all ore reserves
are in the Proved Ore Reserve category. IGO’s
early investment in life of mine grade control
drilling has enabled enhanced mine planning and
forecasting for the remaining mine life.
Mine development is also substantially complete,
enabling a high degree of flexibility in the
stoping sequence, which assisted in the strong
performance in FY20. The jumbo team was
reduced to a single crew as mine development
became part of the production cycle.
Mined grades during FY20 were higher than
reserve grade due to the prioritisation of mining
of high-grade stopes.
total power requirements since
commissioning. This has resulted in
significant savings of diesel usage,
as well as reducing Nova’s carbon
emissions by 7.3% for just the half year.
NEAR-MINE
EXPLORATION
IGO has an enduring commitment to
organic growth through exploration
and discovery. During FY20, a
significant proportion of our overall
exploration budget was allocated to
near-mine exploration at Nova.
Our activity during FY20 was
highly drill intensive, as we
tested a large number of targets
identified through geophysical and
geochemical programs in previous
years. Over 23 targets were drilled,
with multiple holes intersecting
mafic-ultramafic intrusions – the
rock types which are associated
with the Nova orebody. These
intrusions contained disseminated
magmatic iron-nickel-copper
sulphides, which is encouraging.
In FY21, we will continue to focus
our skills and resources on drilling
in close proximity to Nova – where
successful discovery promises to
deliver further value to shareholders.
Leveraging the latest exploration
technology, our focus will be on
diamond and aircore drilling to test
the best geophysical, geochemical
and geological targets we have
identified in past programs. We
will also continue to generate new
targets through our low and high
temperature SQUID electromagnetic
surveys, technology which is at
the forefront of deep sensing
geophysical methods.
PROCESSING
Processing operations at Nova
performed exceptionally well during
FY20, with total ore milled in line
with the plant’s 1.5Mtpa nameplate
capacity. Strong improvements were
achieved for copper recoveries,
which increased from 85.6% to 87.7%
over the year. A program of work is
ongoing to transfer learnings from
this achievement to improving nickel
recoveries over the course of FY21.
OPERATIONAL
EXCELLENCE
At IGO, we continue to seek
ways in which we can improve
productivity and reduce costs
while maintaining a safe and
sustainable operation. Our pursuit
of operational excellence involves
a particular focus on leveraging
technology and innovation, which
we call Smart Solutions.
During FY20, we continued to
assess and implement a range of
Smart Solutions at Nova including:
• Remote bogging from surface,
which improves equipment
utilisation rates and keeps
operators out of harm’s way
• Remote firing from surface via our
optic fibre network
• Advanced data capture, processing
and analytics to enable real-time
decisions at mine-control to
improves efficiencies; and
• Real time tracking of personnel
underground.
IGO also undertook a study focused
on electrification of the mining
fleet which has the potential
to significantly reduce carbon
emissions, improve working
conditions underground, and lower
operating and maintenance costs.
This is an exciting area, and IGO will
continue to assess this emerging
technology for application at both
Nova and any mine development we
undertake in the future.
SUSTAINABILITY
As part of our strategy to be
Proactively Green, IGO has continued
to seek ways in which to minimise our
impact on the environment.
During FY20, our partner Zenith
Energy completed and successfully
commissioned the 5.5MW solar farm,
which has been fully integrated with
the existing diesel power station
at Nova. This hybrid system has
exceeded performance targets for
power output and energy efficiency
and has delivered over 10% of Nova’s
CASE STUDY:
COPPER AND
NICKEL RECOVERY
IMPROVEMENTS
AT NOVA
As part of our ongoing pursuit for
operational excellence and process
improvement, the metallurgy team at
Nova undertook a series of projects
during FY20 designed to improve both
nickel and copper recoveries.
The first focus was achieving process
stability, as identifying problems and
measuring improvements is difficult
for an unstable process. Changes in
operation of the grinding circuit have
resulted in more stable throughput
rates, flotation feed density and product
particle size distribution. Once this
stability was achieved, targets and
control strategies were employed to
ensure flotation feed conditions were
optimum for maximising copper and
nickel recovery. Improvements in
flotation stability were also achieved
through progressive changes to the
StarCS® advanced control software
employed at Nova.
Control philosophies for each flotation
stage were then revised to target
improved recovery. Examples include
control of pH levels in the copper circuit,
splitting control of flotation banks to
independently target recovery and
product specification, use of combined
air and level control, and reductions in
mass pull to cleaning banks resulting in
more efficient cleaning.
These changes have resulted in an
improvement in the average copper
recovery from 85.6% to 87.7% across
the year, and significantly better
control over nickel impurities in the
copper concentrate. Following this
success, and using the valuable
knowledge gained, attention has now
turned to improvements in the nickel
circuit. While there is further work
to complete in FY21, the team have
achieved stable periods of 90% nickel
recoveries – a very promising sign.
Flotation circuit at Nova.
IGO ANNUAL REPORT 2020 — 21
Tropicana Operation
GOLD
IGO 30%
(ANGLOGOLD ASHANTI 70% AND OPERATOR)
AT A GLANCE
Location
330km northeast of Kalgoorlie, Western Australia
Product
Gold (Au)
Mining
Open pit mining utilising Macmahon as primary
contractor, from four contiguous open pits, Tropicana,
Boston Shaker, Havana and Havana South.
The Boston Shaker Underground Mine is expected to
produce first gold during the September 2020 quarter.
Processing
Conventional crushing, grinding and CIL (carbon-in-
leach) recovery.
Sales
Gold dore is delivered to Perth Mint. Golds sales are via
forward sales contracts with IGO’s banking partners and
spot price sales to the Perth Mint.
FY20 Production
463,118oz (100% basis)
141,169oz (IGO 30% share)
FY20 Cash Costs and All-in Sustaining Costs
A$806/oz
A$1,171/oz
Resources1
7.02Moz Au (100%)
Reserves1
3.03Moz Au (100%)
Estimated Mine Life
Approximately 7 years at current throughput rates based
on reserves.
Growth Potential
Production from the Boston Shaker Underground Mine
will improve the production profile and extend mine
life. Resource extensions below the Tropicana, Havana
and Havana South open pits provide the potential for
additional future underground operations.
1
See Resources and Reserves section on pages 28 to 30 of this report.
22 — IGO ANNUAL REPORT 2020
The Tropicana Operation is located on
the western edge of the Great Victoria
Desert, with the Wongatha and Spinifex
people recognised as the Traditional
Owners and custodians. Tropicana
is operated as a Joint Venture
between IGO with 30% ownership and
AngloGold Ashanti Australia (AGAA),
who are the operators and holders of
the remaining 70%.
IGO first identified and secured the Tropicana
tenements in 2001 and, following the formation
of the Joint Venture with AGAA, the Tropicana
discovery was made in 2005. Additional
discoveries were made at Havana in 2006 and
Boston Shaker in 2010, which was the catalyst
for the completion of a Bankable Feasibility
Study and development approval in 2010. Mining
commenced in 2012 and first gold was produced
in September 2013.
Since then, over three million ounces have been
mined via open pit from the Tropicana Operation.
In the September 2020 quarter, gold production
will commence from the first underground
development beneath the Boston Shaker open pit.
FY20 PRODUCTION
Gold production for FY20 was 463,118oz Au (100%
basis), in line with guidance, with IGO’s share of
gold sold (30% basis) being 141,169oz Au.
Tropicana has demonstrated consistent
performance since production began in 2013, with
a track record of high margin production, ongoing
value optimisation, and outstanding safety.
MINING
During FY20, a total of 10.6Mt of ore and 81.7Mt
of waste material was mined at Tropicana from
a combination of the Boston Shaker, Tropicana,
Havana and Havana South open pits. Pit cut-backs
at Havana and Boston Shaker were progressed
during the year, as was development of the Boston
Shaker Underground Mine.
PROCESSING
TROPICANA EXPLORATION
The Tropicana mine sits on a
broader 2,600km2 tenement
package which remains relatively
underexplored. During FY20, the
Joint Venture partners significantly
increased the focus on unlocking
regional brownfields discovery
through various deep diamond and
RC drill programs.
Brownfields drilling activity was
mainly focused on resource
definition at the existing Havana
open pit. This drilling returned
strong results which has derisked
the resource and will allow the
Joint Venture partners to progress
toward a decision to develop an
underground mine at Havana.
Regional exploration programs
were also successful, with
encouraging results from targets
including Voodoo Child, New Zebra,
Springbok and Paradise, which will
be followed up in FY21.
Looking ahead, the Joint Venture
partners intend to continue
focusing on greenfield and
brownfields discovery, with a total
$9M budget (100% basis) for FY21.
The Tropicana processing plant
milled a total of 8.7Mt of ore during
FY20, at an average grade of
1.84g/t Au. This higher throughput
rate, as compared to FY19, was
implemented to offset lower head
grade milled during the year as the
operation transitions from open pit
to underground.
Average gold recoveries for the year
were 90.1%, an improvement on the
FY19 result of 89.4%.
BOSTON SHAKER
UNDERGROUND MINE
Development of the Boston Shaker
Underground Mine commenced in
May 2019 following the successful
completion of a Feasibility Study.
During FY20, development has
progressed on time and on budget,
with strong collaboration with
the lead underground mining
contractor, Macmahon Holdings.
Commissioning commenced in late
FY20, with commercial production
remaining on track to commence
during the September 2020 quarter.
Mining from the Boston Shaker
Underground Mine is targeted
at approximately 1.1Mtpa at an
estimated grade of 3.5g/t Au,
delivering circa 100,000 ounces
of gold per annum over a current
mine life of seven years. This
underground material will displace
lower grade open pit material
resulting in an improved production
profile and extend the overall mine
life at Tropicana.
With the underground now readying
for commercial production levels,
the Joint Venture partners have
commenced studies into the
viability of additional underground
mines at Tropicana, beneath the
current Tropicana, Havana and
Havana South pits.
CASE STUDY:
TROPICANA
ACHIEVES THREE
MILLION OUNCE
MILESTONE
Tropicana Joint Venture partners
AGAA and IGO celebrated a major
milestone during March 2020, with
the mine pouring its three millionth
ounce of gold.
First gold from Tropicana was
produced in September 2013 and
since then, IGO and AGAA have
worked together to optimise
productivity, reduce costs and
importantly, keep people safe.
The three million ounce production
milestone is an outstanding
achievement given construction of
Tropicana was approved in 2010 on
the basis of an initial 3.3 million ounce
ore reserve and 5.01 million ounce
mineral resource. At 31 December
2019, Tropicana gold reserves were
3.03 million ounces, while resources
were 7.02 million ounces.
While a planned celebration to mark
the three million ounce milestone
had to be cancelled due to COVID-19,
AGAA’s Senior Vice President, Mike
Erickson, commented that the
milestone was testament to the
quality of the mine, the management
and people.
“When you consider the mine
was originally based on a reserve
of 3.3Moz and still has 3.03Moz
ahead of it, as well as underground
production starting in the second half
of 2020, Tropicana really has been a
tremendous success,” he said.
IGO’s Managing Director and CEO,
Peter Bradford, added “Tropicana is
an outstanding asset which continues
to deliver high margin gold production
and strong cash flows to IGO. With the
Boston Shaker Underground Mine set
to produce first gold in the September
quarter of 2020, and further
opportunities for growth ahead, the
future at Tropicana is bright.”
Gold pour at Tropicana Gold Mine.
IGO ANNUAL REPORT 2020 — 23
Regional
Exploration
& Development
EXPLORATION PROJECTS & FY20 ACTIVITY
Fraser Range
Ni, Cu, Co
IGO 100% and various JVs
Targeting magmatic nickel-copper-cobalt deposits within the Albany Fraser Orogen.
Activities included:
• Extensive drilling of targets
• Ongoing regional RC/AC drilling
• Continuation of geophysics program.
Lake Mackay
Cu, Au, Ni, Co
IGO up to 70%
Targeting base metals deposits in an unexplored mineral province. Activities included:
• RC drilling of prospects
• Regional geochemical soil sampling
• Bench scale leach testwork of cobalt-nickel samples collected from Grimlock.
Kimberley
Ni, Cu, Co
IGO 100% and various JVs
Belt-scale project targeting magmatic nickel-copper-cobalt sulphide deposits along the
Halls Creek and Wunaamin-Miliwundi Ranges. Activities included:
• Airborne magnetic and radiometric surveys
• Engagement with Traditional Owners.
Raptor
Ni, Cu, Co
IGO 100%
Belt-scale project targeting nickel-copper-cobalt sulphide deposits along the Willowra
Gravity Ridge in the Northern Territory. Activities included:
• Aeromagnetic and radiometric surveys.
Paterson
Cu, Co, Au
IGO 100% and various JVs
Newly consolidated, belt-scale project targeting Tier-1 copper-cobalt and copper-gold
deposits in a highly prolific mineral province. Activities included:
• A large-scale magnetotelluric survey
• Geochemical analysis of surface soil samples.
Copper Coast
Cu
IGO 100%
Frontier
Cu
IGO up to 80%
Targeting sediment-hosted copper mineralisation on the Stuart Shelf. Activities included:
• A regional ground gravity survey
• A regional magnetotelluric line
• Planning for future geophysics and stratigraphic drilling programs.
Joint Venture targeting sediment-hosted copper deposits in geological setting analogous
to the Central African Copper belt. Activities included:
• The first field season during which geological mapping and geochemical sampling
provided data for drill target definition.
De Beers Database
Continued unlocking of unique sample database for new project generation.
24 — IGO ANNUAL REPORT 2020
ENDURING STRATEGY
TO UNLOCK ORGANIC
GROWTH
Exploration to discover the mines
of the future is a core part of IGO’s
growth strategy and a key area of
competence for the business.
IGO has an enduring commitment
to exploration and has built a best-
in-class team of experts to unlock
value from our extensive green and
brownfields exploration portfolio.
Our primary focus is on the discovery
of nickel, copper and cobalt,
commodities which are aligned to
our clean energy metals strategy.
During FY20, we made great
progress toward unlocking
discovery on belt-scale ground
positions at our Fraser Range,
Kimberley and newly consolidated
Paterson Projects in Western
Australia, Lake Mackay and Raptor
Projects in the Northern Territory,
as well as the Copper Coast Project
in South Australia and Frontier
Project in Greenland.
Our team had a busy and
successful year, however severe
weather over the summer months,
including bushfires and heavy rain,
delayed the commencement of
some of our work programs. Later
in the year, government-imposed
travel restrictions in response to
the COVID-19 pandemic further
limited our teams’ access to
some of our project areas. While
these circumstances impacted
our planned activity, care for our
people and the broader community
is IGO’s absolute priority and we
are proud of the way our team
adjusted their work plans and
continued their part in delivering
growth opportunities for IGO.
In FY21, our focus remains
unchanged. Our commitment
to exploration and discovery
continues, with a high level of
drilling activity planned to test
targets at the Fraser Range
Project, extensive field work to be
undertaken at the newly expanded
Paterson Project, and various other
work programs across the portfolio
that are considered high potential
to unlock value in the near term.
FRASER RANGE
IGO maintains a strong conviction
that the Fraser Range has the
potential to host multiple Nova-
style nickel-copper-cobalt ore
bodies, with the area also highly
prospective for volcanogenic
massive copper-zinc sulphides
and gold mineralisation. Our
exploration team is focused on
discovering deposits similar to IGO’s
100%-owned Nova Operation that
can either feed into the existing
Nova Operation or become a
standalone mine. Secondary targets
include volcanogenic massive
sulphide (VMS) copper-zinc-gold
mineralisation and lode style gold
mineralisation, which have been
identified at various locations along
the belt.
During FY20, IGO progressed its
systematic exploration activity over
the Fraser Range Project while also
continuing to consolidate our land
holding in this highly prospective
belt. The Fraser Range Project is
IGO’s highest ranked exploration
project and as at 30 June 2020
spans some 11,960 km2 of tenure.
IGO either holds tenements 100%
outright or is in joint ventures with
numerous parties whereby it has
earned between 65% and 90%
interest.
The FY20 program of work was
highly drilling intensive as we began
testing numerous targets generated
by geochemical and geophysical
work programs from previous years.
In total, more than 55 prospective
target areas were tested with some
200,000m of diamond and aircore
drilling – representing the busiest
year for our teams to date. This has
been an outstanding achievement
given the significant changes
required in response to the COVID-19
pandemic, which allowed us to
continue to work on the Fraser Range
while ensuring our team’s safety.
This intensive drilling program
yielded excellent results, with
drilling identifying multiple
mineralised mafic-ultramafic
intrusions in and around Nova.
These are the host rocks in which
the Nova Bollinger orebody was
discovered.
Highlights at the Fraser Range
Project included:
• The Chimera target, located
10km from the Nova Operation,
is an exciting new nickel-copper
sulphide target that was initially
identified in 2019 using aircore
drilling. Follow-up infill aircore
drilling in 2020 has returned
highly anomalous geochemical
results including; 15m @ 0.43% Ni
and 0.17% Cu from 42m, 26m @
0.15% Ni and 0.11% Cu from 46m,
and 23m @ 0.33% Ni and 0.07% Cu
from 38m1
• The Ecliptic target is located
approximately 500m south of
the Silver Knight nickel-copper
deposit controlled by the
Creasy Group. Diamond and RC
drilling has intersected highly
1 ASX Release – June 2020 Quarterly Report, dated 29 July 2020
Exploration Geologist, Fionnlagh Hunter interpreting
hyperspectral data from a Nova Drill Hole.
CASE STUDY:
USING HYPERSPECTRAL
IMAGING TO MAKE
EXPLORATION
DECISIONS
Diamond drilling is one of the most
advanced and expensive stages
of exploration target testing.
Therefore, it is crucial to extract as
much information out of the drill
core as possible, so better informed
decisions can be made earlier on,
and in a more cost-effective manner.
Traditional techniques in extracting
this information involves visual
logging, measuring the orientation
of geological structures, and the
collection of routine petrophysical
(magnetic susceptibility, electric
conductivity, and specific gravity)
and chemical (assay) data.
In December 2019, IGO began a
trial with the hyperspectral core
scanning provider, Terracore, to scan
drill core from the Nova-Bollinger
deposit and several prospects on
the mining lease in both Short Wave
Infrared and Long Wave Infrared.
Hyperspectral logging is new to the
nickel exploration space and uses
infrared radiation to identify and
map mineral variations in drill core,
at a scale and precision not even the
best nickel geologist in the world can
achieve. Combined with traditional
techniques, hyperspectral logging
has allowed IGO geologists to map
out critical processes that led to the
formation of the Nova-Bollinger
Ni-Cu-Co sulphide deposit in an
objective manner. This ability to
image critical processes in forming
Ni-Cu ore deposits is being applied
to other IGO prospects, so that
informed decisions can be made
about exploration targets at an
earlier stage, resulting in fewer drill
holes needed to test targets.
Ben Cave, IGO Technical Project
Geologist highlights, “Being a
first-mover in using the Terracore
system for exploring for Ni-Cu
systems demonstrates IGO’s
commitment to adopting new
innovative technologies. Results
have shown this technology could
be transformational to exploring
for these (and other) systems, and
places IGO in an excellent position as
this technology advances.”
IGO ANNUAL REPORT 2020 — 25
encouraging mafic and ultramafic
rocks, with blebby, stringer
and minor net-textured nickel
copper sulphides in all drill holes
completed to date; and
• The Orion prospect on the Nova
mining lease is one of a handful of
deep and blind targets that was
generated using the Company’s
3D seismic dataset in 2019. Deep
diamond drilling is gradually
revealing a compelling prospect
characterised by high tenor,
disseminated to blebby sulphides
in a chonolith-like host intrusion.
The successes gained in FY20
have been achieved through IGO’s
continued drive to improve its
technical capability and deliver
a significant discovery within the
Fraser Range. A key part of this
strategy is ongoing collaboration
with external partners and working
on a range of cutting-edge
projects, including advanced
seismic processing, microanalysis
of drilling samples and
hyperspectral core scanning.
Looking ahead to FY21, IGO will
continue to focus on methodically
testing the best targets, systematic
geological evaluation of the Fraser
Range; and building in-house
specialised knowledge to drive
discovery.
PATERSON
The newly expanded Paterson
Project comprises tenements
covering approximately 6,844km2
in the highly prospective Paterson
Province targeting sediment-
hosted copper-cobalt and copper-
gold mineralisation.
IGO has had an interest in the
Paterson region for some time
though our Yeneena Joint Venture
with Encounter Resources Limited. In
the June 2020 quarter, we expanded
our presence in the Paterson region
through joint ventures with Metals
X Limited and post year end with
Antipa Minerals Limited.
Through these new agreements,
IGO has added a significant
portfolio of greenfields exploration
projects which are highly
prospective for major base and
precious metals discoveries. IGO’s
tenure is proximal to operating and
historic mining operations such as
Nifty and Telfer, as well as recent
major discoveries including Rio
Tinto’s Winu copper-gold resource
and the Havieron gold-copper
prospect held by Newcrest Mining
Limited and Greatland Gold plc.
IGO intends to increase its focus
on this project in FY21 with various
geophysics and drilling programs
planned.
WEST AND EAST
KIMBERLEY
The combined West and East
Kimberley Projects are targeting
Nova-style nickel-copper-cobalt
sulphide mineralisation in the
Wunaamin-Miliwundi Ranges
(previously named King Leopold)
and Halls Creek Orogens, with a
total project area of 13,250km2
held variously in joint ventures
or IGO 100%.
These terrains host the Savannah
Nickel Project owned by Panoramic
Resources Ltd, as well as the Merlin
nickel-copper-cobalt discovery
made by our joint venture partner
Buxton Resources Limited.
Work during FY20 included airborne
magnetic and radiometric surveys,
and negotiations with Traditional
Owners. COVID-19 related travel
restrictions impacted work programs
later in the year, however these are
ready to commence as soon as it is
safe to do so.
LAKE MACKAY
Lake Mackay is a joint venture
between IGO, Prodigy Gold NL and
Castile Resources Pty Ltd (in parts)
with IGO having earned up to a 70%
interest over a total of 15,630km2 of
tenements straddling the Northern
Territory and Western Australian
border.
Work programs during FY20
included ground MLEM, RC drilling
and soil sampling programs, all
of which confirmed the strong
prospectivity of this region.
During FY20, drill testing confirmed
the Arcee Gold Prospect, with
mineralisation confirmed over
approximately 600m of strike
by strong RC drill results which
included 12m @ 3.5g/t Au from
112m, including 8m @ 4.94g/t Au
from 116m2.
At the Phreaker Prospect, a
copper-gold zone was identified in
RC drilling over 750m of strike, with
this prospect to be diamond drill
tested during FY21.
Rock samples from the Grimlock
Prospect were subjected to
metallurgical test work to
understand the leachabilty of
metals from highly cobalt-nickel-
manganese enriched duricrust.
These tests showed encouraging
initial results, with atmospheric
leaching delivering extraction
results of 97.6% for cobalt, 85.2% for
nickel and 99.2% for manganese3.
2 ASX Release – PRX: Lake Mackay JV Update – New Gold Prospect Identified, dated 16 October 2019
3 ASX Release – PRX: Lake Mackay JV – 97% Co & Mn recovered in Leach Extraction, dated 12 December 2019
INNOVATION IN
EXPLORATION
IGO invests in exploration research
and development (R&D) programs
across three key areas:
• Seismic interpretation and drill
core analysis
• Electromagnetic (EM) geophysical
technologies; and
• Resistate indicator minerals for
exploration.
The R&D is conducted internally and
externally through collaborations
with private sector SME’s,
universities, CSIRO, AMIRA and
MRIWA programs.
Traditionally IGO has developed its
own EM transmitters, and in the past
12 months has begun the design
process for the next generation
system. Coupled with ultra-low noise
EM receivers using cryogenically
cooled superconductors,
affectionately known as a SQUID
(superconducting quantum
interference device), the goal was to
increase the power of these systems
to explore to greater depths.
In particular, the new transmitter
will allow surveys to be completed
with much smaller transmitter
loops which would double survey
efficiency without compromising
investigation depth. Synthetic
modelling simulations also
demonstrated a smaller loop can
better discriminate a massive
nickel sulphide target underneath
conductive cover, which is prevalent
across the Australian landscape.
Bench-testing the next generation
EM transmitter literally starts on a
bench in a lab.
Complementary to our internal
research, IGO has sponsored two
geophysical Honours projects at
Curtin University in the past 18
months. One project compared a
range of commercial EM sensors
over some active exploration
tenure and provided an opportunity
for the student to gain industry
experience. The current project
is trialling a new portable EM
system (Loupe) that will be applied
underground at Nova to measure
the conductivity along ore drives,
to ascertain if it can discriminate
ore grade zones, and hence detect
hidden zones of mineralisation
beyond the drive walls.
Bench-testing the next generation
EM transmitter literally starts on a
bench in a lab.
These two projects were cultivated
from students undertaking
vocational work at IGO over
the summer period, and then
undertaking employment in the
2020 IGO graduate intake.
Trials of the Loupe EM system at Coogee
Beach as part of a Curtin Honours Project.
26 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 27
Mineral Resources
& 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 of Exploration Results,
Mineral Resources and Ore Reserves – the JORC Code. IGO
last reported its annual Mineral Resource and Ore Reserve
estimates to the ASX on an end of calendar year 2019 (CY19)
and the estimates will be next updated and reported at the
end of CY20.
At the end of CY19, IGO reported Mineral Resources and Ore
Reserves from IGO’s 100%-owned Nova Operation base metal
(nickel-copper-cobalt) mine, and IGO’s 30% interest in the
Tropicana Gold Mine (TGM). The complete JORC Code reports
relating to the CY19 estimates, including JORC Code Table 1
checklists, 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 CY19 Mineral Resource
and Ore Reserve Statement dated 30 January 2020. Listings of
the respective estimates for the end of CY18 and end of CY19
are tabulated below for IGO’s total interests in Nova and TGM
operations. The JORC Code Competent Persons Statement for
IGO’s end of CY19 estimates are included on page 31 of this
Annual Report.
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; and
• 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 — 31 December 2018 and 31 December 2019
IGO TOTAL — MINERAL RESOURCES
Calendar
Year Ending
Mining Operation
2018
2019
Nova Operation (100%)
Tropicana Gold Mine (30%)
Nova Operation (100%)
Tropicana Gold Mine (30%)
Total
Total
CY19/CY18
Nova Operation (100%)
Tropicana Gold Mine (30%)
CY19/CY18
Mass
(Mt)
13.2
40.9
54.1
11.6
38.6
50.2
88%
94%
93%
Grades estimates
Co
(%)
0.07
-
Cu
(%)
0.8
-
Grades are not additive
0.8
-
0.07
-
Ni
(%)
2.0
-
2.0
-
Grades are not additive
101%
-
100%
-
100%
-
Grades are not additive
TABLE 2 — 31 December 2018 and 31 December 2019
IGO TOTAL — ORE RESERVES
Calendar
Year Ending
Mining Operation
2018
2019
Nova Operation (100%)
Tropicana Gold Mine (30%)
Nova Operation (100%)
Tropicana Gold Mine (30%)
Total
Total
CY19/CY18
(relative)
Nova Operation (100%)
Tropicana Gold Mine (30%)
CY19/CY18
Mass
(Mt)
11.5
19.7
31.1
9.5
16.9
26.4
83%
86%
85%
Ni
(%)
1.90
-
1.85
-
97%
-
Grades estimates
Co
(%)
0.06
-
Cu
(%)
0.76
-
Grades are not additive
0.78
-
0.07
-
Grades are not additive
103%
-
117%
-
Grades are not additive
Au
(g/t)
-
1.76
-
1.70
-
97%
Au
(g/t)
-
1.77
-
1.67
-
94%
In situ metal estimates
Cu
(kt)
107
-
107
94
-
94
88%
-
88%
Co
(kt)
9
-
9
8
-
8
89%
-
89%
In situ metal estimates
Cu
(kt)
87
-
87
74
-
74
85%
-
85%
Co
(kt)
7
-
7
6
-
6
86%
-
86%
Ni
(kt)
270
-
270
234
-
234
87%
-
87%
Ni
(kt)
219
-
219
177
-
177
81%
-
81%
Au
(koz)
-
2,310
2,310
-
2,106
2,106
-
91%
91%
Au
(koz)
-
1,122
1,122
-
909
909
-
81%
81%
NOVA OPERATION
TABLE 3 — 31 December 2018 and 31 December 2019
NOVA OPERATION — MINERAL RESOURCES
2018
Source
JORC Code Class
Underground
Stockpiles
Total
Measured
Indicated
Inferred
Subtotal
Measured
Measured
Indicated
Inferred
Total
Mass
(Mt)
12.5
0.6
<0.1
13.2
0.1
12.6
0.6
<0.1
13.2
Nickel
Copper
Cobalt
(%)
2.10
1.00
1.90
2.00
2.10
2.10
1.00
1.90
2.00
(kt)
261
6
1
268
1
263
6
1
270
(%)
0.80
0.40
0.70
0.80
0.90
0.80
0.40
0.70
0.80
(kt)
104
2
<1
106
1
104
2
<1
107
(%)
0.07
0.04
0.06
0.07
0.08
0.07
0.04
0.06
0.07
(kt)
9
<1
<1
9
<1
9
<1
<1
9
Mass
(Mt)
10.9
0.6
<0.1
11.5
0.1
11.0
0.6
<0.1
11.6
2019
Nickel
Copper
Cobalt
(%)
2.07
0.96
1.90
2.00
1.88
2.07
0.96
1.90
2.00
(kt)
226
6
1
232
1
227
6
1
234
(%)
0.83
0.44
0.70
0.80
0.80
0.83
0.44
0.70
0.80
(kt)
90
3
<1
93
1
91
3
<1
94
(%)
0.07
0.04
0.06
0.07
0.06
0.07
0.04
0.06
0.07
(kt)
7
<1
<1
8
<1
8
<1
<1
8
28 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 29
NOVA OPERATION CONT.
TABLE 4 — 31 December 2018 and 31 December 2019
Source
JORC Code Class
Underground
Stockpiles
Total
Proved
Probable
Proved
Proved
Probable
Subtotal
Total
NOVA OPERATION — ORE RESERVES
2018
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
<1
7
<1
7
<1
7
Mass
(Mt)
9.2
0.2
9.5
0.1
9.3
0.2
9.5
2019
Nickel
Copper
Cobalt
(%)
1.86
1.49
1.85
1.88
1.86
1.49
1.85
(kt)
172
3
176
1
174
3
177
(%)
0.78
0.58
0.78
0.79
0.78
0.58
0.78
(kt)
72
1
74
1
73
1
74
(%)
0.07
0.05
0.07
0.06
0.07
0.05
0.07
(kt)
6
<1
6
<1
7
<1
6
TROPICANA GOLD MINE
TABLE 5 — 31 December 2018 and 31 December 2019
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)
6.5
75.5
5.6
87.6
-
8.5
12.4
20.8
27.8
34.3
84.0
17.9
136.2
2018
(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
Gold
(koz)
270
3,640
240
4,140
-
1,120
1,730
2,850
700
970
4,760
1,970
7,700
Subtotal
Subtotal
Total
TABLE 6 — 31 December 2018 and 31 December 2019
TROPICANA GOLD MINE — 100% ORE RESERVES
Estimate
JORC Code Class
Open pit
Underground
Stockpiles
Total
Proved
Probable
Proved
Probable
Proved
Proved
Probable
Mass
(Mt)
4.2
43.2
47.4
-
2.7
2.7
15.5
19.8
45.9
65.7
2018
(g/t)
1.68
1.94
1.91
-
3.65
3.65
1.01
1.15
2.04
1.77
Gold
(koz)
230
2,690
2,920
-
320
320
500
730
3,010
3,740
Subtotal
Subtotal
Total
Mass
(Mt)
2.4
53.3
3.3
59.0
-
11.4
19.1
30.5
39.0
41.4
64.7
22.4
128.5
Mass
(Mt)
1.5
30.1
31.6
-
2.7
2.7
22.0
23.5
32.8
56.3
2019
(g/t)
1.68
1.57
1.23
1.56
-
3.08
3.24
3.18
0.76
0.81
1.84
2.95
1.70
2019
(g/t)
2.28
2.00
2.02
-
3.60
3.60
0.94
1.03
2.13
1.67
Gold
(koz)
130
2,690
130
2,950
-
1,130
1,990
3,120
950
1,080
3,820
2,120
7,020
(koz)
110
1,940
2,050
-
310
310
670
780
2,250
3,030
Gold
Competent Persons
Statement
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 7 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 30 January 2020 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 conflict of
interest in this public report to the ASX.
TABLE 7 — 31 December 2019
IGO COMPETENT PERSONS FOR 31 DECEMBER 2019 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
Paul Hetherington
MAusIMM
209805
General Manager Exploration
IGO Perth
Manager Mine Geology
TGM AngloGold Ashanti Australia
Geology Superintendent
IGO Nova Operation
IGO greenfield results
TGM results
Nova Operation estimate
Damon Elder
MAusIMM
208240
Manager Mine Geology
TGM AngloGold Ashanti Australia
TGM estimates
Ore Reserves
Gregory Laing
MAusIMM
206228
Joanne Endersbee MAusIMM/CP
334537
CY19 Report
Mark Murphy
MAIG/RPGeo
2157
Superintendent Planning
IGO Nova Operation
Manager Integrated Planning
TGM AngloGold Ashanti Australia
Resource Geology Manager
IGO Perth
Nova Operation estimate
TGM estimates
IGO Annual Report
Notes:
1 MAusIMM = Member of Australasian Institute of Mining and Metallurgy, MAusIMM/CP = MAusIMM and Chartered Professional MAIG/RPGeo = Member of Australian
Institute of Geoscientists and Registered Professional Geoscientist.
2 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.
3 All IGO personnel are full-time employees of IGO; all AGAA personnel are full-time employees of AGAA.
4 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.
5 Each Competent Person listed above has provided to IGO by email:
• 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; and
• Confirmation that there are no issues that could be perceived by investors as a material conflict of interest in preparing the reported information.
30 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 31
Making a
Difference
AT A GLANCE
$603k
26% FY19
Invested in Corporate Giving.
431hours
431 hours volunteered by IGO
employees in the Company’s
inaugural year of its Volunteer
Day Program.
$5,976
Raised for the National Breast
Cancer Foundation through the
sale of co-branded shirts.
$57,000
143% FY19
Raised by IGO employees for
Ronald McDonald House taking
part in the Up All Night event.
32 — IGO ANNUAL REPORT 2020
Making a Difference is our reason for being, our purpose.
Every single person in our business has made a difference
this year.
IGO has a committed Corporate
Giving philosophy that enables
us to live our purpose of Making
a Difference. We provide
targeted assistance to a range
of community-based programs
with an emphasis on education
and helping Indigenous and non-
Indigenous groups across urban,
regional and disadvantaged
communities. 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 which can be
found in the Caring section of IGO’s
website at www.igo.com.au/site/
caring/community. IGO’s Corporate
Giving budget is based on a
percentage of IGO’s Group revenue.
In FY20 this percentage increased
to 0.075% of total revenue (FY19:
0.06%). The Standard also defines
target beneficiaries, being primarily
charities and schools in our host
communities.
In FY20, IGO’s Corporate Giving
program made a difference to over
50 organisations and programs,
with total payments of $603,035. 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 were 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
FY20 are outlined below.
CORE LEARNING
FOUNDATION
Central to IGO’s purpose for
Corporate Giving is to improve the
education of children and support
promotion of STEM/mining related
education. CoRE is a secondary
school specialist program based
on STEM principles, originally
developed at Kent Street Senior
High School for Year 7 and Year
10 students. Following CoRE’s
Goldfields Women in STEM Tour in
July 2019, of which IGO was a major
sponsor, IGO was proud to further
support the Foundation by investing
$75,000 over three years to fund
the implementation of the CoRE
Learning Model into Norseman
District High School and Coolgardie
Primary School and ensure
continued success of the program.
ROYAL FLYING DOCTOR
SERVICE WA
In November 2019, IGO employees
including a number of the
exploration team visited the
Royal Flying Doctors Service
(RFDS) in Jandakot to gain a first-
hand experience of the critical
services RFDS provide to those
who live, work and travel across
Western Australia, including IGO’s
operational and exploration teams.
IGO was proud to partner with
the RFDS and become a Platinum
Partner for the Altitude Ball for
CASE STUDY:
EARBUS FOUNDATION WA
IGO have been proud supporters of
the incredible work of the Earbus
Foundation for over two years.
Earbus Foundation is a WA-based
children's charity that works to
reduce the impact of middle ear
disease in Aboriginal and at-risk
children so they can reach their full
potential through communication
and learning. Earbus works hard
to identify children who need care
and to help them get well. Their
mobile ear health clinics provide
comprehensive ear screening,
surveillance and treatment
by utilising the skills of GP’s,
Audiologists, Nurses and ENT’s
who visit communities regularly
and consistently. A typical visit
would see the Earbus team consult
with over 30 children in one day.
In the last quarter of FY20, 17%
of the children screened had
never been screened before, and
they are aiming to increase their
engagement with children under
four years of age in the regions
they visit.
Last year, IGO helped Earbus
deliver four visits to the Esperance
and Norseman region, where we
saw first-hand the valuable work
they do and how critical it is for
remote communities. Following
the success of these trips, IGO
agreed to support Earbus for the
next three years with a funding
commitment of $225,000 over
the period. This will enable the
Foundation to increase the number
of visits to the Esperance and
Norseman region to reach more
children.
Earbus Chief Executive Officer,
Paul Higginbotham, said “Earbus
Foundation is so grateful to
IGO Limited for their ongoing
commitment. There are hundreds
of Aboriginal kids in the
Esperance-Norseman region who
will benefit from having their ears
checked regularly so they can learn
well and stay in school.”
Dr Harvey Coaks video Otoscopy.
IGO ANNUAL REPORT 2020 — 33
the next three years, with a total
commitment of $75,000 per annum.
Unfortunately, due to COVID-19
the Ball was cancelled for 2020,
however IGO was pleased to be
able to reallocate the funding to
the Response Ready for WA Appeal
that the RFDS launched to support
their COVID-19 response. Since the
outbreak, RFDS Chief Executive
Rebecca Tomkinson reported the
RFDS transported more than 100
suspected COVID-19 patients and
are currently the only service still
operating aeromedical retrieval for
suspected COVID-19 patients in
Western Australia.
CANNERY ARTS CENTRE
The Cannery Arts Centre is a not-
for-profit community arts centre
in Esperance that runs KICKARTS,
which is a school holiday program
for children between the ages of 6
and 17. These programs increase
children’s exposure to the arts and
this participation in cultural activities
is shown to improve mental health
and general wellbeing. Following
the success of the program in 2019,
IGO has continued to support all
four upcoming programs in 2020
and 2021.
MADALAH
Madalah offers scholarships
for Indigenous students from
remote and regional communities
to Western Australia’s leading
boarding schools and universities.
IGO has been supporting Madalah
for over four years and has been
the major sponsor of the Madalah
Ball for the last two, and again
pledged $20,000 to be a Corporate
Partner of the Ball this year. As
a consequence of COVID-19,
Madalah had to cancel the Ball in
2020. Although the Ball did not go
ahead, IGO recognised this funding
was more crucial than ever and
redirected the funding to be used
for the continued support of their
existing students which enabled
Madalah to offer an additional
eight scholarship opportunities in
2020 for Secondary and Tertiary
education.
ESPERANCE GIRLS
ACADEMY
The Girls Academy program at
Esperance Senior High School
helps provide Aboriginal and
Torres Strait Islander girls with
the necessary tools to engage in
their education and achieve their
goals. IGO continued its support
for the program during the year
and also supported students from
St Catherine’s College Dandjoo
Darbalung Program (that IGO also
supports), to visit Esperance Senior
High School to share their stories
about university with the students.
CLONTARF – ESPERANCE
AND KALGOORLIE
During the year, IGO entered into
a three year agreement with the
Clontarf Foundation, providing total
funding of $75,000 over the period
to support Clontarf’s Esperance
and Kalgoorlie career programs for
young Aboriginal and Torres Strait
Islander men. Clontarf has a proven
positive impact on improving the
education, self-esteem, life skills
and employment prospects for
participants.
COMMUNITY SUPPORT
In addition to the organisations
that IGO supported during the
year, IGO pledged an additional
$250,000 Community Fund to
be distributed to Norseman and
Esperance communities to assist
with their COVID-19 and bushfire
recovery plans.
Sustainability
AT A GLANCE
$3.7M
11% FY19
Production royalty payments
from Nova made to the
Ngadju Native Title Aboriginal
Corporation (NNTAC).
$36.4M
23% FY19
Total payments made to
government entities in royalties
and taxes.
122ha
Of land cleared, 577 hectares
of completed rehabilitation.
ENVIRONMENT
IGO completed a large-
scale Environmental Impact
Assessment (EIA) across all our
exploration activities within the
Fraser Range Project.
34 — IGO ANNUAL REPORT 2020
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
Sustainability is central to
IGO’s purpose. We believe in a
green energy future and, as a
strategic imperative, endeavour
to be Proactively Green. We
do this both in the choice of
commodities we seek to develop
and how their development is
pursued. Exploration, mining and
downstream processing all require
access to land, a community
licence to operate, energy and
other physical inputs, and the drive
and inspiration of our people. It
is our choices in how we do these
things and the resources that are
applied that lies at the heart of our
Proactively Green philosophy.
We believe our approach both
serves the aspirations of our
people, our investors and the
communities in which we operate.
Our management of environmental,
social and governance issues is
increasingly scrutinised by ratings
agencies as part of their index
scoring evaluations.
As a result of our commitment to
sustainability, IGO was proud to
have been admitted to the Dow
Jones Sustainability Index Australia
during September 2019. This is
an important recognition of our
performance in this area and places
IGO in the top 30% of companies in
the S&P/ASX 200 Index.
OUR COMMUNITIES
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 social licence, to be
a valued corporate citizen, and to
understand the matters that are
material to our stakeholders.
FY20 has been a very challenging
year for many of our host
communities and the world at large.
In the early part of calendar year
2020 we saw Australia ravaged
by bushfires that will have lasting
social and economic impacts.
In the region around our Nova
Operation, large areas of the Great
Western Woodland were burnt.
These fires caused significant
economic hardship for pastoralists,
Traditional Owners and residents
of the towns within the impacted
Shires of Dundas and Esperance.
In response, IGO directly engaged
the community to explore how we
might assist recovery efforts. This
resulted in IGO making financial
contributions to a range of projects
in the region and reaffirms our
desire to Making a Difference.
In the immediate aftermath of the
fires, IGO, our host communities
and the world were caught in the
growing COVID-19 pandemic.
Whilst at the time of writing, the
disease has had a limited impact on
the health of our people and host
communities, for some the social
and financial impact has been
significant. IGO re-engaged the
community regarding what potential
actions we could take to help and
this took the form of financial and
material assistance to support
local services as well as adjusting
our work plan schedules and travel
arrangements to help limit the
exposure of host communities to
the virus, with particular attention
to Aboriginal communities who have
CASE STUDY:
PROACTIVELY GREEN
IGO seeks to be Proactively
Green through adherence to
our internal IGO Environmental
Standards, standards that set
performance benchmarks beyond
simple compliance with the law.
IGO Environmental Standards are
available on our website (https://
www.igo.com.au/site/caring/
environment).
One of IGO’s Environmental
Standards specifies the need
for proactive socio-economic
impact assessment. In FY19, IGO
completed an Environmental
Impact Assessment of our
exploration activities within the
Fraser Range using the services of
an expert independent consultant.
The assessment considered the
many different land systems within
the 14,000km2 of exploration leases
that IGO holds in the region. The
assessment considered a wide
range of activities, impacts and
mitigation measures. In FY20,
IGO worked to operationalise the
outputs of the assessment through
new and updated field procedures
and management plans. As a result,
IGO is increasingly able to minimise
or mitigate the impacts associated
with our exploration activities.
In FY21, we will revisit the IGO
Environmental Standards to
ensure that they continue to reflect
Our Purpose and our strategic
imperative to be Proactively Green.
Safescape Bortana BELV (battery electric
light vehicle).
IGO ANNUAL REPORT 2020 — 35
recognised medical predispositions
that increase their vulnerability to
COVID-19.
ENVIRONMENTAL
MANAGEMENT
IGO’s environmental impacts
are relatively minor, however, we
have an ongoing commitment to
making a real but proportionate
contribution to addressing
the world’s most pressing
environmental challenges: global
warming, biodiversity loss,
deforestation, water consumption,
pollution, soil loss or degradation
and waste management.
Currently IGO’s single largest
environmental impact is land
clearing. IGO, like other explorers,
need to physically access 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 removed.
To minimise and manage the impact
of our activities, we proactively
complete environmental and social
impact assessments. We then
actively plan 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 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.
In FY20, IGO cleared approximately
122 hectares of land and completed
rehabilitation of 577 hectares of land.
CLIMATE CHANGE
During FY20, IGO has acted to
further meet the recommendations
of the Taskforce on Climate-related
Financial Disclosures (TCFD). We
collaborated with external experts
to build on our existing climate
change risk and opportunity
identification and management
processes, including application
of scenario-based analysis. The
intent of this work was to broaden
the range of impacts considered,
stress test current business and
financial strategies, and improve
our resilience using the resulting
outcomes. IGO will publish an
enhanced Climate-related Financial
Disclosure in our 2020 Sustainability
Report.
PROACTIVELY GREEN
As part of our strategy to be
Proactively Green, IGO has
continued to seek ways in which
to minimise our impact on the
environment. Some examples of this
work includes:
• In partnership with Zenith Energy,
the completion of the Nova
5.5MW solar farm, with first power
delivered during December 2019
• In collaboration with Barminco
the trial of electric underground
vehicles at Nova; and
• A workforce led I-GO Green
Waste Reduction Initiative
recycling over 46 tonnes of waste
destined for landfill at Nova in
the first six months.
Further details on our Proactively
Green strategy can be found in our
2020 Sustainability Report to be
released in September 2020.
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.
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.
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.
Some of its key functions are setting the long-term corporate
strategy, reviewing and approving business plans and annual
budgets, overseeing the risk management framework that
includes both financial and non-financial risks, 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.
Further details can be found in the Board Charter that can be
found in the Governance section of the IGO website.
BOARD COMMITTEES
To assist the Board to discharge its responsibilities, the Board
has established the following Committees:
• Audit
• Nomination & Governance
• People & Performance
• Sustainability & Risk
Each Committee works within a Charter approved by
the Board, which sets out the roles and responsibilities,
composition, structure and membership requirements for
the Committee.
Details of relevant qualifications and experience for all
Committee members can be found on pages 40 and 41 of this
Annual Report.
Further information about the Committees can be found in
the 2020 Corporate Governance Statement.
Further information about governance at IGO as well as
copies of the Board and Committee Charters can be found in
the Governance section of IGO’s website at https://www.igo.
com.au/site/our-business/governance.
STAKEHOLDERS
BOARD
AUDIT COMMITTEE
NOMINATION & GOVERNANCE
COMMITTEE
PEOPLE & PERFORMANCE
COMMITTEE
SUSTAINABILITY & RISK
COMMITTEE
CHIEF EXECUTIVE OFFICER
EXECUTIVE LEADERSHIP TEAM
Purpose and
Values
Code of Conduct
Group Policies
Common Management System Standards
Function Standards
Sustainability
Human Resources
Financial
IT
Governance
New Business
MEMBERSHIP
ROLE
KEY ACTIVITIES UNDERTAKEN DURING THE YEAR
AUDIT COMMITTEE
Ms Debra Bakker (Chair)
Mr Peter Bilbe
Ms Kathleen Bozanic
To monitor and review
the effectiveness of the
control environment
of IGO in the areas of
balance sheet risk,
relevant legal and
regulatory compliance
and financial reporting.
• Monitoring relevant changes in legislation and corporate
governance in relation to financial reporting
• Reviewing key accounting policies and practices
• Overseeing adequacy of the Group’s financial controls
• Reviewing and making recommendations to the Board on the half-
year and annual financial statements
• Reviewing and approving the quarterly activity reports
• Approving external audit plan and fees
• Reviewing independence and performance of external auditor
• Monitoring and reporting to the Board any material reports received
under the Whistleblower and Anti-Bribery and Corruption Standards.
NOMINATION & GOVERNANCE COMMITTEE
Mr Peter Bilbe (Chair)
Ms Kathleen Bozanic
Mr Neil Warburton
To assist the Board
to review Board
composition (including
identifying candidates
for the Board), director
independence,
succession,
performance and
relevant policies and
practices.
• Monitoring relevant changes in legislation and corporate
governance
• Reviewing Corporate Governance Standards
• Reviewing and making recommendations to the Board on the
composition of the Board
• Identified, evaluated and recommended additional non-executive
director to the Board
• Reviewing and making recommendations to the Board on director
rotation
• Reviewing director skills matrix and conducting gap analysis
• Approving three-year Board Evaluation process
• Board succession planning.
PEOPLE & PERFORMANCE COMMITTEE
Mr Keith Spence (Chair)
Ms Debra Bakker
Mr Peter Bilbe
Mr Peter Buck
To assist the Board
in establishing IGO’s
remuneration framework
and relevant policies
and practices to attract,
retain and motivate
employees.
• Monitoring relevant changes in legislation and corporate
governance in relation to employment and remuneration
• Reviewing IGO’s remuneration policies and practices
• Reviewing strategies to recruit, retain and motivate employees
• Reviewing and monitoring culturing program and Employee
Engagement Survey results
SUSTAINABILITY & RISK COMMITTEE
Mr Peter Buck (Chair)
Ms Debra Bakker
Mr Keith Spence
Mr Neil Warburton
To assist the Board in
meeting its oversight
responsibilities
in relation to the
Company’s Risk
Management System
and sustainability
policies and practices.
• Monitoring learning and development program
• Reviewing and monitoring progress against measurable objectives
in respect of diversity and inclusion
• Reviewing and making recommendations to the Board on:
– Non-executive director, CEO and KMP remuneration
– Employee share plans; and
–
the Remuneration Report.
• Monitoring relevant changes in legislation and corporate
governance in relation to risk reporting and sustainability
• Quarterly reviews of the Group’s Critical Business Risks
• Reviewing the Company’s Risk Management Framework
• Reviewing the Company’s insurance and maintaining oversight of
the Company’s insurance activities
• Reviewing internal audits and approval of Internal Audit Plan
• Assessing processes to ensure compliance with legal and regulatory
requirements
• Reviewing the Company’s environmental, health and safety
performance as well as community relations
• Consideration of heritage and land access matters affecting the
Company
• Consideration of climate change risk and opportunities relevant to
IGO
• Reviewing and recommending to the Board on the Company’s
Sustainability Report.
36 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 37
2020 CORPORATE GOVERNANCE
STATEMENT
The Company’s 2020 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 4th Edition of its
Corporate Governance Principles and Recommendations
(ASX Recommendations). During FY20, the Company’s
corporate governance practices complied with all
relevant ASX Recommendations.
The Corporate Governance Statement is current as at
27 August 2020 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
and the 2020 Annual Report.
BOARD SKILLS & EXPERIENCE
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 2020 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.
As part of the FY20 review the skills and experience
of the Executive Leadership Team (ELT) were also
assessed against the same categories to ensure the
Board skills are complemented by the ELT skills.
To the extent that any skills are not strongly represented
on the Board, they are augmented through management
and external advisors.
STRATEGY
Demonstrated ability to envision a desired
outcome and to develop, contextualise and
keep alive strategic plans to deliver the
desired outcome
EXECUTIVE LEADERSHIP
Effective leadership delivering business
success through engagement, enablement
and organisational design and change
STEM
Demonstrated experience in the fields of
science, technology, engineering or maths
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
DOWNSTREAM PROCESSING
AND MARKETS
Knowledge of chemical processing operations
and production, quality control and marketing
for specialty chemicals
AUDITING AND/OR
FINANCIAL REPORTING
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
Commitment to high standards of governance,
including experience with a large business
enterprise which is subject to rigorous
governance standards
ORGANISATIONAL CULTURE
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
PEOPLE WELLBEING, INCLUSION
AND DIVERSITY
Demonstrated experience in development
and implementation of programs of work to
foster inclusion and diversity and/or physical,
emotional and financial wellbeing
HEALTH AND SAFETY
Senior management experience in workplace
health, wellbeing and safety
INNOVATION AND/OR STRATEGIC
ENTREPRENEURSHIP
Experience in unlocking transformational
value through innovation to change the way
things are done or what is produced
GLOBAL AND/OR INTERNATIONAL
Experience in a global organisation or
working in a non-Australian jurisdiction
with international assets, business partners,
cultures and communities
M&A AND/OR FUNDING
Experience managing, directing or advising
on mergers, acquisitions, divestments,
portfolio optimisations and delivering funding
solutions
CAPITAL PROJECTS
Experience with projects with large capital
outlays and longer term investment horizons,
in both the planning and execution phases
TECHNOLOGY, DIGITAL
TRANSFORMATION AND/OR
CYBER SECURITY
Experience with new and emerging
technology and insights from industries that
have been through significant technology/
digital disruption or transformation
ENVIRONMENTAL SUSTAINABILITY
AND/OR CLIMATE CHANGE
Understanding of:
• matters related to land access (social
licence to operate)
• key matters of public concern (e.g.
changing societal demands related climate
change, the decarbonisation of industry
and TSF management)
• the industry’s key role in land management,
particularly in Australia, and the
associated obligations related biodiversity
conservation
STAKEHOLDER RELATIONS
AND/OR ACTIVISM
Experience in socially responsible
development and operation and with
engaging, influencing and building positive
relationships with stakeholders
LEGAL
Broad skills and experience across legal
functions, including corporate M&A and
mining law
REGULATORY AND PUBLIC POLICY
Experience in diverse political, cultural,
regulatory and business environments and
in influencing public policy decisions and
outcomes
LEGEND
High
Moderate
This Board Skills Matrix shows the percentage
of Directors on the Board who have a high
level of skill in the area of competence taking
into consideration the many years of direct
experience each Director may have.
38 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 39
Board
Profile
PETER
BILBE
PETER
BRADFORD
DEBRA
BAKKER
NON-EXECUTIVE
CHAIRMAN
MANAGING DIRECTOR &
CHIEF EXECUTIVE OFFICER
NON-EXECUTIVE DIRECTOR
Age 70
B.Eng. (Mining) (Hons), MAusIMM
Age 62
BAppSc (Extractive Metallurgy),
FAusIMM
Age 54
MAppFin., BBus. (Accounting & Finance),
GradDip FINSIA, GAICD
KATHLEEN
BOZANIC
PETER
BUCK
KEITH
SPENCE
NEIL
WARBURTON
NON-EXECUTIVE DIRECTOR
NON-EXECUTIVE DIRECTOR
NON-EXECUTIVE DIRECTOR
NON-EXECUTIVE DIRECTOR
Age 46
BCom (Accounting & Finance),
ANZCA, GAICD
Age 71
M.Sc. (Geology), MAusIMM
Age 66
BSc. (Geophysics) (Hons)
Age 64
Assoc. MinEng WASM, MAusIMM,
FAICD
TERM OF OFFICE
TERM OF OFFICE
TERM OF OFFICE
TERM OF OFFICE
TERM OF OFFICE
TERM OF OFFICE
TERM OF OFFICE
Mr. Bradford was appointed as
Managing Director and Chief
Executive Officer in March 2014.
Ms. Bakker was appointed
as a Non-executive Director in
December 2016.
Mr. Bilbe was appointed as
a Non-executive Director in
March 2009 and Non-executive
Chairman in July 2011.
BOARD COMMITTEES
Audit
Nomination & Governance (Chair)
People & Performance
EXPERIENCE
Mr. Bilbe is a mining engineer
with 45 years’ experience in
the mining industry. Mr Bilbe
has held various executive
management and board
positions. Mr. Bilbe has a diverse
breadth of experience in the
mining industry in Australia and
overseas with a background
in gold, base metals and iron
ore. In particular, Mr. Bilbe
has significant experience in
feasibility studies and project
development, open pit and
underground mining and
processing operations, provision
of contract mining services and
public company stewardship as
Director and Chairman.
EXPERIENCE
Mr. Bradford is a senior
executive and a metallurgist
with over 40 years' experience
in senior leadership roles
in the mining industry. This
includes significant operational,
corporate and board experience
in Australia and overseas in
nickel, copper and gold.
Mr. Bradford is a strong
advocate of the mining industry
as well as the need to promote
greater diversity and inclusion,
and the next generation of
mining leaders.
Mr. Bradford is President of
the Association of Mining
and Exploration Companies
Inc (AMEC) and Chairman of
the Curtin University Brighter
Futures Scholarship Program.
OTHER CURRENT
DIRECTORSHIPS
None.
OTHER CURRENT
DIRECTORSHIPS
FORMER DIRECTORSHIPS
IN THE LAST 3 YEARS
Non-executive Director of
Adriatic Metals Plc and Horizon
Minerals Limited.
None.
FORMER DIRECTORSHIPS
IN THE LAST 3 YEARS
None.
BOARD COMMITTEES
Audit (Chair)
People & Performance
Sustainability & Risk
EXPERIENCE
Ms. Bakker is an experienced
financier and investment banker
to the resources industry, with
10 years experience working in
London, Chicago and New York
in senior roles with Barclays
Capital and Standard Bank
London Group. Subsequently,
Ms. Bakker established the
natural resources team for
Commonwealth Bank of
Australia and held a number
of senior roles over a 10-year
period culminating as Head of
Mining and Metals Origination.
OTHER CURRENT
DIRECTORSHIPS
None.
FORMER DIRECTORSHIPS
IN THE LAST 3 YEARS
Non-executive Director –
Azumah Resources Ltd and
Capricorn Metals Ltd.
It is with great respect and gratitude that we thank Geoffrey Clifford who retired from the IGO
Board in FY20, after serving for the past seven years. His contributions have been invaluable in
helping shape IGO into the successful Company we are today.
We are also pleased to welcome Kathleen Bozanic to the IGO Board as an independent Non-
executive Director. Kathleen brings an impressive range of skills and capabilities, including
strong financial, accounting and commercial experience. We are very much looking forward to the
contribution that Kathleen’s varied experience will make to our Board.
Ms. Bozanic was appointed as
a Non-executive Director in
October 2019.
Mr. Buck was appointed
as a Non-executive Director
in October 2014.
Mr. Spence was appointed
as a Non-executive Director
in December 2014.
Mr. Warburton was appointed
as a Non-executive Director in
October 2015.
BOARD COMMITTEES
BOARD COMMITTEES
BOARD COMMITTEES
BOARD COMMITTEES
Audit
Nomination & Governance
People & Performance
Sustainability & Risk (Chair)
People & Performance (Chair)
Sustainability & Risk
Nomination & Governance
Sustainability & Risk
EXPERIENCE
EXPERIENCE
EXPERIENCE
EXPERIENCE
Ms. Bozanic has over 25 years
of experience as a finance
professional including as Chief
Financial Officer/General
Manager of listed and private
mining and contracting
companies.
Ms. Bozanic has previously
held senior positions with BGC
Contracting, Atlas Iron and
Mt Gibson and was a Partner
of professional services firm,
Deloitte.
OTHER CURRENT
DIRECTORSHIPS
Non-executive Director – Great
Southern Mining Ltd.
FORMER DIRECTORSHIPS
IN THE LAST 3 YEARS
None.
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.
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
Non-executive Chairman
– Santos Limited and Base
Resources Limited.
FORMER DIRECTORSHIPS
IN THE LAST 3 YEARS
Geodynamics Limited, Murray &
Roberts Holdings Limited and
Oil Search Limited.
Mr. Warburton is a qualified
mining engineer with more than
40 years’ experience in gold and
nickel development and mining.
He was previously the Chief
Executive Officer of Barminco
Limited until March 2012.
Mr. Warburton is also a Member
of the WA School of Mines
Alumni Advisory Council.
Mr. Warburton brings a strong
underground and operational
mining expertise to the
Board and is an associate of
Mark Creasy (IGO's largest
shareholder).
OTHER CURRENT
DIRECTORSHIPS
Non-executive Chairman -
Flinders Mines Limited.
FORMER DIRECTORSHIPS
IN THE LAST 3 YEARS
Australian Mines Limited and
Coolgardie Minerals Ltd.
40 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 41
Directors’
Report
30 JUNE 2020
Your Directors present their report on the consolidated
entity (referred to hereafter as the Group) consisting of IGO
Limited (referred to hereafter as IGO or the Company) and the
entities it controlled at the end of, or during, the year ended
30 June 2020.
DIRECTORS
The following persons held office as Directors of IGO Limited
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
Kathleen Bozanic*
Neil Warburton
* Kathleen Bozanic was appointed a Non-executive Director on
3 October 2019 and continues in office at the date of this report.
** Geoffrey Clifford was a Non-executive Director from the beginning
of the financial year until his retirement on 20 November 2019.
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 2019 of 8.0 cents (2018: 2.0 cents) per
fully paid share
Interim ordinary dividend for the year ended
30 June 2020 of 6.0 cents (2019: 2.0 cents) per
fully paid share
2020
$’000
2019
$’000
47,264
11,809
35,448
11,810
82,712
23,619
In addition to the above dividends, since the end of the
financial year the Company has announced the payment of
an unfranked final ordinary dividend of $29,540,000 (5.0 cents
per fully paid share) to be paid on 25 September 2020.
OPERATING AND FINANCIAL REVIEW
This review should be read in conjunction with the financial
statements and the accompanying notes.
COMPANY OVERVIEW
IGO Limited (‘IGO’ or ‘the Company’) is a leading ASX-listed
mining and exploration company with a strategic focus on
metals that are critical to energy storage and renewable
42 — IGO ANNUAL REPORT 2020
energy. Headquartered in Perth, Western Australia, IGO owns
100% of the Nova nickel-copper-cobalt operation in Western
Australia’s Fraser Range region and 30% of the Tropicana
Gold Mine, a Joint Venture with AngloGold Ashanti Australia
(AGAA) in WA’s goldfields region. IGO has a strong purpose
of Making a Difference and is an active participant in the
local community. The Company is actively pursuing growth
through a combination of exploration – to discover the mines
of the future – and disciplined corporate activity to secure
opportunities via mergers and acquisitions. The Company
listed on the ASX on 17 January 2002, having traded as
Independence Gold NL from 17 January 2002 to
19 December 2003 and subsequently Independence Group NL
from 19 December 2003 until 17 January 2020. On this date,
the Company changed its name to IGO Limited.
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 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/cobalt concentrate, and associated non-processing
infrastructure.
Commercial production was declared at the Nova Operation
on 1 July 2017, and in the subsequent December quarter all
process plate nameplate parameters were demonstrated.
Nova has since demonstrated steady state production
at or above the nameplate 1.5 million tonnes per annum
rate throughout FY20 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 Mine 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 of fresh ore 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 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.
On 1 November 2019, IGO announced the completion of the
Downstream Nickel Sulphate Study (the Study), a prefeasibility
study on the technical and financial merits of converting
nickel sulphide concentrate into high-quality nickel sulphate.
Highlights from the Study included validation of the new and
patented process (The IGO Process™), which demonstrated
extremely high metal recoveries, an environmentally friendly
process and low production costs. While this testwork
provided greater confidence that The IGO Process™ has
the ability to produce battery grade nickel sulphate for the
premium energy storage market, as a parallel workstream
the Company was able to deliver materially improved offtake
contract terms from the high-quality nickel concentrate
produced at Nova Operation. As a result of the improvement
in offtake terms, IGO decided not to progress the Study into
a detailed feasibility study stage and instead maximised
value through entering into traditional concentrate offtake
agreements. IGO remains committed to vertical integration
aligned to the Company’s strategy and is exploring
partnership opportunities both domestically and overseas to
leverage the technology it has developed.
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
• Nova Near-mine (nickel-copper-cobalt) – The exploration
drilling program around the Nova Operation continued to
test targets generated from the high-resolution 3D seismic
survey completed during FY18. Drilling targets included
3D seismic features on the mining lease, interpreted to be
mafic-ultramafic (M-UM) intrusions up to 30km from the
mining lease. Drill targets continue to be generated and
several targets will be tested over the first quarter of FY21.
• Tropicana Operation (gold) – Exploration drilling during
the year focused on resource development drilling at the
Havana pit and the Boston Shaker underground. Regional
exploration drilling of a number of targets was also
progressed.
Greenfields Exploration
• Fraser Range (nickel-copper-cobalt) - The Company
continued to strengthen its position in the prospective
Fraser Range through new joint venture agreements, new
tenement applications and the relinquishment of non-core
tenements, and at year end had total tenement holdings of
approximately 11,960km2.
During the year, aircore (AC) and diamond core drilling
continued to systematically advance exploration targets.
Geophysics and AC drilling crews shifted focus from
systematic regional exploration work punctuated with
targeted diamond drilling programs, to more focused
exploration programs where infill AC drilling and
electromagnetic (EM) surveys are following up coincident
geophysical, geochemical and geological anomalies
identified over the past 18 months, to generate new
diamond drill targets. The EM teams had a particularly
successful last quarter of the year, identifying six new
targets that will be drill tested during FY21.
The Company identified approximately 50 high-priority
AC targets characterised by having the combination
of the right rock types (i.e. similar in appearance and
geochemistry to Nova) and anomalous nickel-copper-
cobalt geochemistry. More than 100 other targets are
characterised by having either the right rock types or
anomalous geochemistry. The Company plans to follow-up
these targets with >100,000m of AC drilling in FY21.
• Kimberley (nickel-copper-cobalt) – The Kimberley Project
is targeting Nova-style nickel-copper-cobalt sulphide
mineralisation in the Paleoproterozoic belts of the West
and East Kimberley. IGO holds tenure and rights to tenure
over 5,166km2 in various joint ventures where IGO can
earn interests ranging from 64% to 85%. IGO also holds
8,081km2 of tenure on a 100% basis for a total project area
of 13,250km2.
Planned exploration in FY20 was impacted by COVID-19,
however as restrictions have eased, airborne geophysical
surveys (magnetics and radiometrics) have recommenced.
Geological, ground geophysical and drilling programs
are planned for FY21, including at the advanced Merlin
Prospect, where previous drilling by Buxton Resources
Limited intersected massive nickel-copper-cobalt sulphide
mineralisation. Approval was also received for EIS funding
for RC drill targets generated in the adjoining Quick Shears
and Fire Ant target areas.
• Lake Mackay (copper-nickel-cobalt, gold) – During the
prior year, IGO completed the initial earn-in expenditure
component under the terms of a Farm-in and Exploration
Joint Venture Agreement to trigger the formation of the
unincorporated Lake Mackay Joint Venture (IGO: Manager,
70% interest). The Lake Mackay Project is 400km northwest
of Alice Springs and comprises approximately 15,630km2 of
tenements prospective for copper, nickel, cobalt and gold.
The 2020 field season and drilling program was postponed
due to COVID-19 restrictions.
IGO ANNUAL REPORT 2020 — 43
DIRECTORS’ REPORT 30 JUNE 2020 • Raptor (nickel-copper-cobalt) – 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 16,979km2 of
tenements.
During the year, aeromagnetic and radiometric data was received from the Northern Territory Geological Survey for the Mt
Peake-Crawford survey, where IGO funded infill lines over priority areas within the eastern tenements. The final co-funded
airborne survey has been postponed due to the COVID-19 travel restrictions.
• Paterson (copper) – The Paterson Project was expanded during the year with the addition of several highly prospective land
packages. On 10 June 2020, an earn-in and Joint Venture Agreement was announced with Metals X Limited, covering 2,394km2
of highly prospective tenements adjoining the Nifty Copper Mine and the Maroochydore copper resource. An additional JV
with Antipa Minerals was completed subsequent to year-end on 9 July 2020 covering 1,593km2. This has now increased the
total project area to 6,844km2.
In March 2020, the Company also elected to exercise its option to enter into an earn-in and Joint Venture Agreement
with Encounter Resources Limited. IGO has a further option to sole-fund A$15 million over seven years to earn a 70%
interest in Encounter’s Yeneena Project tenements. Planning for the 2020 field program was advanced, with fine-fraction
soil sampling, a magneto-telluric survey, an electromagnetic survey and several drilling programs planned. However,
commencement of the field program was delayed due to the COVID-19 restrictions. The 2020 program commenced in
June with the initiation of soil sampling.
FINANCIAL OVERVIEW
FY20 was a year of unique challenges, including devastating bushfires and the COVID-19 global pandemic. Together with
all Australians, we transitioned from a heightened concern around bushfires to the emergence of a global pandemic which
disrupted the way we live and work. In response to COVID-19, IGO proactively developed and implemented a response plan to
safeguard the health and wellbeing of the people in our business and the broader community, whilst also ensuring business
continuity and doing our bit to keep Australia’s economy strong. Throughout, IGO demonstrated remarkable resilience and
adaptability.
The COVID-19 pandemic did not have a material impact on the financial position of IGO with demand for our products remaining
strong. The Company achieved record revenue and underlying EBITDA for the second year in a row. The Group generated total
revenue and other income of $892.4 million, a 13% increase on the prior year result of $792.9 million. This was predominantly
due to stronger base and precious metal prices and the resulting impact on product revenue from the Nova and Tropicana
Operations respectively. Nova continued strong operational performance, exceeding guidance range on all metals, and
delivering production in line with prior year levels. Tropicana production finished within guidance range and revenue was up on
the previous year, despite lower comparative production, driven by a higher realised gold price.
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, as can be seen in the following chart:
Nova’s underlying EBITDA was higher on the previous year, primarily due to the higher revenue from stronger base metal prices.
Tropicana’s underlying EBITDA remained consistent with the previous year with higher realised prices partially offset by lower
gold sold in FY20.
Exploration and evaluation expenditure increased by 26% due to a combination of a more drill intensive exploration program
in the year and increased corporate development expenditure. Corporate expenditure is up slightly due to higher enterprise
systems maintenance costs and an increased investment in a graduate training program. The investment revaluation of
$33.2 million recognised mark-to-market gains on listed investments.
Net profit after tax (NPAT) for the year was $155.1 million, compared to $76.1 million in the previous financial year, as detailed in
the chart below.
NPAT VARIANCE FY20 VS FY19
40
1
(1)
2
(35)
54
(3)
(3)
(1)
(7)
(14)
155
M
$
A
200
180
160
140
120
100
80
60
40
20
0
47
76
9
N P A T F Y 1
s v
a l e
S
o l u m e v
e
c
t i o
n
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r i a
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d
a
o
e
c
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e V
f P r
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r i a
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t
s
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r i a
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-
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r
a
h
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e
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a
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o
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e
s
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p
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r
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a
r
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a
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e
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M T M o
t
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e
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G a i n o
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a i r m e
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n
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t i o
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a
r
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s
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s
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e c
o m e t
c
c
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I n
p
x
x e
a
e
s
n
e
0
N P A T F Y 2
400
350
300
250
200
150
100
50
0
(50)
(100)
M
$
A
351
256
175
173
FY20 $460M
FY19 $341M
Below is a reconciliation of Underlying EBITDA to NPAT for FY20.
M
$
A
600
500
400
300
200
100
0
460
1
(244)
4
(1)
(64)
155
-
(1)
(73)
(58)
(22)
(19)
(7)
(4)
(3)
33
Underlying
EBITDA
Net finance
costs
Depreciation
& amortisation
Gain on sale
of assets
Impairment of
Exploration
Income tax
expense
Net profit after
tax
Nova
Operation
Tropicana
Operation
Long
Operation
Exploration
and evaluation
expense
Corporate
and other
expenses
Investment
revaluation
Share-based
payments
expense
(non-cash)
Depreciation and amortisation expense of $243.6 million (FY19: $237.1 million) was slightly higher than the prior year driven by higher
amortisation of mine properties at Nova following a reserve update in FY20. The Group continued to build its cash reserves with
interest income offsetting finance costs.
44 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 45
DIRECTORS’ REPORT 30 JUNE 2020DIRECTORS’ REPORT 30 JUNE 2020 Cash flows from operating activities for the Group were $397.5 million, compared to the FY19 year of $372.3 million. This was
predominantly a result of higher realised nickel and gold prices at Nova and Tropicana respectively.
The Nova Operation generated $334.6 million cash flows from operating activities, which was a result of 22,260 tonnes of payable
nickel sold (FY19: 22,434 tonnes), 13,115 tonnes of payable copper (FY19: 12,208 tonnes) and 390 tonnes of payable cobalt (FY19:
372 tonnes) sold during the year. Tropicana Operation generated cash from operating activities of $153.4 million following the
sale of 141,169 ounces of gold refined and sold. Cash flow from operating activities also included $70.6 million cash outflow for
exploration and evaluation expenditure and $19.9 million cash outflow for corporate, net borrowing and other costs.
Cash outflows from investing activities increased to $115.3 million for the year, up from $82.8 million for the FY19. The Group spent
$67.5 million on development expenditure, with the majority being waste stripping and underground development at the Tropicana
Operation ($61.2 million). Payments for financial assets include a $27.0M share placement in New Century Resources Limited. During
the year, IGO received deferred consideration totalling $16.1 million in respect of the divestment of the Jaguar Operation in FY18.
Cash flows from financing activities during the financial year included one semi-annual repayment of borrowings totalling
$28.6 million. In response to the COVID-19 outbreak and as a precautionary measure, management proactively sought to defer
payment of the March 2020 scheduled debt repayment of A$28.6M to September 2020. Finally, the Company paid dividends
totalling $82.7 million during the year.
At the end of the financial year, the Group had cash and cash equivalents of $510.3 million and marketable securities of
$107.8 million (FY19: $348.2 million and $27.5 million respectively). The Company’s outstanding debt was $57.1 million, with
expected repayment by September 2020, resulting in a net cash position for the Group of $453.2 million (FY19: $262.5 million).
The Group’s future prospects are dependent on a number of external factors that are summarised towards the end of this report.
Nova Operation
Nova continued its strong operational performance in FY20, exceeding production guidance for all metals. In FY20, a total
of 1,546kt of ore was mined at an average grade of 2.33% nickel and 0.98% copper.
The Nova process plant milled 1,514kt of ore at an average nickel and copper grade of 2.31% and 0.98% respectively for the year,
to produce 30,436t of nickel and 13,772t of copper. Nickel metallurgical recoveries in the processing plant generally performed
in line with modelled recoveries at 86.8%, while copper recoveries were 87.7% for the year.
Nova revenue for the period was $593.3 million, compared to $501.9 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 22,260 tonnes of payable nickel, 13,115 tonnes of payable
copper and 390 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 $2.41 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
46 — IGO ANNUAL REPORT 2020
$'000
$'000
$'000
$'000
tonnes
%
%
%
tonnes
tonnes
tonnes
tonnes
tonnes
tonnes
tonnes
A$/lb total Ni metal payable
A$/lb total Ni metal payable
2020
593,274
182,173
2019
501,891
95,365
1,181,867
1,193,096
92,862
66,996
1,546,308
1,509,875
2.31
0.98
0.09
2.22
0.94
0.08
1,514,268
1,580,706
30,436
13,772
1,142
22,049
12,606
389
2.41
2.74
30,708
13,693
1,090
21,500
12,481
354
2.07
2.79
Tropicana Operation
During the year, total material mined was 34.7M bank cubic metres, which comprised of 10.6 million tonnes of ore (>0.6 grams
per tonne Au) and 81.7 million tonnes of waste material. The average grade mined for full grade ore (>0.6 grams per tonne Au)
was 1.59 grams per tonne Au for the year.
Ore milled was 8.7 million tonnes, which was up 6% on the prior year with FY20 being the first whole year of operation of the
second ball mill, introduced in December 2018. Mill feed grade and recovery were 1.84 grams per tonne and 90.1% for the year,
respectively.
The development of the Boston Shaker Underground Mine commenced in May 2019 and remains on track with first gold
production expected in the September 2020 quarter.
Revenue from the Tropicana Operation for the period was $290.1 million, up 4% 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 141,169 ounces, down 9% 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 $806 per ounce, while All-in Sustaining Costs (AISC) per
ounce sold were $1,171 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
2020
290,078
101,371
357,643
57,785
10,640
1,898
79,796
1.59
8,684
1.84
90.1
463,717
463,118
141,169
806
1,171
2019
278,480
97,627
314,990
41,491
14,747
2,464
73,406
1.65
8,177
2.20
89.4
518,011
518,172
154,402
680
951
* 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.
IGO ANNUAL REPORT 2020 — 47
DIRECTORS’ REPORT 30 JUNE 2020DIRECTORS’ REPORT 30 JUNE 2020 EXTERNAL FACTORS AND RISKS AFFECTING THE GROUP’S RESULTS
Climate Change
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.
COVID-19
The COVID-19 pandemic continues to pose a global socio-political, economic and health risk. The potential for the pandemic to
have both lasting and unforeseen impacts is high. As a Group, we changed the way we work to protect the wellbeing of our people,
safeguard the communities in which we operate and ensure business continuity. We continue to maintain a heightened state of
response readiness commensurate with the risk and in accordance with Government recommendations and health advice.
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 FY21 represents approximately 45% 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 66% of anticipated usage for FY21.
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 slightly over the FY20 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. The Company actively tendered its Nova concentrate in the market in FY20 and,
driven by the strong demand for Nova’s concentrate, was able to enter into new offtake agreements with materially improved
commercial terms compared to the previous contracts they replace.
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.
The Group recognises the importance of providing timely and business-specific information on our approach to managing
climate change related risks and opportunities to stakeholders and investors. In FY20, we completed a workplan to align with
the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD). This included a detailed assessment of
climate-related risks and opportunities over relevant time-horizons, and scenario analysis to test the resilience of our existing
business strategies and financial planning. The full disclosure can be found in our 2020 Sustainability Report, to be released in
September 2020.
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
Following shareholder approval at the Company’s 2019 Annual General Meeting (AGM) held on 20 November 2019, the change
of company name (from Independence Group NL to IGO Limited), company type (from a no liability company to a company
limited by shares) and company constitution (lodged with the ASX on 20 January 2020) became effective from 17 January 2020.
There have been no other significant changes in the state of affairs of the Group during the year.
Native Title
Events Since the End of the Financial Year
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, Environment 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.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and, while it has had limited impact on the Group up to
30 June 2020, it is not practicable to estimate the potential impact, positive or negative, after the reporting date. The situation
continues to develop and is dependent on measures imposed by the Australian Government and other countries, such as
maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
On 27 August 2020, the Company announced that a final dividend for the year ended 30 June 2020 would be paid on
25 September 2020. The dividend is 5.0 cents per share and will be unfranked.
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, Ms. McDonald held positions with Paladin Energy Ltd, Summit Resources Ltd and Unilever plc.
Ms. McDonald 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.
48 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 49
DIRECTORS’ REPORT 30 JUNE 2020DIRECTORS’ REPORT 30 JUNE 2020 MEETINGS OF DIRECTORS
The numbers of meetings of the Directors and of each Board Committee held during the year ended 30 June 2020, 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 Bakker
Peter Bilbe
Kathleen Bozanic1
Peter Bradford
Peter Buck
Geoffrey Clifford2
Keith Spence
Neil Warburton
A
11
10
9
11
11
4
10
11
B
11
11
9
11
11
4
11
11
A
4
4
**
**
4
**
3
**
B
4
4
**
**
4
**
4
**
A
5
5
3
**
**
3
**
**
B
5
5
3
**
**
3
**
**
A
**
3
2
**
**
1
**
3
B
**
3
2
**
**
1
**
3
A
5
**
**
**
5
**
4
4
B
5
**
**
**
5
**
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 Bozanic was appointed a Non-executive Director effective
3 October 2019.
2. Mr Clifford retired as a Non-executive Director effective 20 November 2019.
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 IGO Limited were
as follows:
LETTER FROM CHAIR OF
PEOPLE & PERFORMANCE COMMITTEE
DEAR SHAREHOLDER
On behalf of the People & Performance Committee, I am pleased to share with you our FY20 Remuneration Report.
The FY20 year has presented considerable challenge to our people in the roles they perform and in the communities in
which they live. Despite these challenges, our people have made some significant achievements, including the delivery of
strong performance at Nova and Tropicana, the furthering of key programs of work in the Fraser Range and other exploration
programs that are key to delivering future discovery, and continuing to create a team of people across the business and a
capability and culture that is key to the future delivery of value to shareholders.
Over the past year, we have experienced a variable, role dependent talent market with restrictions on sourcing some roles due
to the impact of COVID-19. Pleasingly however, our continued focus on building a strong and resilient company and culture has
stood us in good stead throughout the year with a growing reputation as a company that people seek to join.
Executive Remuneration and Reward
The Board is focused on providing Executives with fixed remuneration that is competitive and recognises the value that
their skills, experience and expertise deliver to IGO, balanced with an appropriate level of variable reward to incentivise the
achievement of key strategic initiatives. The Board believes that this balanced approach:
• Ensures that the Company attracts and retains key talent through a balance of support and challenge for each individual; and
• Remains an employer of choice.
Each year the Board takes care to ensure that Executive remuneration is an appropriate combination of cash and equity such
that over time Executives are aligned with the long-term interests of shareholders through their personal shareholding in IGO.
Ordinary fully paid shares
Performance rights
Service rights
Short-Term Incentive (STI)
Name
Debra Bakker
Peter Bilbe
Kathleen Bozanic
Peter Bradford
Peter Buck
Keith Spence
Neil Warburton
Total
21,687
40,000
11,780
873,254
22,200
22,125
106,034
-
-
-
-
-
-
381,092
134,0741
-
-
-
-
-
-
1,097,080
381,092
134,074
1 62,601 service rights have vested due to service condition being achieved and subject to being exercised will convert into ordinary shares.
The Board and the Leadership team review and update the Company’s strategic and culturing plan annually. As part of this
planning process, the Board sets and monitors a series of demanding performance targets to drive the achievement of the
annual business plan and the longer term strategic plan throughout the year. The annual STI scorecard, and the weighting
attributed to each element, is carefully designed to take a balanced approach to driving performance critical to delivering the
annual business plan whilst working in concert to ensure progression of the long-term strategic plan that delivers value to all
shareholders. In FY20, these performance targets included the following combination of financial and non-financial focused
measures:
• Health, Safety, Environment and Community - the completion of a program of work to understand IGO’s safety maturity,
and the application of a range of forward and backward looking measures that focused effort on culture and system
improvements to better manage the HSE risk inherent to the Company’s operations.
• People and Culture - engagement and diversity metrics designed to focus achievement on key strategic enablers and
programs of work that result in a workforce that has the balance of diversity of skills and capabilities and the culture to drive
the delivery of the Company’s strategic plan.
• Growth and Strategy - measures the performance required to deliver a suite of strategic initiatives, brownfields/greenfields
opportunities and value accretive M&A opportunities important to growing longer term shareholder value.
• Production Optimisation - measures designed to drive production performance, a key enabler to funding the achievement
of the Company’s strategic plan.
• Financial Performance - financial management measures focus the achievement by Executives on a suite of corporate
financial outcomes that are important to funding the achievement of the Company’s strategic plan to grow shareholder value.
Each year the Board has the capacity to exercise discretion with regard to the award of STI payments to the Executives. In FY20,
there were several events (safety and environmental) that occurred that have caused the Board to exercise this discretion. A
detailed description of the Key Performance Indicators (KPIs) that drive the payment of STI, the performance achieved and the
resulting STI payments can be found in our Remuneration Report in the following pages.
50 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 51
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020DIRECTORS’ REPORT 30 JUNE 2020 Board Discretion - STI Payment Award
FY20 was an exceptional year, with the Company exceeding metals guidance at Nova and Tropicana delivering within guidance,
resulting in underlying free cash flow of $311M and net profit after tax of $155M. This outcome was delivered despite a number
of internal and external challenges (a fatality, regional bushfires and COVID-19) and would not have been possible without the
unwavering commitment and dedication of our people.
Throughout the COVID-19 operating environment, our teams exhibited a significant level of additional effort for many months
to protect our people, safeguard our host communities and deliver continuity of our production and exploration activities. As
a result of this commitment to our business continuity during the second half of FY20, a number of the growth and strategic
programs of work that were planned for the KPI component of the short-term incentive were either put on hold or delayed.
Taking this into account and in acknowledgement of the huge discretionary effort that all IGO employees made during the year,
the Board has approved a discretionary award of an additional 20% to be included in the Company Scorecard for FY20. For
further details on this please see page 58.
Long-Term Incentives (LTI)
In FY20, the Board implemented a change to the categorisation of the Service Rights component of Executive remuneration
from STI in favour of an increased weighting to the LTI. This decision was made to more effectively communicate the deferred
nature of Service Rights in variable reward as a longer-term benefit, differentiated from a cash reward and to highlight the
importance of retention of Executives to drive long-term value creation for shareholders. Further details on how these changes
apply to each of the KMP are detailed in this Remuneration Report.
Planned Remuneration Changes for FY21
The suite of changes for FY21 are discussed in Section 5 of this Report. The main points are:
• There are no changes planned for the Total Fixed Remuneration of KMP in FY21 however, given the current dynamic market,
a mid-year review will be conducted to assess whether adjustments are needed to maintain competitiveness
• The Board has introduced a heightened threshold for KPIs relating to STI. The Board will have the discretion to reduce KPI
outcomes by up to 100% of the cash component of variable incentives in the event of occurrence of any event that is classified
as “catastrophic” in the company’s Risk Matrix. This will apply within the Company from the working group where the event
occurred and progressing through to the Executive Leadership Team; and
• The Board will also have the discretion to reward outstanding performance that falls outside of the existing KPI program for
teams or individuals that have created significant additional value for shareholders and/or employees.
Each year we try to improve our reporting transparency and clarity for shareholders and I trust that our shareholders will find
the 2020 Remuneration Report clearly explains our current remuneration philosophy and executive outcomes for the period.
I welcome your feedback in FY21 in our endeavour to continuously improve all that we do.
KEITH SPENCE
CHAIR – PEOPLE & PERFORMANCE COMMITTEE
REMUNERATION
REPORT (AUDITED)
Key Management Personnel (KMP) of the Group (also referred to as Executive or 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
FY20 OVERVIEW
Section 1 details organisational developments and outcomes in FY20.
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 FY20
Section 3 details remuneration arrangements in FY20 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
NON-EXECUTIVE DIRECTOR
REMUNERATION
Section 4 details remuneration and benefits for the Company’s Non-
executive Directors (see pages 40 to 41 for details about each Director)
including:
Peter Bilbe - Non-executive Chairman
Debra Bakker - Non-executive Director
Kathleen Bozanic - Non-executive Director (appointed 3 October 2019)
Peter Buck - Non-executive Director
Geoffrey Clifford – Non-executive Director (from 1 July 2019 until his
retirement on 20 November 2019)
Keith Spence - Non-executive Director
Neil Warburton - Non-executive Director
Section 5 provides an overview of the planned changes in remuneration
and reward FY21 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.
SECTION 5
PLANNED REMUNERATION
CHANGES FOR FY21
SECTION 6
STATUTORY REMUNERATION
DISCLOSURES
52 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 53
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020 SECTION 1.
FY20 OVERVIEW
SECTION 2.
REMUNERATION AT IGO
The COVID-19 environment in which our people have operated during FY20 has presented considerable challenge in both
the roles they perform and the communities in which they live. Despite these challenges our people have made significant
progress on a range of strategic initiatives, delivering strong operational performance at Nova and Tropicana, key programs
of work in the Fraser Range and other exploration programs, and have continued to build teams of people across the business
with a culture that will be key to positioning IGO for success. This performance is the result of the focus and strong sense
of collective purpose of the Executive team, together with the efforts of every person in the wider IGO team.
The Company’s Total Rewards Philosophy is designed to provide Executives and employees with a combination of remuneration
and non-financial benefits to drive performance. Over time, this holistic philosophy has been fundamental in forming the basis
for the connection of some of the key elements of our Strategy and Purpose to remuneration. 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
remuneration initiatives were implemented at a Board and Executive level, for FY20:
REMUNERATION GOVERNANCE OVERVIEW
The Board recognises that the continued success of the business depends upon the quality of its people. To ensure the
Company continues to innovate 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 FY20. Ms Bakker and Messrs Bilbe and Buck are also
Committee members. The Managing Director was invited to attend all meetings which considered 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:
• Increases in Total Fixed Remuneration (TFR) for KMPs in line with market benchmarking, role scope and scale to ensure that
Executive fixed remuneration remained competitive within the comparator and broader industry groups for similar roles
BOARD
• An increase in the STI award for the CEO from 35% to 50%, for the COO from 25% to 40%, and for other KMP from 17.5% to 25%
as a result of the findings of detailed benchmarking, which indicated that the cash component of Executive variable incentive
was less competitive than the peer group
• A reorganisation of variable incentive attributable to LTI with the inclusion of an increased award of Service Rights as part of
the deferred incentive and a small scale back in the number of Performance Rights. This change was made to better focus
senior leaders in the business on the non-cash, deferred component of their remuneration (Service Rights and Performance
Rights) and the commitment to increase the personal shareholdings of KMP through their retention and the achievement
of the suite of performance hurdles closely aligned to the time horizons of shareholders
• An increase of $20,000 in the remuneration for the Board Chair to $250,000 to remain competitive based on market
benchmarking of the IGO peer group; and
• An increase of $5,000 in the remuneration for Committee Chair roles for the Audit, People & Performance and Sustainability
& Risk Committees and $10,000 for the Chair of the Nomination & Governance Committee to remain competitive based
on market benchmarking of the IGO peer group.
• No other changes were made to Non-executive Director remuneration during FY20.
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
• Non-executive Director, CEO and KMP remuneration
• 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.
Health and wellbeing 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 2020, no remuneration
recommendations, as defined by the Corporations Act 2001, were
provided by remuneration consultants. However, the Committee
did utilise data provided by Aon Australia $7,500 and Mercer
Consulting $2,400 regarding salaries and benefits across the
organisation.
Further information on the Committee’s role, responsibilities and membership can be found under the Governance section on
the Company’s website: www.igo.com.au.
54 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 55
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020
SECTION 3.
EXECUTIVE REMUNERATION IN FY20
COMPONENTS OF EXECUTIVE REMUNERATION AT IGO
Executive remuneration at IGO is comprised of a mix 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 at least annually by the People & Performance Committee.
The table below provides an overview of the different remuneration components within the IGO framework.
KMP AT RISK REMUNERATION IN FY20
The at risk components of Executive remuneration at IGO are intended to drive performance and long-term stability in
shareholder returns without encouraging undue risk-taking.
The mix of fixed and at risk remuneration varies depending on the role and reward grading of Executives and employees. 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 FY20:
Managing Director and CEO
TFR – 33%
STI – 17%
Chief Operating Officer
TFR – 39%
Chief Financial Officer
TFR – 43%
STI – 15%
STI – 11%
LTI – 50%
LTI – 46%
LTI – 46%
LTI – 38%
Objective
Attract and retain
the best talent
Reward current year
performance
Reward long-term sustainable
performance
MALUS AND CLAWBACK PROVISION
Performance related remuneration (at risk)
Other Executive KMP
TFR – 50%
STI – 12%
Remuneration
Component
Total Fixed Remuneration
(TFR) – includes salary and
superannuation
Short-Term Incentive (STI) –
paid as cash
Long-Term Incentive (LTI) –
paid as service rights and
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 of KMP.
The LTI is focused on the
achievement of stable mid to
long-term shareholder returns
through the Company’s long-
term strategic objectives and
retention.
TOTAL REALISED EARNINGS FOR KMP IN FY20
The table below provides details of the actual remuneration earned during FY20 for KMP. Amounts include:
• Total fixed remuneration received
• The cash component of the STI earned as a result of business and individual performance for FY20
• Ordinary shares received as a result of service rights that vested during the year; and
• Ordinary shares received as a result of performance rights that vested during the year1.
Peter Bradford
$870,000
$317,500
$279,264
Keith Ashby
$370,000
$65,000
$59,472
Kate Barker
$350,000
$64,500
$51,474
Matt Dusci
$608,949
Andrew Eddowes
$380,000
Joanne McDonald
$348,750
$69,500
$71,658
$860,000
$860,000
$860,000
$63,500
$51,594
Sam Retallack
$370,000
$68,500
$58,944
Ian Sandl
$385,577
$69,000
$24,816
Scott Steinkrug
$460,000
$85,000 $106,596
$186,500 $116,232
TFR
STI Cash
Service Rights vested
1. Nil were received for FY20.
56 — IGO ANNUAL REPORT 2020
IGO has a malus and clawback provision that allows the Board to reduce or clawback unvested and vested entitlements
in certain circumstances, including in the case of fraud, dishonesty, gross misconduct, bringing the Group into disrepute,
breach of obligations to the Group, material financial misstatements, where warranted due to risk behaviour, or other
circumstances under law or Group policy. The EIP also allows the Board to reduce unvested awards where vesting is not
justified or supportable for performance or other specified reasons.
IGO STIP OUTLINE FOR FY20
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 100% cash 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, and are designed to motivate and incentivise the Executive to drive to achieve high levels of performance aligned
with Company objectives and near-term shareholder value creation.
In FY20, the performance targets for KPI assessment reflected the following financial and non-financial components:
• Health, Safety, Environment and Community
• People and Culture
• Growth and Strategy
• Production Optimisation
• Financial Performance
Performance
Assessment
The Company employs a system of continuous performance feedback to drive performance and KMP performance is
regularly reviewed by the Board throughout the financial year against the defined KPIs. 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 and behaviours.
Measurement
Period
Termination of
Employment
Board
Discretion
The STIP is an annual program and operates from 1 July to 30 June each year.
In the event that an Executive’s employment terminates prior to the end of a financial year the Executive may or may not
receive a pro rata payment, depending on the circumstances of the cessation of employment.
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.
HOW PERFORMANCE WAS LINKED TO STIP OUTCOMES IN FY20
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. Although significant progress was made in achieving Company KPIs and a range of other
related programs of work, the final result was disappointing for several Key Result Areas (KRAs).
IGO ANNUAL REPORT 2020 — 57
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020
Company Scorecard Gating
• No Production Optimisation or Financial Performance component in the event of Company NPAT being negative before abnormals.
• No Growth and Strategy component in the event of a material downward restatement of the previous year’s Reserves.
• No Health, Safety, 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.
FY20 Scorecard
The KPI Scorecard for KMP and performance achieved against the specific KPIs for each KRA for FY20 are listed in the table below.
Key Result Area (KRA)
Rationale for inclusion
Performance and commentary
Health, Safety, Environment
and Community
Measure HSE maturity and
deliver a 10% improvement
during FY20.
15% weighting
No score1
The completion of a third-party
review, and the application of a range
of forward and backward looking
measures that focused effort on
culture and system improvements to
better manage the HSE risk inherent
to the Company’s operations.
Given the previously reported tragic death of one of our contractors’
employees resulting from an incident at our Nova Operation in September
2019, and an environmental compliance issue in exploration, the Board
has decided that no payment will be made to KMP in respect of this KRA.
However, for the majority of IGO’s workforce, FY20 saw significant
improvements to many of our HSE systems. Consequently, for non KMP
entitled to an STI, the HSE KRA component of their STI will reflect the
outcomes within their operational area.
People and Culture
15% weighting
No score1
Deliver year-on-year
improvement in:
• Annual Engagement Survey
Score; and
• Diversity metrics for 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 balance of
diversity of skills and capabilities to
drive the delivery of the Company’s
strategic plan.
The Company achieved just below threshold performance for the
Engagement Survey score:
Engagement Survey Score 69% (Threshold = 70%, Target = 75%)
Improvements were made across the business with programs of work to
improve the diversity of the employee population, however targets for
the delivery of year-on-year improvement for diversity metrics were not
achieved, resulting in the Company maintaining FY19 levels i.e.
• 24% Female employment (Threshold = 25%, Target = 30%)
• 3% Aboriginal employment (Threshold = 3%, Target = 3.5%)
Growth and Strategy2
40% weighting
20% 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.
Progress achieved in line with our strategic priorities and time lines.
Production Optimisation
20% weighting
20% achieved
Achieve consolidated
production targets for Nova on
a nickel metal equivalent basis.
Delivery of strong production
performance is a key enabler to
funding the achievement of the
Company’s strategic plan.
The production outcome achieved at Nova represented a strong
operational result in excess of the target performance for FY20.
Target = 30,264 tonnes
Actual = 30,436 tonnes
Financial Performance
10% weighting
10% achieved
Achieve consolidated operating
costs (production and non-
production) for the Group
(excluding non-controlled
operations).
Achievement of strong financial
management is a key enabler to
funding the achievement of the
Company’s strategic plan.
The Company achieved a strong result with better than targeted
operating costs for FY20.
Target = $320M
Actual = $307M
Board Discretion
20% weighting
20% achieved
COVID-19 Response/Business
continuity.
The Board has discretion to adjust KPI
awards when internal or external events
materially impact KPI performance
and/or achievement.
The extraordinary effort from KMP, COVID-19 Response Team and all
employees in response to COVID-19 and the swift implementation of a
number of business continuity measures ensured the strong financial
and operating performance achieved for FY20.
Total weighting 120%3
Total outcome 70%
1. Due to the fatality that occurred at our Nova Operation in September 2019.
2. Due to the sensitive nature of some corporate KPIs the full detail on measures and achievement is confidential.
3. Total weighting increased to 120% with the addition of the Board Discretion KRA.
KRA measure achieved
KRA measure partially achieved
KRA measure not met
FY20 STIP OUTCOMES
Name
Position
Peter Bradford
Managing Director & CEO
Keith Ashby
Head of SHEQ & Risk
Kate Barker
General Counsel
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
FY20
Potential STI 1
%
FY20 STI
Declared2
$
FY19
Potential STI
%
50
25
25
40
25
25
25
25
25
317,500
65,000
64,500
186,500
69,500
63,500
68,500
69,000
85,000
70
35
35
50
35
35
35
35
50
FY19
STI3
$
482,000
103,000
98,000
217,000
106,000
98,000
103,000
106,000
185,000
1.
2.
3.
% of TFR (base salary plus superannuation).
To be paid in cash in August 2020.
FY19 STI comprises 50% in cash (paid in August 2019) and 50% in service rights (vesting in equal parts in September 2020 and September 2021).
IGO LTIP OUTLINE FOR FY20
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 and reward grade within the business and is awarded by:
• The award of a number of service rights based on a percentage of TFR. Service rights are awarded on or above
threshold performance against a range of business objectives (company KPI) and individual performance
(Individual KPI); and
• 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 64.
Service Rights
Service rights issued for FY20 performance 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% on the 24 month anniversary of the award date.
Vesting of the service rights is based on a continuous service condition being met and is designed to act as a driver of
retention and continuity of medium-term value creation.
Performance
Rights Hurdles
For performance rights issued in FY20 there are four equally weighted (25%) performance hurdles utilising the
following measures:
1. Relative TSR
2. Absolute TSR
3. Reserve growth per share; and
4. EBITDA average margin.
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
for Performance
Rights
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 and
to promote long-term stability in shareholder returns.
58 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 59
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020 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.
Performance
Rights
Measurement
Period
Cessation of
Employment
Testing occurs three years from 1 July of the relevant financial year.
In the event that the Executive’s employment with IGO terminates prior to the vesting of all service and performance
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.
Absolute TSR
The increase in the Company’s absolute TSR will be measured over the three year measurement 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.
Reserve growth per share
Reserve growth per share is defined as ore reserve growth in excess of depletion over the three year measurement
period.
The Board considers that reserve growth per share is an appropriate performance hurdle to align senior leaders of
the business on the achievement of programs of work that achieve the Company’s strategic initiatives for brownfields/
greenfields opportunities and value accretive M&A opportunities important to growing shareholder value.
EBITDA Average Margin
EBITDA average margin is defined as a measure of the Company’s EBITDA as a percentage of its revenue averaged over
the measurement period.
The Board considers that EBITDA average margin is an appropriate performance hurdle to align senior leaders on
ensuring the sustained operating profitability of the business over time and transparency for shareholders on the
Company’s performance in comparison to the IGO peer group.
Performance
Rights Vesting
Schedules
Relative TSR
The vesting schedule of the 25% of performance rights subject to relative TSR testing is as follows:
Relative TSR performance
Less than 50th percentile
Between 50th and 75th percentile
Level of vesting
0%
50% plus pro-rata straight line percentage between 50%
and 100%
75th percentile or better
100%
Absolute TSR
The vesting schedule of the 25% of performance rights subject to absolute TSR testing is as follows:
Absolute TSR performance
10% per annum return
% of Performance Rights that will vest
33%
Board Discretion
The Board has absolute discretion to adjust service rights vesting if, on assessment, service or behaviour criteria have
not been met.
The Board has absolute discretion to adjust performance rights vesting if, on assessment, absolute TSR is negative
over the performance period.
Peer Group
LTI - Non-
executive
Directors
The Company’s relative TSR performance for performance rights issued during FY20 will be assessed against a peer
group comprised of members of the S&P ASX 300 Metals and Mining Index, as well as several mining companies listed
on the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE).
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.
FY20 LTIP OUTCOMES
Name
Position
Peter Bradford
Managing Director & CEO
Keith Ashby
Head of SHEQ & Risk
Kate Barker
General Counsel
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
Service rights to be
issued for FY20 period 1
$ Value
Performance rights
issued for FY20 period 2
Number
Performance rights
issued for FY19 period 3
Number
317,500
65,000
64,500
186,500
69,500
63,500
68,500
69,000
85,000
162,6174
34,579
32,710
83,738
35,514
32,710
34,579
37,383
68,785
218,475
45,727
43,187
110,161
47,251
43,187
45,727
46,997
83,140
Above 10% per annum and below 20% per annum return Pro-rata straight line percentage between 33% and 100%
Scott Steinkrug
Chief Financial Officer
Above 20% per annum return
100%
Reserve growth per share
The vesting schedule of the 25% of performance rights subject to Reserve growth per share testing is as follows:
Reserve growth in Ore Reserves per share performance
Level of vesting
<90% of Baseline Ore Reserves
90% of Baseline Ore Reserves
0%
33%
Above 90% of Baseline Ore Reserves and below 100%
Straight-line pro-rata between 33% and 66%
100% Baseline Ore Reserves
66%
Above 100% of Baseline Ore Reserves and below 120%
Straight-line pro-rata between 66% and 100%
120% and above Baseline Ore Reserves
100%
EBITDA average margin
The vesting schedule of the 25% of performance rights subject to EBITDA average margin testing is as follows:
Group EBITDA Margin
Level of vesting
<20%
≥ 20%
≥ 30%
≥ 40%
0%
33%
66%
100%
1.
2.
3.
4.
Represents the $ value of the award of service rights to be granted for FY20 performance. Service rights will be issued in September 2020 based on the 5 day
VWAP following the release of IGO’s 2020 Financial Statements. The service rights will vest in equal parts in September 2021 and September 2022.
Performance rights awarded at 20 day VWAP to 26 August 2019 of $5.35.
Performance rights awarded at 20 day VWAP to 25 August 2018 of $4.33.
Approved by shareholders at the 2019 Annual General Meeting.
APPROVED BY SHAREHOLDERS AT THE 2019 ANNUAL GENERAL MEETING
The IGO Limited Employee Incentive Plan (EIP) was approved by shareholders at the Annual General Meeting in November 2019.
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 FY20 this percentage stands at 0.71%. There are no voting or dividend rights attached to the share rights.
60 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 61
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020
SECTION 4.
NON-EXECUTIVE DIRECTOR REMUNERATION
SECTION 5.
PLANNED REMUNERATION CHANGES FOR FY21
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
Kathleen Bozanic1
Peter Buck
Geoffrey Clifford2
Keith Spence
Neil Warburton
Total Non-executive Director remuneration
Year
2020
2019
2020
2019
2020
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
Cash fees
$
Superannuation
$
127,854
123,288
239,545
210,046
81,397
128,288
123,288
49,721
118,721
127,854
123,288
109,589
109,589
864,248
808,220
12,146
11,712
21,690
19,954
7,733
11,712
11,712
4,723
11,279
12,146
11,712
10,411
10,411
80,561
76,780
Total
$
140,000
135,000
261,235
230,000
89,130
140,000
135,000
54,444
130,000
140,000
135,000
120,000
120,000
944,809
885,000
1.
Ms Bozanic was appointed a Non-executive Director effective 3 October 2019.
2. Mr Clifford retired as a Non-executive Director effective 20 November 2019.
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 $930,000 was being utilised at 30 June 2020 (2019: $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.
Following small adjustments to the remuneration of the Board and Committee Chairs in FY20, and based on market data
from both the IGO peer group and the market more broadly, there will be no changes to Board or Committee Chairs’ or
Non-executive Directors remuneration in FY21.
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
Approved 2021
30 June 2020
30 June 2019
250,000
120,000
20,000
20,000
20,000
20,000
Nil
250,000
120,000
20,000
20,000
20,000
20,000
Nil
230,000
120,000
15,000
15,000
15,000
10,000
Nil
In uncertain times the Board and Executive team appreciate the importance of competitive remuneration to support our
employees to deliver the sustained and enduring performance that drives value for our shareholders and community
partnerships. Looking ahead, the Board and Executive team have identified potential pressure on sourcing talent through the
continued challenges associated with the mobility of people around the globe in a COVID-19 environment and as such will place
renewed focus on sourcing and engagement strategies to recruit and retain local talent.
The Company reviews Executive remuneration practices annually. In determining any changes to remuneration for Executives in
FY21, the Board considered benchmarked information and shareholder feedback to adopt a balanced approach that supports
the achievement of our strategic plan. As a result of the benchmarking conducted in FY20, and as a reflection of the uncertain
economic environment anticipated into FY21, the Board have taken a restrained approach to the quantum of change proposed
in FY21 with few material alterations made to the remuneration structure of IGO KMP. The Board is however mindful that for
some sectors the demand for talent will drive a level of wage pressure that will require careful consideration. To balance this
uncertainty a mid-year review of remuneration will be conducted, with adjustments made for individuals to the extent that their
remuneration level puts the retention of the required skillsets at risk.
Completed changes and/or progress towards remuneration objectives will be reported in more detail in the FY21 Remuneration
Report, however a summary of the key elements of the proposed FY21 program are provided below:
KMP TFR
• There are no changes planned for the TFR of KMP in FY21; and
Company
Scorecard Gating
• A mid-year parity review of remuneration will be conducted if market conditions change as a result
of the ongoing COVID-19 environment to the extent that salaries require adjustment or external
market benchmark testing indicates the requirement for an out of cycle review. The Board’s
objective is to ensure that market expectations for Executive remuneration, given external economic
conditions, is balanced with a combination of competitive pay for retention of Executives.
In FY21 the Board will introduce an additional level of discretion to the gating of KPIs as follows:
• The IGO Board will have the discretion to reduce KPI outcomes by up to 100% of the cash component
of variable incentives in the event of occurrence of any event that is classified as “catastrophic” in the
Company’s Risk Matrix*; and
• The Board will have the discretion to reward outstanding performance that falls outside of the existing
KPI program for teams or individuals that have created significant additional value for shareholders
and/or employees.
The Board’s objective is to improve the mechanism by which adjustments in Executive variable reward
can be made in an unpredictable environment. In exercising this discretion, the Board will consider
causal factors leading to the event.
* Assessment of this event will be based on the Company’s Common Management System – Risk Management Matrix available at
www.igo.com.au
Short-Term
Incentive
• More clearly defined performance thresholds and targets will be used to describe the required
levels of performance and enhance the transparency of reporting; and
• No changes will be made to the STIs of KMP in FY21. Following the changes made as a result of
peer group benchmarking in FY20 the Board believes that the current levels of short-term, at risk
incentives are appropriately competitive for all KMP.
Long-Term
Incentive
Following the adjustments made to the classification of service rights into the LTIP in FY20, and
subsequent market and peer group benchmarking in FY20, there will be no changes made to the LTIs of
KMP in FY21.
62 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 63
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020 The following table reflects remuneration changes available to Executives for FY21, effective 1 July 2020:
Name
Position
Total Remuneration FY21
Total Remuneration FY20
TFR $
STI %
LTI %
TFR $
STI %
LTI %
Peter Bradford
Managing Director & CEO
Keith Ashby
Head of SHEQ & Risk
Kate Barker
General Counsel
Matt Dusci1
Chief Operating Officer
870,000
370,000
350,000
630,000
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
105
870,000
370,000
350,000
630,000
380,000
350,000
370,000
400,000
460,000
50
25
25
40
25
25
25
25
25
150
75
75
120
75
75
75
75
105
1.
The Board approved an increase in Mr Dusci’s TFR from $560,000 to $630,000 effective 21 October 2019 due to an expansion of his role.
COMPANY PERFORMANCE
A key and continued focus for the Board and Company is to align Executive remuneration to the achievement of strategic and
business objectives of the Group and the creation of shareholder value. The table below illustrates a summary of the Group’s
financial performance over the last five years as required by the Corporations Act 2001.
Revenue ($ millions)
Profit (loss) for the year attributable to owners ($ millions)
Dividend payments (cents per share)
Share price at year end ($ per share)
2020
888.9
155.1
14.0
4.87
2019
784.5
76.1
4.0
4.72
2018
777.9
52.7
2.0
5.14
2017
421.9
17.0
3.0
3.15
2016
413.2
(58.8)
2.5
3.28
64 — IGO ANNUAL REPORT 2020
SECTION 6.
STATUTORY REMUNERATION DISCLOSURES
EXECUTIVE CONTRACTS
Remuneration and other terms of employment for 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 2020
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
630,000
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 FY20. The 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 or 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
$ Value1
870,000
370,000
350,000
608,949
380,000
348,7504
370,000
385,5774
460,000
STI Cash
Component
$ Value2
Vested Service
Rights Component
$ Value
Vested Performance
Rights Component
$ Value3
317,500
65,000
64,500
186,500
69,500
63,500
68,500
69,000
85,000
279,264
59,472
51,474
116,232
71,658
51,594
58,944
24,816
106,596
-
-
-
-
-
-
-
-
-
Total Actual
Remuneration
$ Value
1,466,764
494,472
465,974
911,681
521,158
463,844
497,444
479,393
651,596
1.
2.
3.
4.
Includes base salary and superannuation.
Represents the amounts to be paid in August 2020 for performance in FY20.
The Company achieved relative TSR performance of below the 50th percentile for the FY17 Series
Performance Rights, resulting in the cancellation of the performance rights.
Ms McDonald and Mr Sandl took unpaid leave during the year.
IGO ANNUAL REPORT 2020 — 65
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020
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.
ADDITIONAL STATUTORY INFORMATION
Name
Year
Cash salary
and fees1
$
Cash
bonus2
$
Super-
annuation
$
Long service
leave3
$
Share
rights4
$
Total Performance
Related
$
Executive Directors
Peter Bradford
2020
2019
Other Key Management Personnel
856,309
317,500
25,000
37,619
895,207
2,131,635
786,877
241,000
25,000
23,795
707,930
1,784,602
Keith Ashby
Kate Barker
Matt Dusci
2020
2019
2020
2019
2020
2019
354,117
65,000
25,000
11,302
180,150
635,569
343,623
51,500
25,000
9,048
132,244
561,415
328,493
64,500
25,000
9,673
141,763
569,429
316,689
49,000
25,000
18,039
89,757
498,485
617,429
186,500
25,000
28,183
413,922
1,271,034
516,497
108,500
25,000
15,549
297,588
963,134
Andrew Eddowes
2020
351,893
69,500
25,000
11,949
159,658
618,000
2019
361,167
53,000
25,000
(18,797)
113,021
533,391
Joanne McDonald
2020
320,401
63,500
25,000
9,280
142,239
560,420
Sam Retallack
Ian Sandl
Scott Steinkrug
Total executive
directors and
other KMPs
Total NED
remuneration
(see page 62)
Total KMP
remuneration
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
317,100
49,000
25,000
9,387
93,416
493,903
350,609
68,500
25,000
10,399
179,887
634,395
337,833
51,500
25,000
14,764
131,803
560,900
367,261
69,000
25,000
7,061
157,382
625,704
348,786
53,000
25,000
3,664
77,428
507,878
451,409
85,000
25,000
12,984
344,649
919,042
427,409
92,500
25,000
10,617
258,739
814,265
3,997,921
989,000
225,000
138,450
2,614,857
7,965,228
3,755,981
749,000
225,000
86,066
1,901,926
6,717,973
864,248
808,220
-
-
80,561
76,780
-
-
-
-
944,809
885,000
2020
4,862,169
989,000
305,561
138,450
2,614,857
8,910,037
2019
4,564,201
749,000
301,780
86,066
1,901,926
7,602,973
%
57
53
39
33
36
28
47
42
37
31
37
29
39
33
36
26
47
43
1.
2.
3.
4.
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 FY20 performance and will be paid in August 2020 (2019: Related to FY19 and
paid in August 2019).
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 AASB 2
Share-based Payment. Refer to note 26 for details of the valuation techniques used for the EIP.
(II) Performance based remuneration granted and forfeited during the year
The table below shows for each KMP how much of their STI cash bonus and LTI service rights were awarded and how much was
forfeited. It also shows the value of performance rights that were granted, vested and forfeited during FY20. The number of
performance rights and percentages vested/forfeited for each grant are disclosed in the table on page 68.
Name
STI bonus (cash)
LTI (service rights)
LTI (performance rights)
Total
opportunity
$
Awarded1
$
Awarded
%
Forfeited
%
Total
opportunity
$
Awarded2
$
Awarded
%
Forfeited
%
Peter Bradford
435,000
317,500
Keith Ashby
92,500
65,000
Kate Barker
87,500
64,500
Matt Dusci
252,000
186,500
Andrew Eddowes
95,000
69,500
Joanne McDonald
87,500
63,500
Sam Retallack
92,500
68,500
Ian Sandl
100,000
69,000
Scott Steinkrug
115,000
85,000
73
70
74
74
73
73
74
69
74
27
30
26
26
27
27
26
31
26
435,000
317,500
92,500
65,000
87,500
64,500
252,000
186,500
95,000
69,500
87,500
63,500
92,500
68,500
100,000
69,000
115,000
85,000
73
70
74
74
73
73
74
69
74
27
30
26
26
27
27
26
31
26
Value
granted3
$
724,253
160,721
152,034
389,209
165,067
152,034
160,721
173,754
319,708
Value
vested4
$
Value
forfeited4
$
-
-
-
-
-
-
-
-
-
298,732
38,339
23,379
92,466
36,084
31,574
38,339
-
92,466
1.
2.
3.
4.
To be paid in August 2020.
Service rights will be issued in September 2020 based on the 5 day VWAP following the release of IGO’s 2020 Financial Statements. The service rights will vest
in equal parts in September 2021 and September 2022.
The value at grant date for performance rights granted during the year as part of remuneration is calculated in accordance with AASB 2 Share-based Payment.
Refer to note 26 for details of the valuation techniques used for the EIP.
The value of performance rights vested and forfeited is based on the value of the performance rights at grant date.
(III) Terms and conditions of the share-based payment arrangements
Performance rights under the Company’s EIP
Performance rights under the Company’s EIP are granted annually. The performance rights vest after three years from the start
of the financial year, subject to meeting certain performance conditions. On vesting, each performance right automatically
converts into one ordinary share. The Executives do not receive any dividends and are not entitled to vote in relation to the
performance rights during the vesting period. If an Executive ceases employment before the performance rights vest, the
performance rights will be forfeited, except in certain circumstances that are approved by the Board.
The value at grant date for performance rights granted during the year as part of remuneration is calculated in accordance with
AASB 2 Share-based Payment. Refer to note 26 for details of the valuation techniques used for the EIP.
Grant date
Vesting date
Grant date value
Performance achieved
20 November 2019
14 October 2019
20 November 2018
28 September 2018
24 November 2017
29 September 2017
22 May 2017
24 November 2016
18 November 2016
1 July 2022
1 July 2022
1 July 2021
1 July 2021
1 July 2020
1 July 2020
1 July 2019
1 July 2019
1 July 2019
$
4.45
4.65
2.17
2.81
3.14
2.29
2.30
2.26
2.21
To be determined
To be determined
To be determined
To be determined
To be determined2
To be determined2
Less than 50th percentile1
Less than 50th percentile1
Less than 50th percentile1
Vested
%
n/a
n/a
n/a
n/a
n/a
n/a
0
0
0
1.
2.
The Company achieved relative TSR performance for the FY17 Series Performance Rights for the three year period 1 July 2016 to 30 June 2019 of 44.8%. This
was below the 50th percentile of the comparator group and resulted in all FY17 Series Performance Rights lapsing and cancelled.
The relative and absolute TSR performance conditions of the share rights granted in FY18 (which were due to vest on 1 July 2020) were tested post 30 June
2020. The Company achieved a TSR of 56.0% for the period 1 July 2017 to 30 June 2020, resulting in the vesting of 72.6% of performance rights subject to relative
TSR testing and 97.9% of performance rights subject to absolute TSR testing (with 50% allocation to both relative and absolute TSR). This resulted in an overall
vesting of 85.2% of the FY18 Series Performance Rights, with the balance of the performance rights lapsing and subsequently cancelled. This will be
accounted for in the FY21 Remuneration Report.
66 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 67
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020
Service rights under the Company’s EIP
Service rights issued under the Company’s EIP are granted following the determination of the final STI performance result for the
performance year. The service rights component of the LTI 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 service rights during the vesting period. If an Executive ceases
employment before the service rights vest, the service 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 service rights is determined based on the 5 day VWAP of the Company’s shares after release of IGO’s annual
financial statements.
Grant date
Vesting
Vesting date
Grant date value
14 October 2019
5 October 2018
9 October 2017
%
50
50
50
50
50
50
1 September 2020
1 September 2021
2 September 2019
1 September 2020
3 September 2018
2 September 2019
$
5.88
5.88
4.21
4.21
3.51
3.51
(IV) Reconciliation of performance rights, service rights and ordinary shares held by KMP
Performance rights
The table below shows the number of performance rights that were granted, vested and forfeited during the year.
Name
Financial
year
granted
Balance
at start of
the year
Granted
during
the year
Vested during
the year
Forfeited during
the year
Balance at the
end of the year
(unvested)
Maximum
value yet
to vest
Number
Number
Number
%
Number
Peter Bradford
2020
-
162,617
Keith Ashby
Kate Barker
Matt Dusci
2019
2018
2017
2020
2019
2018
2017
2020
2019
2018
2017
2020
2019
2018
2017
218,475
266,667
135,000
-
-
-
-
34,579
45,727
53,031
17,000
-
-
-
-
32,710
43,187
17,371
10,157
-
-
-
-
83,738
110,161
121,213
41,000
-
-
-
Andrew Eddowes
2020
-
35,514
2019
2018
2017
47,251
22,131
16,000
-
-
-
Joanne McDonald 2020
-
32,710
2019
2018
2017
43,187
17,819
14,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
-
-
-
-
-
-
135,000
100
-
-
-
-
-
-
17,000
100
-
-
-
-
-
-
10,157
100
-
-
-
-
-
-
41,000
100
-
-
-
-
-
-
16,000
100
-
-
-
-
-
-
14,000
100
Number
$
162,617
482,836
218,475
157,795
266,667
-
-
-
34,579
116,050
45,727
53,031
-
32,710
43,187
17,371
-
83,738
110,161
121,213
-
45,592
-
-
109,777
43,059
-
-
281,031
109,835
-
-
35,514
119,188
47,251
22,131
-
32,710
43,187
17,819
-
47,111
-
-
109,777
43,059
-
-
Sam Retallack
2020
-
34,579
Ian Sandl
2019
2018
2017
2020
2019
2018
45,727
53,031
17,000
-
-
-
-
37,383
46,997
22,182
-
-
Scott Steinkrug
2020
-
68,785
2019
2018
2017
83,140
109,091
41,000
-
-
-
Service rights
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17,000
100
-
-
-
-
-
-
-
-
-
-
-
-
41,000
100
34,579
116,050
45,727
53,031
-
45,592
-
-
37,383
125,460
46,997
22,182
46,858
-
68,785
230,848
83,140
109,091
-
82,894
-
-
The table below shows the number of service rights that were granted, vested and forfeited during the year.
Name
Financial
year
granted
Balance
at start of
the year
Granted
during
the year
Vested during
the year1
Forfeited
during
the year
Balance at end
of the year
Maximum
value yet
to vest
Number
Number Number
% Number
%
exercisable2 Unvested
Vested and
Peter Bradford
Keith Ashby
Kate Barker
Matt Dusci
Andrew
Eddowes
Joanne
McDonald
Sam Retallack
Ian Sandl
Scott
Steinkrug
2020
2019
2018
2020
2019
2018
2020
2019
2018
2020
2019
2018
2020
2019
2018
2020
2019
2018
2020
2019
2018
2020
2019
2020
2019
2018
-
40,986
-
-
43,230
24,929
-
-
21,615
50.0
24,929
100.0
-
8,759
-
-
9,282
5,271
-
-
4,641
50.0
5,271
100.0
-
8,333
-
-
7,648
4,755
-
-
3,824
50.0
4,755
100.0
-
18,452
-
-
18,942
9,901
-
9,775
7,056
-
-
9,471
50.0
9,901
100.0
9,014
-
-
-
-
4,887
50.0
7,056
100.0
-
8,333
-
-
7,723
4,738
-
9,107
5,271
-
8,273
-
16,728
9,402
-
-
3,861
50.0
4,738
100.0
8,759
-
-
-
-
4,553
50.0
5,271
100.0
9,014
-
15,731
-
-
-
4,136
-
8,364
-
50.0
-
50.0
9,402
100.0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21,615
49,858
-
4,641
-
-
3,824
9,509
40,986
21,615
-
8,759
4,641
-
8,333
3,824
-
-
18,452
9,471
19,801
-
4,887
-
-
-
-
-
4,553
10,542
-
4,136
-
8,364
9,402
9,471
-
9,014
4,888
-
8,333
3,862
-
8,759
4,554
-
9,014
4,137
15,731
8,364
-
$
98,097
8,106
-
20,964
1,741
-
19,944
1,434
-
44,163
3,552
-
21,574
1,833
-
19,944
1,448
-
20,964
1,708
-
21,574
1,551
37,651
3,137
-
1.
Vesting of the FY19 service rights represents the first tranche of 50% vesting on the 12 month anniversary of the award date and vesting of the FY18 service
rights represents the second tranche of 50% vesting on the 24 month anniversary of the award date.
2.
Service rights have vested due to service condition being achieved and, subject to being exercised, will convert into ordinary shares.
68 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 69
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020
Shareholdings of KMP
SHARES UNDER OPTION
The number of ordinary shares in the Company held by each Director and other KMP, including their personally related entities,
are set out below.
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 2020 on the exercise of options.
Name
Directors
Debra Bakker
Peter Bilbe
Kathleen Bozanic
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 the
start of the year
Received during the year
on vesting or exercise of
service rights
Other changes
during the period
Balance at the end
of the year
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
-
-
-
-
-
-
-
-
5,271
-
-
14,112
8,599
-
-
-
27,982
5,602
-
11,780
(354,000)
-
(15,000)
-
-
-
-
-
(14,112)
(18,693)
-
-
(45,000)
(429,423)
21,687
40,000
11,780
646,000
22,200
-
22,125
106,034
20,339
4,115
41,360
111,083
-
29,662
2,503
74,411
1,153,299
Whilst IGO does not have a formal policy stating a minimum shareholding in IGO shares for Directors, a 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.
Further, IGO acknowledges that each current and future KMP may also have different personal circumstances. As such, no
minimum shareholding requirement has been set for KMP in order to maximise the Company’s opportunity to achieve the
broadest range of diversity at a senior leadership level.
(V) Other transactions with KMP
During the current financial year, there were no other transactions with KMP or their related parties.
(VI) Voting of shareholders at last year’s annual general meeting
IGO Limited received more than 99% of “yes” votes on its Remuneration Report for the 2019 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 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
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
2020
$
2019
$
43,5001
43,500
20,000
20,000
1.
Other services relate to review of the 2019 Sustainability Report, Independent Limited Assurance Report relating to Bidder’s Statement for Panoramic Resources
Ltd, Form 5 Expenditure Audits, BDO Secure Reporting Line and tax services.
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 72.
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 & CEO
Perth, Western Australia
Dated this 26th day of August 2020
70 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 71
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2020
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
DECLARATION OF INDEPENDENCE BY GLYN O'BRIEN TO THE DIRECTORS OF IGO LIMITED
As lead auditor of IGO Limited for the year ended 30 June 2020, 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
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 IGO Limited and the entities it controlled during the period.
Glyn O’Brien
Director
BDO Audit (WA) Pty Ltd
Perth, 26 August 2020
Financial
Report
74
75
76
77
78
128
129
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
72 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2019 — 73
IGO ANNUAL REPORT 2020 — 73
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.
DIRECTORS’ REPORT — REMUNERATION REPORT30 JUNE 2019
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
CONSOLIDATED BALANCE SHEET
FOR THE YEAR ENDED 30 JUNE 2020
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2020
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
Shipping and wharfage costs
Borrowing and finance costs
Impairment of exploration and evaluation expenditure
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 for the period, net of tax
Total comprehensive income for the period
Profit for the period attributable to the members of IGO Limited
Notes
2
3
16
5
2020
$'000
888,930
3,494
(249,486)
(62,511)
(4,489)
33,207
(243,633)
(72,694)
(35,075)
(17,624)
(5,072)
(1,018)
(14,517)
219,512
(64,419)
155,093
(95)
(26)
(121)
154,972
155,093
2019
$'000
784,512
8,377
(262,851)
(52,205)
(3,123)
(6,915)
(237,118)
(58,346)
(30,506)
(18,340)
(6,638)
-
(11,399)
105,448
(29,363)
76,085
(1,054)
(27)
(1,081)
75,004
76,085
Total comprehensive income for the period attributable to the members
of IGO Limited
154,972
75,004
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
26.25
26.13
12.89
12.84
ASSETS
ASSETS
Current assets
Current assets
Cash and cash equivalents
Cash and cash equivalents
Trade and other receivables
Trade and other receivables
Inventories
Inventories
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss
Derivative financial instruments
Derivative financial instruments
Total current assets
Total current assets
Non-current assets
Non-current assets
Receivables
Receivables
Inventories
Inventories
Property, plant and equipment
Property, plant and equipment
Right-of-use assets
Right-of-use assets
Mine properties
Mine properties
Exploration and evaluation expenditure
Exploration and evaluation expenditure
Deferred tax assets
Deferred tax assets
Derivative financial instruments
Derivative financial instruments
Total non-current assets
Total non-current assets
TOTAL ASSETS
TOTAL ASSETS
LIABILITIES
LIABILITIES
Current liabilities
Current liabilities
Trade and other payables
Trade and other payables
Borrowings
Borrowings
Lease liabilities
Lease liabilities
Provisions
Provisions
Total current liabilities
Total current liabilities
Non-current liabilities
Non-current liabilities
Borrowings
Borrowings
Lease liabilities
Lease liabilities
Provisions
Provisions
Deferred tax liabilities
Deferred tax liabilities
Total non-current liabilities
Total non-current liabilities
TOTAL LIABILITIES
TOTAL LIABILITIES
NET ASSETS
NET ASSETS
EQUITY
EQUITY
Contributed equity
Contributed equity
Reserves
Reserves
Retained earnings/(accumulated losses)
Retained earnings/(accumulated losses)
TOTAL EQUITY
TOTAL EQUITY
Consolidated balance sheet
Consolidated balance sheet
As at 30 June 2020
As at 30 June 2020
Notes
Notes
2020
2020
$'000
$'000
2019
2019
$'000
$'000
7
7
8
8
9
9
10
10
21
21
8
8
9
9
13
13
14
14
15
15
16
16
5
5
21
21
11
11
17
17
14
14
12
12
17
17
14
14
12
12
5
5
18
18
19(a)
19(a)
19(b)
19(b)
510,312
510,312
69,065
69,065
75,670
75,670
107,759
107,759
64
64
762,870
762,870
4
4
67,911
67,911
48,580
48,580
38,996
38,996
1,159,621
1,159,621
95,030
95,030
119,734
119,734
284
284
1,530,160
1,530,160
2,293,030
2,293,030
53,013
53,013
56,937
56,937
6,235
6,235
7,058
7,058
123,243
123,243
-
-
33,550
33,550
68,641
68,641
141,787
141,787
243,978
243,978
367,221
367,221
1,925,809
1,925,809
1,897,126
1,897,126
18,874
18,874
9,809
9,809
1,925,809
1,925,809
348,208
348,208
47,748
47,748
70,274
70,274
27,531
27,531
484
484
494,245
494,245
14,998
14,998
52,594
52,594
41,622
41,622
-
-
1,311,376
1,311,376
95,197
95,197
180,237
180,237
-
-
1,696,024
1,696,024
2,190,269
2,190,269
49,902
49,902
56,226
56,226
-
-
5,180
5,180
111,308
111,308
28,363
28,363
-
-
63,626
63,626
137,912
137,912
229,901
229,901
341,209
341,209
1,849,060
1,849,060
1,895,855
1,895,855
15,777
15,777
(62,572)
(62,572)
1,849,060
1,849,060
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes.
IGO Limited
2
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
IGO Limited
IGO Limited
3
3
74 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 75
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2020
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2020
Consolidated statement of changes in equity
For the year ended 30 June 2020
Contributed
equity
$'000
Accumulated
losses
$'000
Hedging
reserve
$'000
Share-
based
payments
reserve
$'000
Foreign
currency
translation
reserve
$'000
Total
equity
$'000
Balance at 1 July 2018
1,879,094
(115,038)
1,393
13,340
38
1,778,827
Profit for the period
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
76,085
-
-
-
(1,054)
-
76,085
(1,054)
-
-
-
-
(23,619)
-
-
-
-
-
-
-
-
3,123
(1,036)
-
-
-
76,085
(1,054)
(27)
(27)
(27)
75,004
-
-
-
-
(23,619)
3,123
-
15,725
Balance at 30 June 2019
1,895,855
(62,572)
339
15,427
11
1,849,060
(Accumulated
losses)/
Retained
earnings
$'000
Contributed
equity
$'000
Share-
based
payments
reserve
$'000
Foreign
currency
translation
reserve
$'000
Hedging
reserve
$'000
Total
equity
$'000
Balance at 1 July 2019
Profit for the period
1,895,855
-
(62,572)
155,093
339
-
15,427
-
11
-
1,849,060
155,093
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
-
-
-
-
-
-
-
(95)
-
155,093
(95)
-
-
-
-
(26)
(95)
(26)
(26)
154,972
(82,712)
-
1,271
-
-
-
-
-
4,489
(1,271)
-
-
-
(82,712)
4,489
-
Consolidated statement of cash flows
For the year ended 30 June 2020
Notes
2020
$'000
2019
$'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 and evaluation
Receipts from other operating activities
Net cash inflow from operating activities
7(a)
Cash flows from investing activities
Payments for property, plant and equipment
Payment for rehabilitation expenditure
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
Proceeds on sale of Stockman Project
Proceeds on sale of Jaguar Operation
Net cash (outflow) from investing activities
Cash flows from financing activities
Repayment of borrowings
Principal element of lease payments
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
17
20
7
888,888
(422,782)
466,106
(3,279)
5,284
(70,594)
-
397,517
(17,052)
(278)
11,466
(67,508)
(54,921)
(3,111)
-
16,060
(115,344)
(28,571)
(5,676)
(82,712)
(116,959)
165,214
348,208
(3,110)
510,312
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
Balance at 30 June 2020
1,897,126
9,809
244
18,645
(15)
1,925,809
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
IGO Limited
4
IGO Limited
5
76 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 77
About this report
About this report
IGO Limited is a company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on
IGO Limited 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 Australian Securities Exchange. The nature of the operations and principal activities of the Group are described in
the directors' report.
the directors' report.
The financial report of IGO Limited (the Company) and its subsidiaries (collectively, the Group) for the year ended 30
The financial report of IGO Limited (the Company) and its subsidiaries (collectively, the Group) for the year ended 30
June 2020 was authorised for issue in accordance with a resolution of the Directors on 25 August 2020.
June 2020 was authorised for issue in accordance with a resolution of the Directors on 25 August 2020.
Basis of preparation
Basis of preparation
This financial report is a general purpose financial report, prepared by a for-profit entity, which:
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
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
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
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board
(IASB);
(IASB);
Has been prepared on a historical cost basis, as modified by the revaluation of financial assets and liabilities
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
(including derivative instruments) at fair value through profit or loss and certain classes of property, plant and
equipment;
equipment;
Is presented in Australian dollars with values rounded to the nearest thousand dollars or in certain cases, the
Is presented in Australian dollars with values rounded to the nearest thousand dollars or in certain cases, the
in accordance with the Australian Securities and Investments Commission 'ASIC Corporation
nearest dollar,
nearest dollar,
in accordance with the Australian Securities and Investments Commission 'ASIC Corporation
Legislative Instrument 2016/191';
Legislative Instrument 2016/191';
Presents comparative information where required for consistency with the current year's presentation; and
Presents comparative information where required for consistency with the current year's presentation; and
Adopts all new and amended Accounting Standards and Interpretations issued by the AASB that are relevant to the
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 2019 as disclosed in note 31.
operations of the Group and effective for reporting periods beginning on or after 1 July 2019 as disclosed in note 31.
•
•
•
•
•
•
•
•
Key estimates and judgements
Key estimates and judgements
In the process of applying the Group's accounting policies, management has made a number of judgements and applied
In the process of applying the Group's accounting policies, management has made a number of judgements and applied
judgement or complexity, or areas where
estimates of
estimates of
judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements, are disclosed in the following notes:
assumptions and estimates are significant to the financial statements, are disclosed in the following notes:
future events. The areas involving a higher degree of
future events. The areas involving a higher degree of
Note 2
Note 2
Note 5
Note 5
Note 8
Note 8
Note 9
Note 9
Note 12
Note 12
Note 13
Note 13
Note 14
Note 14
Note 15
Note 15
Note 16
Note 16
Note 26
Note 26
Revenue
Revenue
Income tax
Income tax
Trade and other receivables
Trade and other receivables
Inventories
Inventories
Provisions
Provisions
Property, plant and equipment
Property, plant and equipment
Leases
Leases
Mine properties
Mine properties
Exploration and evaluation expenditure
Exploration and evaluation expenditure
Share-based payments
Share-based payments
Coronavirus (COVID-19) pandemic
Coronavirus (COVID-19) pandemic
The COVID-19 pandemic has developed rapidly in 2020, with a significant number of cases. Measures taken by various
The COVID-19 pandemic has developed rapidly in 2020, with a significant number of cases. Measures taken by various
governments to contain the virus have affected economic activity. We have taken a number of measures to monitor and
governments to contain the virus have affected economic activity. We have taken a number of measures to monitor and
mitigate the effects of COVID-19, such as safety and health measures for our people and securing the supply of
mitigate the effects of COVID-19, such as safety and health measures for our people and securing the supply of
materials that are essential to our production process.
materials that are essential to our production process.
At this stage, the impact on our business and results has not been significant and, based on our experience to date, we
At this stage, the impact on our business and results has not been significant and, based on our experience to date, we
expect this to remain the case. We will continue to follow the various government policies and advice and, in parallel, we
expect this to remain the case. We will continue to follow the various government policies and advice and, in parallel, we
will do our utmost to continue our operations in the best and safest way possible without jeopardising the health of our
will do our utmost to continue our operations in the best and safest way possible without jeopardising the health of our
people.
people.
Basis of consolidation
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group. A list of controlled entities
The consolidated financial statements comprise the financial statements of the Group. A list of controlled entities
(subsidiaries) at year end is contained in note 23.
(subsidiaries) at year end is contained in note 23.
The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using
The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using
consistent accounting policies.
Basis of consolidation (continued)
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
is disposed. The acquisition of subsidiaries is
the date on which control
accounted for using the acquisition method of accounting.
IGO Limited
IGO Limited
is obtained to the date on which control
6
6
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
15 Mine properties
16 Exploration and evaluation
Leases
CAPITAL STRUCTURE AND FINANCING ACTIVITIES
17 Borrowings
18 Contributed equity
19 Reserves and retained earnings/(accumulated losses)
20 Dividends paid and proposed
RISK
21 Derivatives
22 Financial risk management
GROUP STRUCTURE
23 Subsidiaries
OTHER INFORMATION
24 Commitments and contingencies
25 Events occurring after the reporting period
26 Share-based payments
27 Related party transactions
28 Parent entity financial information
29 Deed of cross guarantee
30 Remuneration of auditors
31 Summary of significant accounting policies
80
80
83
84
84
85
88
89
89
90
91
92
92
92
94
94
95
98
100
101
101
102
104
105
106
106
107
115
115
116
116
117
117
121
122
123
125
125
78 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 79
IGO Limited
7
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
Financial Performance
This section of the notes includes segment information and provides further information on key line items relevant to
financial performance that the Directors consider most relevant, including accounting policies, key judgements and
estimates relevant to understanding these items.
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 Long Operation was placed in care and
maintenance in June 2018 and subsequently sold effective 31 May 2019.
The Nova Operation produces nickel and copper concentrates. Revenue is derived primarily from the sale of these
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 IGO 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 and feasibility studies, and the Head of Corporate Development is responsible for budgets
and expenditure relating to 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 separate segment.
Total segment revenue
593,274
290,078
Segment operating profit/(loss) before income tax
SPACE
Total segment assets
182,173
101,371
1,181,867
357,643
1
Segment information (continued)
(b) Segment results
Year ended 30 June 2020
Nickel revenue
Gold revenue
Copper revenue
Silver revenue
Cobalt revenue
Shipping and insurance service revenue
Other revenue
SPACE
Total segment liabilities
SPACE
Acquisition of property, plant and equipment
SPACE
Depreciation and amortisation
Impairment of assets
SPACE
Other non-cash expenses
Year ended 30 June 2019
Nickel revenue
Gold revenue
Copper revenue
Cobalt revenue
Silver revenue
Shipping and insurance service revenue
Other revenue
Total segment revenue
Notes to the consolidated financial statements
30 June 2020
(continued)
Nova
Operation
$'000
Tropicana
Operation
$'000
Long
Operation
$'000
Growth
$'000
Total
$'000
452,628
-
102,619
1,240
18,727
4,925
13,135
-
288,670
-
1,408
-
-
-
92,862
57,785
6,913
7,390
168,086
72,434
-
522
-
347
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
452,628
288,670
102,619
2,648
18,727
4,925
13,135
883,352
(75,228)
208,316
95,426 1,634,936
2,940
153,587
-
14,303
18
240,538
1,018
1,018
-
869
Nova
Operation
$'000
Tropicana
Operation
$'000
Long
Operation
$'000
Growth
$'000
389,105
-
96,781
27,218
953
5,336
(17,502)
-
277,429
-
-
1,051
-
-
501,891
278,480
-
-
-
-
-
-
(1,189)
(1,189)
-
-
-
-
-
-
3
3
Total
$'000
389,105
277,429
96,781
27,218
2,004
5,336
(18,688)
779,185
Segment net operating profit/(loss) before income tax
SPACE
Total segment assets
SPACE
Total segment liabilities
SPACE
Acquisition of property, plant and equipment
SPACE
Depreciation and amortisation
SPACE
Other non-cash expenses
95,365
97,627
(1,400)
(59,148)
132,444
1,193,096
314,990
66,996
41,491
11,315
2,531
160,456
74,731
956
401
-
-
125
681
59
95,551 1,603,637
2,107
110,594
-
13,971
44
235,912
-
1,416
IGO Limited
9
IGO Limited
10
80 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 81
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
Notes to the consolidated financial statements
30 June 2020
(continued)
1
Segment information (continued)
(c) Segment revenue
1
Segment information (continued)
(f) Segment liabilities
A reconciliation of reportable segment revenue to total revenue is as follows:
A reconciliation of reportable segment liabilities to total liabilities is as follows:
Total revenue for reportable segments
Other revenue from continuing operations
Total revenue
2020
$'000
883,352
5,578
888,930
2019
$'000
779,185
5,327
784,512
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.
(d) Segment net profit before income tax
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 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 corporate assets
Total profit before income tax
(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
2020
$'000
208,316
5,578
33,207
(4,489)
(20,710)
(2,765)
(3,095)
3,470
219,512
2019
$'000
132,444
5,327
(6,915)
(3,123)
(18,445)
(5,222)
(1,205)
2,587
105,448
2020
$'000
2019
$'000
1,634,936
1,603,637
119,734
107,759
418,642
11,959
180,237
27,531
373,433
5,431
2,293,030
2,190,269
IGO Limited
11
82 — IGO ANNUAL REPORT 2020
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
Corporate lease liabilities
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
Total revenue
(a) Recognition and measurement
2020
$'000
2019
$'000
153,587
110,594
141,787
4,741
4,779
56,937
5,390
367,221
2020
$'000
865,292
4,925
870,217
6,096
-
12,617
18,713
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)
888,930
784,512
(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
lading received, or delivered to the
terms, generally being when the product is loaded onto the ship and bill of
customer's premises. In cases where control of the 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 and this is when the performance obligation is met.
the
The price to be received on sales of concentrate is provisionally priced and recognised at
consideration receivable that is highly probable of not reversing by reference to the relevant contractual price and the
Notes to the consolidated financial statements
estimated mineral specifications, net of treatment and refining charges where applicable. Subsequently, provisionally
30 June 2020
priced sales are repriced at each reporting period up until when final pricing and settlement is confirmed, with revenue
(continued)
adjustments relating to the quality and quantity of commodities sold being recognised in sales revenue.
the estimate of
Provisionally priced sales for which price finalisation is referenced to the relevant metal price index have an embedded
2 Revenue (continued)
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.
(a) Recognition and measurement (continued)
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
IGO Limited
12
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.
IGO ANNUAL REPORT 2020 — 83
(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.
(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 investments
Write-back of rehabilitation provision
Net gain on sale of subsidiaries
2020
$'000
1,529
1,965
-
-
-
3,494
2019
$'000
1,967
2,636
-
1,187
2,587
8,377
IGO Limited
13
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
2 Revenue (continued)
(a) Recognition and measurement (continued)
Notes to the consolidated financial statements
30 June 2020
(continued)
Sale of gold bullion
Revenue from the sale of gold bullion is recognised when control of the inventory has transferred to the customer, being
2 Revenue (continued)
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.
(a) Recognition and measurement (continued)
(ii) Revenue from Services - Shipping and Insurance
Sale of gold bullion
Sales of nickel and copper concentrates are on terms that include the Group being responsible for shipping and
Revenue from the sale of gold bullion is recognised when control of the inventory has transferred to the customer, being
insurance costs. Shipping and insurance is a separate performance obligation from the sale of the commodity with the
when the gold is credited to the metals account of the customers. It is at this point that control over the gold bullion has
revenue allocated to shipping and insurance being recognised over the period of transfer to the customer.
been passed to the customer and the Group has fulfilled its performance obligation under the contract.
(iii) Provisional pricing adjustments
(ii) Revenue from Services - Shipping and Insurance
The Group’s sales contracts may provide for provisional pricing of sales at the time the product is delivered to the vessel
Sales of nickel and copper concentrates are on terms that include the Group being responsible for shipping and
with final pricing determined using the index on or after the vessel’s arrival to the port of discharge. This provisional
insurance costs. Shipping and insurance is a separate performance obligation from the sale of the commodity with the
pricing relates to the quality and quantity of the commodity sold, which is included in sales revenue, and an embedded
revenue allocated to shipping and insurance being recognised over the period of transfer to the customer.
derivative relating to the pricing of the commodity sold. Provisional pricing adjustments relating to the embedded
(iii) Provisional pricing adjustments
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
The Group’s sales contracts may provide for provisional pricing of sales at the time the product is delivered to the vessel
and recognised at fair value through profit or loss. These amounts are disclosed separately as Provisional pricing
with final pricing determined using the index on or after the vessel’s arrival to the port of discharge. This provisional
adjustments in Other revenue, rather than being included within Sales revenue for the Group.
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
(iv) Interest revenue
derivative are separately identified as movements in the financial instrument rather than being included within Sales
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating
revenue. The final pricing adjustment mechanism, being an embedded derivative, is separated from the host contract
the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective
and recognised at fair value through profit or loss. These amounts are disclosed separately as Provisional pricing
interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
adjustments in Other revenue, rather than being included within Sales revenue for the Group.
financial asset to the net carrying amount of the financial asset.
(iv) Interest revenue
(b) Key estimates and judgements
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
Judgement is exercised in estimating variable consideration. This is determined by past experience with respect to the
interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the
goods returned to the Group where the customer maintains a right of return pursuant to the customer contract or where
financial asset to the net carrying amount of the financial asset.
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
(b) Key estimates and judgements
uncertainty associated with the variable consideration is subsequently resolved.
Judgement is exercised in estimating variable consideration. This is determined by past experience with respect to the
3 Other income
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
2019
that a significant reversal in the amount of cumulative revenue recognised under the contract will not occur when the
$'000
uncertainty associated with the variable consideration is subsequently resolved.
Net foreign exchange gains
3 Other income
Net gain on disposal of property, plant and equipment
Net gain on sale of investments
Write-back of rehabilitation provision
Net gain on sale of subsidiaries
Net foreign exchange gains
Net gain on disposal of property, plant and equipment
Net gain on sale of investments
Write-back of rehabilitation provision
Expenses and losses
4
Net gain on sale of subsidiaries
1,967
2,636
-
2019
1,187
$'000
Notes to the consolidated financial statements
2,587
30 June 2020
1,967
(continued)
8,377
2,636
-
1,187
2,587
-
1,529
1,965
2020
-
$'000
-
-
3,494
1,529
1,965
-
-
2020
$'000
Cost of sale of goods
Employee benefits expenses
Share-based payments expense
Exploration and evaluation expense
Impairment of exploration and evaluation expenditure
Net foreign exchange losses
Amortisation expense
Depreciation expense
Borrowing and finance costs
IGO Limited
Borrowing and finance costs - other entities
Lease interest expense
Rehabilitation and restoration borrowing costs
Amortisation of borrowing costs
IGO Limited
Finance costs expensed
3,494
2020
$'000
348,739
62,511
4,489
72,694
1,018
2,865
227,146
16,487
1,761
1,523
869
919
5,072
8,377
2019
$'000
327,569
52,205
3,123
58,346
-
-
228,121
8,997
13
4,306
-
1,416
916
13
6,638
Notes to the consolidated financial statements
30 June 2020
(continued)
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
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 reported in equity
(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% (2019: 30%)
Tax effect of amounts which are not deductible (taxable)
in calculating taxable income:
Share-based payments
Other non-deductible items
Non-assessable gain on disposal of subsidiary
Subtotal
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
Research and development tax credit
Adjustment for deferred tax asset not previously brought to account
Income tax expense
2020
$'000
64,419
-
64,419
60,503
3,916
64,419
2019
$'000
29,363
-
29,363
24,204
5,159
29,363
(41)
(41)
(452)
(452)
2020
$'000
219,512
65,854
2019
$'000
105,448
31,634
789
494
-
317
519
(811)
67,137
31,659
466
(145)
4
12
-
(540)
(2,515)
64,419
16
(27)
7
20
(2,312)
-
-
29,363
IGO Limited
15
84 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 85
IGO Limited
14
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
Notes to the consolidated financial statements
30 June 2020
(continued)
5
Income tax (continued)
(d) Reconciliation of carry forward tax losses and income tax paid
5
Income tax (continued)
(f) Tax losses
Tax effected balances at 30%
Carry forward tax losses at the beginning of the year
Tax losses recouped from current year
Carry forward tax losses at the end of the year
2020
$'000
154,388
(62,658)
91,730
2019
$'000
180,695
(26,307)
154,388
Effective income tax rate based on income tax paid
-%
-%
(e) Deferred tax assets and liabilities
Balance Sheet
Profit or loss
Equity
2020
$'000
2019
$'000
2020
$'000
2019
$'000
2020
$'000
2019
$'000
Disposal of
Subsidiary
2020
$'000
2019
$'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
(4,991)
(121,980)
(2,163)
(128,960)
2,828
(6,980)
(3,319)
7,926
(783)
(1,673)
(890)
1,673
(104)
(4,266)
(2,011)
(7,652)
(145)
(2,852)
(1,815)
(304)
-
1,414
196
7,348
3,916
-
246
(90)
(1,277)
5,159
Gross deferred tax liabilities
(141,787)
(137,912)
Deferred tax assets
Property, plant and
equipment
Business-related capital
allowances
Provision for employee
entitlements
Provision for rehabilitation
Leased assets
Carry forward tax losses
Other
-
-
-
(967)
1,441
1,831
390
1,762
2,730
19,980
237
91,730
3,616
1,910
18,732
-
154,388
3,376
(820)
(1,248)
(237)
62,658
(240)
(172)
(1,701)
-
26,307
(1,025)
Gross deferred tax assets
119,734
180,237
60,503
24,204
-
-
-
(41)
-
-
-
(41)
-
-
-
-
-
-
-
-
-
-
-
(452)
-
-
-
(452)
-
-
-
-
-
-
-
-
Net impact
(22,053)
42,325
64,419
29,363
(41)
(452)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,567
-
-
-
-
-
-
1,567
1,481
-
-
1,349
-
-
-
2,830
4,397
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% (2019: 30%)
Unrecognised capital tax losses
Potential tax benefit @ 30% (2019: 30%)
(g) Tax transparency code
2020
$'000
46,775
14,032
93,135
27,941
2019
$'000
46,775
14,032
85,546
25,664
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 2019 Tax
Transparency Report. In relation to the year ended 30 June 2020, the Part A and Part B disclosures will be addressed in
the Group's 2020 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.
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.
IGO Limited
9
IGO Limited
17
86 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 87
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
5
Income tax (continued)
(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
$91,730,000 at 30 June 2020 (2019: $154,388,000). 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
$155,093,000 (2019: $76,085,000).
(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
2020
Number
2019
Number
590,747,969
590,335,278
2,894,952
2,524,470
593,642,921
592,859,748
Share rights
Performance 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 26.
(d) Calculation of earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
•
•
the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares,
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.
Notes to the consolidated financial statements
30 June 2020
(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
2020
$'000
490,312
20,000
510,312
2019
$'000
108,208
240,000
348,208
The Group has cash balances of $7,396,000 (2019: $1,633,000) 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 22.
(a) Reconciliation of profit after income tax to net cash inflow from operating activities
Profit for the period
Depreciation and amortisation
Impairment of exploration and evaluation expenditure
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 losses (gains) on cash balances
Change in fair value measurement of receivables
Change in operating assets and liabilities:
(Increase) decrease in trade receivables
(Increase) in inventories
Decrease in deferred tax assets
(Increase) decrease in other operating receivables and prepayments
Increase (decrease) in trade and other payables
Increase in deferred tax liabilities
Increase in other provisions
2020
$'000
155,093
243,633
1,018
(3,494)
(33,207)
4,489
-
919
(78)
3,110
(1,065)
(21,215)
(20,713)
60,503
(116)
1,120
3,916
3,604
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
Net cash inflow from operating activities
397,517
372,310
(b) Non-cash investing and financing activities
During the current year, the Group had acquisitions of right-of-use assets totalling $12,577,000 (2019: $nil).
During the previous year, the Company issued 3,095,408 shares totalling $15,725,000 for the acquisition of the
Southern Hills tenements (refer to note 18(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 previous year.
IGO Limited
88 — IGO ANNUAL REPORT 2020
18
IGO Limited
19
IGO ANNUAL REPORT 2020 — 89
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
Notes to the consolidated financial statements
30 June 2020
(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 (continued)
(b) Key estimates and judgements
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and 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, historical collection rates, the
impact of the COVID-19 pandemic and forward-looking information that is available. The allowance for expected credit
losses is calculated based on the information available at the time of preparation. The actual credit losses in future
years may be higher or lower.
8
Trade and other receivables
Current
Trade receivables at amortised cost:
Trade receivables (subject to provisional pricing) - fair value
GST Receivable
Other receivables
Prepayments
Non-current
Other receivables
2020
$'000
2019
$'000
46,595
1,726
17,585
3,159
69,065
24,568
2,463
18,556
2,161
47,748
4
4
14,998
14,998
(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 value
(using a discount rate of 3.5%) of the outstanding cash proceeds of $15,519,000 (2019: $15,519,000) is shown in
current receivables. There are no amounts relating to the sale of the Jaguar Operation shown in non-current receivables
at 30 June 2020 (2019: $14,994,000).
(iii)
Impairment and risk exposure
Note 22(b)(i) sets out information about the impairment of financial assets and the Group's exposure to credit risk. Given
the Group's credit risk management processes, the resulting level of expected credit losses are insignificant.
IGO Limited
20
90 — IGO ANNUAL REPORT 2020
9
Inventories
Current
Mine spares and stores
ROM inventory
Concentrate inventory
Gold in circuit
Gold dore
Non-current
ROM inventory
2020
$'000
20,653
44,656
5,452
1,980
2,929
75,670
2019
$'000
19,023
32,866
12,006
1,454
4,925
70,274
67,911
67,911
52,594
52,594
(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
Notes to the consolidated financial statements
realisable value when an impairment indicator is present.
30 June 2020
(continued)
(c) Key estimates and judgements
Inventories (continued)
The Group reviews the carrying value of inventories regularly to ensure that their cost does not exceed net realisable
9
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
(c) Key estimates and judgements (continued)
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.
10 Financial assets at fair value through profit or loss
Shares in listed companies - at fair value through profit or loss
2020
$'000
107,759
2019
$'000
27,531
107,759
27,531
IGO ANNUAL REPORT 2020 — 91
(i) Amounts recognised in profit or loss
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. During the current year, the changes in fair values of financial assets resulted
in a gain to the profit or loss of $33,207,000 (2019: loss of $6,915,000).
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
(ii) Recognition and measurement
note 22(d) for fair value measurement.
11 Trade and other payables
Current liabilities
Trade and other payables
(a) Recognition and measurement
2020
$'000
53,013
53,013
2019
$'000
49,902
49,902
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.
IGO Limited
22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 12 Provisions
Current
Provision for employee entitlements
Non-current
Provision for employee entitlements
Provision for rehabilitation costs
(a) Movements in provisions
Notes to the consolidated financial statements
30 June 2020
(continued)
2020
$'000
7,058
7,058
2020
$'000
2,042
66,599
68,641
2019
$'000
5,180
5,180
2019
$'000
1,185
62,441
63,626
Notes to the consolidated financial statements
30 June 2020
(continued)
Movements in the provision for rehabilitation costs during the financial year are set out below:
9
Inventories (continued)
(c) Key estimates and judgements (continued)
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.
10 Financial assets at fair value through profit or loss
Shares in listed companies - at fair value through profit or loss
2020
$'000
107,759
107,759
2019
$'000
27,531
27,531
(i) Amounts recognised in profit or loss
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. During the current year, the changes in fair values of financial assets resulted
in a gain to the profit or loss of $33,207,000 (2019: loss of $6,915,000).
(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 22(d) for fair value measurement.
11 Trade and other payables
Current liabilities
Trade and other payables
(a) Recognition and measurement
2020
$'000
53,013
53,013
2019
$'000
49,902
49,902
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which
Notes to the consolidated financial statements
are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables
30 June 2020
are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are
(continued)
recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.
12 Provisions
Current
Provision for employee entitlements
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:
IGO Limited
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
2020
$'000
7,058
7,058
2020
$'000
2,042
66,599
68,641
2020
$'000
62,441
3,567
869
(278)
-
-
66,599
2019
$'000
5,180
5,180
2019
$'000
1,185
62,441
63,626
22
2019
$'000
61,267
5,564
1,416
(122)
(4,497)
(1,187)
62,441
(b) Recognition and measurement
92 — IGO ANNUAL REPORT 2020
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.
(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 within Borrowing and finance costs in the profit or loss). 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
employees.
The provision for employee benefits represents annual
leave and long service leave entitlements accrued by
IGO Limited
23
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
12 Provisions (continued)
(b) Recognition and measurement
(b) Recognition and measurement (continued)
2020
$'000
2019
$'000
61,267
5,564
1,416
(122)
Notes to the consolidated financial statements
30 June 2020
(4,497)
(continued)
(1,187)
62,441
3,567
869
(278)
-
-
66,599
62,441
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is
(ii) Employee benefits (continued)
probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Short-term obligations
Provisions are not recognised for future operating losses.
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the
months after the end of the period in which the employees render the related service, are recognised in respect of
present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax
employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when
rate that reflects current market assessments of the time value of money and the risks specific to the liability.
the liabilities are settled. The amounts are presented as current employee entitlements in the balance sheet.
(i) Rehabilitation and restoration
Other long-term employee benefit obligations
Long-term environmental obligations are based on the Group’s environmental management plans, in compliance with
The liabilities for long service leave and annual leave that are not expected to be settled wholly within 12 months after
current environmental and regulatory requirements.
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.
Full provision is made based on the net present value of
the estimated cost of rehabilitating and restoring the
Consideration is given to expected future wage and salary levels, experience of employee departures and periods of
environmental disturbance that has occurred up to the reporting date. To the extent that future economic benefits are
service. Expected future payments are discounted using market yields at the end of the reporting period of government
expected to arise, these costs are capitalised and amortised over the remaining lives of the mines.
the estimated future cash outflows.
bonds with terms and currencies that match, as closely as possible,
Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profit
Annual increases in the provision relating to the change in the net present value of the provision are recognised as
Notes to the consolidated financial statements
or loss.
finance costs (and disclosed within Borrowing and finance costs in the profit or loss). The estimated costs of
30 June 2020
technology or other
rehabilitation are reviewed annually and adjusted as appropriate for changes in legislation,
(continued)
The obligations are presented as current liabilities in the consolidated balance sheet if the entity does not have an
circumstances. Cost estimates are not reduced by the potential proceeds from the sale of assets or from plant clean-up
unconditional right to defer settlement for at least twelve months after the reporting date, regardless of when the actual
at closure.
settlement is expected to occur.
12 Provisions (continued)
(ii) Employee benefits
(c) Key estimates and judgements
(b) Recognition and measurement (continued)
The provision for employee benefits represents annual
employees.
Rehabilitation and restoration provisions
(ii) Employee benefits (continued)
The provision for rehabilitation and restoration costs is based on the net present value of the estimated cost of
Short-term obligations
rehabilitating and restoring the environmental disturbance that has occurred up to the reporting date. Significant
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12
estimates and assumptions are made in determining the provision for mine rehabilitation as there are numerous factors
months after the end of the period in which the employees render the related service, are recognised in respect of
that will affect the ultimate liability payable. These factors include estimates of the extent and costs of rehabilitation
employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when
activities, technological changes, regulatory changes, cost increases as compared to the inflation rates and changes in
the liabilities are settled. The amounts are presented as current employee entitlements in the balance sheet.
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
IGO Limited
23
Other long-term employee benefit obligations
rehabilitation costs required.
The liabilities for long service leave and annual leave that are not expected to be settled wholly within 12 months after
Long service leave
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.
Long service leave is measured at the present value of benefits accumulated up to the end of the reporting period. The
Consideration is given to expected future wage and salary levels, experience of employee departures and periods of
liability is discounted using an appropriate discount
to determine key
service. Expected future payments are discounted using market yields at the end of the reporting period of government
assumptions used in the calculation, including future increases in salaries and wages, future on-costs rates and future
the estimated future cash outflows.
bonds with terms and currencies that match, as closely as possible,
settlement dates of employees' departures.
Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profit
or loss.
leave and long service leave entitlements accrued by
requires judgement
rate. Management
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
to determine key
liability is discounted using an appropriate discount
assumptions used in the calculation, including future increases in salaries and wages, future on-costs rates and future
settlement dates of employees' departures.
requires judgement
rate. Management
IGO Limited
24
IGO ANNUAL REPORT 2020 — 93
IGO Limited
24
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
Notes to the consolidated financial statements
30 June 2020
(continued)
Invested Capital
This section of the notes provides further information about property, plant and equipment, leases, 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
26,916
(17,015)
9,901
36,209
(16,974)
19,235
16,960
(10,455)
6,505
4,896
(4,143)
753
10,706
1,409
-
(2,681)
467
9,901
15,681
7,033
(73)
(5,143)
1,737
19,235
5,104
2,108
(1)
(1,812)
1,106
6,505
805
334
-
(386)
-
753
12,186
-
12,186
9,326
6,170
-
-
(3,310)
12,186
Total
$'000
97,167
(48,587)
48,580
41,622
17,054
(74)
(10,022)
-
48,580
25,040
(14,334)
10,706
27,670
(11,989)
15,681
14,118
(9,014)
5,104
4,589
(3,784)
805
9,326
-
9,326
80,743
(39,121)
41,622
12,663
667
-
(2,741)
117
-
10,706
13,548
4,344
(632)
(4,288)
3,178
(469)
15,681
4,132
1,742
-
(1,493)
756
(33)
5,104
1,013
293
-
(475)
22
(48)
805
4,061
9,338
-
-
(4,073)
-
9,326
35,417
16,384
(632)
(8,997)
-
(550)
41,622
Year ended 30 June 2020
Cost
Accumulated depreciation
Net book amount
Movements
Opening net book amount
Additions
Disposals
Depreciation charge
Transfers
Closing net book amount
Year ended 30 June 2019
Cost
Accumulated depreciation
Net book amount
Movements
Opening net book amount
Additions
Disposals
Depreciation charge
Transfers
Disposal of subsidiary
Closing net book amount
(a) Non-current assets pledged as security
Refer to note 17 for information on non-current assets pledged as security by the Group.
(b) Recognition and measurement
Property, plant and equipment are stated at historical cost less accumulated depreciation. 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.
13 Property, plant and equipment (continued)
(b) Recognition and measurement (continued)
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).
14 Leases
(a) Amounts recognised in the balance sheet
The balance sheet shows the following amounts relating to leases:
Right-of-use assets
Buildings
Mining plant and equipment
Lease liabilities
Current
Non-current
2020
$'000
5,339
33,657
38,996
6,235
33,550
39,785
1 July
2019*
$'000
2,812
30,072
32,884
4,979
27,905
32,884
26
IGO Limited
25
IGO Limited
94 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 95
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
Notes to the consolidated financial statements
30 June 2020
(continued)
14 Leases (continued)
* In the previous financial year, leases were accounted for by applying the principles of AASB 117 Leases, which
classified arrangements as either finance leases or operating leases. From 1 July 2019,
the Group changed its
accounting policy so that leases are recognised by applying the principles of AASB 16 Leases. Under the new standard,
leases are recognised as right-of use assets with corresponding lease liabilities. Refer to note 31(a) for details of the
impact on the Group on adoption of the standard.
Additions to the right-of use assets during the year were $12,577,000.
(b) Amounts recognised in the statement of profit or loss
The statement of profit or loss shows the following amounts relating to leases:
Depreciation charge of right-of-use assets
Buildings
Mining plant and equipment
Interest expense (included in borrowing and finance costs)
Space
The total cash outflow for leases for the financial year to 30 June 2020 was $7,199,000.
(c) Recognition and measurement
2020
$'000
1,534
4,931
6,465
1,523
2019
$'000
-
-
-
-
The Group leases office space and equipment. Rental contracts are typically made for fixed periods of 5 to 15 years, but
may have extension options as described below.
Contracts may contain both lease and non-lease components. The Group allocated the consideration in the contract to
the lease and non-lease components based on their relative stand-alone prices.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants other than the security interests in the leased assets that are held by the
lessor. Leased assets may not be used as security for borrowing purposes.
Lease liabilities
Liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present
value of the following payments:
•
•
•
•
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable;
variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the
commencement date;
amounts expected to be payable by the Group under residual value guarantees;
the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the
liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined,
which is generally the case for leases in the Group, an arm's length asset finance facility borrowing rate is used, being
the rate that the individual lessee would have to pay to finance the asset of similar value to the right-of-use asset in a
similar economic environment with similar terms, security and conditions. The weighted average borrowing rate used for
the year was 4.1%.
Subsequent to initial recognition, lease liabilities are carried at amortised cost. Lease payments are allocated between
principal and finance costs. The finance cost is charged to profit or loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability for each period.
14 Leases (continued)
(c) Recognition and measurement (continued)
Right-of-use assets
Right-of-use assets are measured at cost and comprise the following:
•
•
•
•
the amount of the initial amount of lease liability;
any lease payments made at or before the commencement date, less any lease incentives received;
any initial direct costs; and
restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset's useful
life and the lease term on a
straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated
over the underlying asset's useful life.
Short-term leases and leases of low value assets
Payments associated with short-term leases of equipment and all
straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
leases of low-value assets are recognised on a
Extension and termination options
Extension and termination options are included in a number of property and equipment leases across the Group. These
are used to maximise operational flexibility in terms of managing the assets used in the Group's operations. The
majority of extension and termination options held are exercisable only by the Group and not by the respective lessor.
(d) Key estimates and judgements
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability.
Judgement is exercised in determining whether there is reasonable certainty that an option to extend the lease or
purchase the underlying asset will be exercised, or an option to terminate the lease will not be exercised, when
ascertaining the periods to be included in the lease term. In determining the lease term, all facts and circumstances that
create an economical incentive to exercise an extension option, or not to exercise a termination option, are considered
at
to the Group's
operations; comparison of terms and conditions to prevailing market rates; incurrence of significant penalties; existence
of significant leasehold improvements; and the costs and disruption to replace the asset. The Group reassesses
whether it is reasonably certain to exercise an extension option, or not exercise a termination option, if there is a
significant event or significant change in circumstances.
the lease commencement date. Factors considered may include the importance of
the asset
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to
discount future lease payments to measure the present value of the lease liability at the lease commencement date.
Such a rate is based on what the Group estimates it would have to pay to finance an asset of a similar value to the
right-of-use asset, with similar terms, security and economic environment.
IGO Limited
27
IGO Limited
28
96 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 97
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 15 Mine properties
Year ended 30 June 2020
Cost
Accumulated amortisation
Net book amount
Notes to the consolidated financial statements
30 June 2020
(continued)
Mine
properties in
development
$'000
Mine
properties in
production
$'000
Deferred
stripping
$'000
Total mine
properties
$'000
19,022
-
19,022
1,742,936
(647,022)
1,095,914
235,855
(191,170)
1,997,813
(838,192)
44,685
1,159,621
Movements
Carrying amount at beginning of the period
Additions
Transfers from exploration and evaluation expenditure
Amortisation expense
Closing net book amount
4,271
12,491
2,260
-
1,255,493
22,815
-
(182,394)
51,612
37,825
-
(44,752)
1,311,376
73,131
2,260
(227,146)
19,022
1,095,914
44,685
1,159,621
Year ended 30 June 2019
Cost
Accumulated amortisation
Net book amount
Movements
Carrying amount at beginning of the period
Additions
Transfers from exploration and evaluation expenditure
Amortisation expense
Closing net book amount
(a) Recognition and measurement
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
(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.
(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 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
Notes to the consolidated financial statements
30 June 2020
(continued)
15 Mine properties (continued)
(a) Recognition and measurement (continued)
(ii) Mine properties in production (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 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 Group prepares ore reserve estimates in accordance with the JORC Code 2012, guidelines prepared by the Joint
Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists
and Minerals Council of Australia. The estimate of these proved and probable ore reserves, by their very nature, require
judgements, estimates and assumptions.
Where the proved and probable reserve estimates need to be modified, the amortisation expense is accounted for
prospectively from the date of the assessment until the end of the revised mine life (for both the current and future
years).
(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.
IGO Limited
29
IGO Limited
30
98 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 99
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
Notes to the consolidated financial statements
30 June 2020
(continued)
16 Exploration and evaluation
Year ended 30 June 2020
Opening net book amount
Additions
Transfer to mine properties under
construction
Impairment loss
Closing net book amount
Year ended 30 June 2019
Opening net book amount
Additions*
Transfer to mine properties under
construction
Nova
Operation
$'000
Windward
$'000
Stockman
Project
$'000
34,100
-
-
-
34,100
17,823
-
-
(1,018)
16,805
13,052
-
-
-
13,052
31,073
34,100
-
17,823
-
13,052
-
-
-
-
Other
$'000
30,222
3,111
(2,260)
-
5,518
27,478
(2,774)
30,222
Total
$'000
95,197
3,111
(2,260)
(1,018)
95,030
70,493
27,478
(2,774)
95,197
Closing net book amount
34,100
17,823
13,052
* Additions during the previous financial year includes $22,243,000 relating to acquisition of
tenements which are contiguous to the Nova Mining Lease.
the Southern Hills
(a)
Impairment
The Group recognised impairment charges during the current reporting period of $1,018,000 (2019: $nil) relating to the
relinquishment of tenements.
(b) Recognition and measurement
Exploration for and evaluation of mineral resources is the search for mineral resources after the entity has obtained
legal rights to explore in a specific area, as well as the determination of the technical feasibility and commercial viability
of extracting the mineral resource.
Exploration and evaluation expenditure is expensed to the profit or
circumstances in which case the expenditure may be capitalised:
loss as incurred except
in the following
•
•
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.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest. An impairment exists when the carrying value of expenditure exceeds its
estimated recoverable amount. The area of interest is then written down to its recoverable amount and the impairment
losses are recognised in profit or loss.
Upon approval for the commercial development of an area of interest, exploration and evaluation assets are tested for
impairment and transferred to 'Mine properties in development'. No amortisation is charged during the exploration and
evaluation phase.
(c) Key estimates and judgements
The recoverability of the carrying amount of the exploration and evaluation assets is dependent on the successful
development and commercial exploitation, or alternatively, sale of the respective area of interest.
The Group reviews the carrying value of exploration and evaluation expenditure on a regular basis to determine whether
economic quantities of reserves have been found or whether further exploration and evaluation work is underway or
planned to support continued carry forward of capitalised costs. This assessment requires judgement as to the status of
the individual projects and their estimated recoverable amount.
100 — IGO ANNUAL REPORT 2020
Capital structure and financing activities
This section of the notes provides further information about the Group's borrowings, contributed equity, reserves,
retained earnings/(accumulated losses) and dividends, including accounting policies relevant to understanding these
items.
17 Borrowings
Current
Unsecured
Bank loans
Total current borrowings
Non-current
Unsecured
Bank loans
Total non-current borrowings
(a) Corporate loan facility
2020
$'000
2019
$'000
56,937
56,937
56,226
56,226
-
-
28,363
28,363
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 $57,145,000 which expires
in September 2020.
In response to the COVID-19 outbreak, and as a precautionary measure, the Group proactively sought to defer the
payment of the scheduled debt repayment due in March 2020 to 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 2020, a
balance of unamortised transaction costs of $208,000 (2019: $1,127,000) was offset against the bank loans contractual
liability of $57,145,000 (2019: $85,716,000). Total capitalised transaction costs to 30 June 2020 are $5,495,000 (2019:
$5,495,000).
Notes to the consolidated financial statements
The Facility Agreement has certain financial covenants that the Company has to comply with. All such financial
30 June 2020
covenants have been complied with in accordance with the Facility Agreement.
(continued)
(b) Assets pledged as security
There were no assets pledged as security at 30 June 2020 (2019: $nil).
17 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
IGO Limited
2020
$'000
57,145
1,211
58,356
57,145
1,211
58,356
2019
$'000
85,716
1,131
86,847
85,716
1,131
86,847
33
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
transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
fair value, net of
IGO ANNUAL REPORT 2020 — 101
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
Other borrowing costs are expensed in the period in which they are incurred.
intended use or sale.
18 Contributed equity
(a) Share capital
Fully paid issued capital
2020
$'000
2019
$'000
1,897,126
1,895,855
IGO Limited
34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
17 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
2020
$'000
57,145
1,211
58,356
2019
$'000
85,716
1,131
86,847
85,716
Notes to the consolidated financial statements
1,131
30 June 2020
(continued)
86,847
57,145
1,211
58,356
17 Borrowings (continued)
1. This facility provides financial backing in relation to non-performance of third party guarantee requirements.
(d) Recognition and measurement
(c) Financing arrangements
18 Contributed equity (continued)
(c) Capital management
Notes to the consolidated financial statements
30 June 2020
(continued)
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
2020
6.2
3%
52%
2019
4.4
5%
43%
The Group's capital comprises equity, including reserves, and net debt/(cash). As at 30 June 2020 this totalled
$1,472,643,000 (2019: $1,586,568,000), a decrease of 7% over 2019. Contributing to this decrease was an ongoing
reduction of debt as a result of debt repayments of $28,571,000 during the year and the strong continued 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:
•
•
•
•
the Company's operations are able to generate cash flows safely, at appropriate margins, and
Ensure that
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.
IGO ANNUAL REPORT 2020 — 103
fair value, net of
(i) Borrowings
The Group had access to the following financing arrangements at the reporting date:
transaction costs incurred. Borrowings are subsequently
Borrowings are initially recognised at
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
2019
amount is recognised in profit or loss over the period of the borrowings using the effective interest method.
$'000
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is
Total facilities
probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs
85,716
Corporate debt facility
and amortised over the period of the remaining facility.
Contingent instrument facility1
1,131
(ii) Borrowing costs
86,847
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
Facilities used as at reporting date
intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their
85,716
Corporate debt facility
intended use or sale.
1,131
Contingent instrument facility
Other borrowing costs are expensed in the period in which they are incurred.
57,145
1,211
57,145
1,211
2020
$'000
58,356
58,356
86,847
18 Contributed equity
1. This facility provides financial backing in relation to non-performance of third party guarantee requirements.
(a) Share capital
(d) Recognition and measurement
Notes to the consolidated financial statements
2019
30 June 2020
(i) Borrowings
$'000
(continued)
transaction costs incurred. Borrowings are subsequently
Borrowings are initially recognised at
Fully paid issued capital
1,895,855
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
18 Contributed equity (continued)
amount is recognised in profit or loss over the period of the borrowings using the effective interest method.
fair value, net of
2020
$'000
1,897,126
(b) Movements in ordinary share capital
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
2019
and amortised over the period of the remaining facility.
Details
$'000
(ii) Borrowing costs
Balance at beginning of financial year
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a
Issue of shares under the Employee
qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its
1,036
319,215
Incentive Plan
intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their
Issue of shares on acquisition of Southern
intended use or sale.
Hills Tenements
Other borrowing costs are expensed in the period in which they are incurred.
Balance at end of financial year
2019
Number of shares
2020
Number of shares
590,477,819
586,923,035
590,797,034
590,477,819
2020
$'000
1,895,855
1,897,126
1,879,094
3,095,408
1,895,855
459,376
15,725
1,271
-
-
18 Contributed equity
(c) Capital management
(a) Share capital
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
34
IGO Limited
2019
various financing and liquidity ratios, supported by strong EBITDA margins:
$'000
2020
$'000
Fully paid issued capital
Current ratio (times)
Debt to equity
Underlying EBITDA margin
1,897,126
2020
1,895,855
2019
6.1
3%
51%
4.4
5%
43%
The Group's capital comprises equity,
including reserves, and net debt/(cash). As at 30 June 2020 this totalled
$1,472,643,000 (2019: $1,586,568,000), a decrease of 7% over 2019. Contributing to this decrease was an ongoing
reduction of debt as a result of debt repayments of $28,571,000 during the year and the strong continued 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:
•
•
the Company's operations are able to generate cash flows safely, at appropriate margins, and
Ensure that
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
34
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.
•
IGO Limited
•
102 — IGO ANNUAL REPORT 2020
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.
IGO Limited
35
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
Notes to the consolidated financial statements
30 June 2020
(continued)
19 Reserves and retained earnings/(accumulated losses)
(a) Reserves
Hedging reserve
Share-based payments reserve
Foreign currency translation reserve
2020
$'000
244
18,645
(15)
18,874
2019
$'000
339
15,427
11
15,777
(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.
Hedging
reserve
$'000
Share- based
payments
reserve
$'000
Foreign
currency
translation
reserve
$'000
Total
$'000
15,777
(2,006)
602
1,870
(561)
(26)
4,489
(1,271)
18,874
14,771
515
(154)
(2,021)
606
(27)
3,123
(1,036)
Balance at 1 July 2019
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 2020
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
339
(2,006)
602
1,870
(561)
-
-
-
244
1,393
515
(154)
(2,021)
606
-
-
-
339
15,427
-
-
-
-
-
4,489
(1,271)
18,645
13,340
-
-
-
-
-
3,123
(1,036)
11
-
-
-
-
(26)
-
-
(15)
38
-
-
-
-
(27)
-
-
15,427
15,777
Notes to the consolidated financial statements
30 June 2020
(continued)
11
(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
19 Reserves and retained earnings/(accumulated losses) (continued)
associated hedged transaction affects profit or loss.
(a) Reserves (continued)
Share-based payments reserve
(ii) Nature and purpose of reserves (continued)
The share-based payments reserve is used to record the value of share-based payments provided to employees,
Share-based payments reserve (continued)
including key management personnel, as part of their remuneration. Refer to note 26 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) Retained earnings/(accumulated losses)
Movements in retained earnings/(accumulated losses) were as follows:
IGO Limited
Balance at beginning of financial year
104 — IGO ANNUAL REPORT 2020
Net profit for the period
Dividends paid during the period
Balance at end of financial year
20 Dividends paid and proposed
(a) Ordinary shares
Notes
20
2020
$'000
(62,572)
155,093
(82,712)
9,809
2020
$'000
47,264
35,448
82,712
36
2019
$'000
(115,038)
76,085
(23,619)
(62,572)
2019
$'000
11,809
11,810
23,619
2020
$'000
2019
$'000
-
47,264
Final dividend for the year ended 30 June 2019 of 8 cents (2018: 2 cents) per fully
Interim dividend for the year ended 30 June 2020 of 6 cents (2019: 2 cents) per fully
paid share
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 unfranked dividend of xx cents per fully paid ordinary share
(2019: 8 cents per fully paid ordinary share, franked to 97%), based on tax paid at
30%. The aggregate amount of the proposed dividend expected to be paid on xx
September 2020 out of retained earnings at 30 June 2020, but not recognised as a
liability at year end, is:
IGO Limited
37
19 Reserves and retained earnings/(accumulated losses) (continued)
(b) Retained earnings/(accumulated losses)
Movements in retained earnings/(accumulated losses) were as follows:
Balance at beginning of financial year
Net profit for the period
Dividends paid during the period
Balance at end of financial year
20 Dividends paid and proposed
(a) Ordinary shares
Notes
20
2020
$'000
(62,572)
155,093
(82,712)
9,809
2019
$'000
(115,038)
76,085
(23,619)
(62,572)
Final dividend for the year ended 30 June 2019 of 8 cents (2018: 2 cents) per fully
paid share
Interim dividend for the year ended 30 June 2020 of 6 cents (2019: 2 cents) per fully
paid share
Total dividends paid during the financial year
(b) Dividends not recognised at the end of the reporting period
2020
$'000
47,264
35,448
82,712
2019
$'000
11,809
11,810
23,619
2020
$'000
2019
$'000
In addition to the above dividends, since year end the Directors have recommended
the payment of a final unfranked dividend of 5 cents per fully paid ordinary share
(2019: 8 cents per fully paid ordinary share, franked to 97%), based on tax paid at
30%. The aggregate amount of the proposed dividend expected to be paid on 25
September 2020 out of retained earnings at 30 June 2020, but not recognised as a
liability at year end, is:
20 Dividends paid and proposed (continued)
(c) Franked dividends
(c) Franked dividends
Franking credits available for subsequent reporting periods based on a tax rate of 30%
Franking credits available for subsequent reporting periods based on a tax rate of 30%
(2019 - 30%)
(2019 - 30%)
29,540
47,264
2020
2020
$'000
$'000
2019
2019
$'000
$'000
13
13
19,661
19,661
Notes to the consolidated financial statements
30 June 2020
(continued)
The above amounts are calculated from the balance of the franking account as at the end of the reporting period,
The above amounts are calculated from the balance of the franking account as at the end of the reporting period,
adjusted for:
adjusted for:
(a)
(a)
(b)
(b)
(c)
(c)
franking credits that will arise from the payment of the amount of the provision for income tax;
franking credits that will arise from the payment of the amount of the provision for income tax;
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
The dividend recommended by the Directors since the end of the reporting period, but not recognised as a liability at the
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 unfranked, therefore there will be no impact on the franking account (2019: reduction of
therefore there will be no impact on the franking account (2019: reduction of
reporting date, will be unfranked,
$19,648,000).
$19,648,000).
(d) Recognition and measurement
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of 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.
IGO ANNUAL REPORT 2020 — 105
IGO Limited
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(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.
21 Derivatives
The Group has the following derivative financial
sheet:
instruments in the following line items in the consolidated balance
Current assets
Diesel hedging contracts - cash flow hedges
Non-current assets
Diesel hedging contracts - cash flow hedges
(a)
Instruments used by the Group
2020
$'000
64
64
284
284
2019
$'000
484
484
-
-
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 22 and below for details of the diesel fuel risk being mitigated by the Group’s derivative instruments as at
30 June 2020 and 30 June 2019.
Diesel Hedges
The Group held various commodity forward hedging contracts at 30 June 2020 and 30 June 2019 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 Singapore gasoil 10ppm hedging contracts outstanding at the reporting date:
Litres of oil ('000)
Weighted average price
(AUD/litre)
2020
11,514
15,954
7,144
34,612
2019
8,756
8,818
-
17,574
2020
0.44
0.45
0.45
0.45
2019
0.67
0.67
-
0.67
Fair value
2020
$'000
(11)
75
284
348
2019
$'000
272
212
-
484
0 - 6 months
6 -12 months
1 - 2 years
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
Notes to the consolidated financial statements
30 June 2020
(continued)
21 Derivatives (continued)
(b) Recognition and measurement (continued)
•
hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly probable
forecast transactions (cash flow hedges).
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 19.
(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.
22 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
Risk management: The Group is exposed to commodity and foreign exchange risk which is overseen by
management, under policies approved by the Board. Management identifies, evaluates and hedges financial 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.
IGO Limited
39
IGO Limited
40
106 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 107
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
Notes to the consolidated financial statements
30 June 2020
(continued)
22 Financial risk management (continued)
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
currency (i.e. AUD) were as follows:
instruments, including derivative instruments, denominated in USD and then converted into the functional
Financial assets
Cash and cash equivalents
Trade receivables
Net financial assets
2020
$'000
48,512
46,595
95,107
2019
$'000
1,891
24,568
26,459
The cash balance above only represents the cash held in the USD bank accounts at the reporting date as converted
into AUD at the 30 June 2020 AUD:USD exchange rate of 0.6863 (2019: 0.7013). The remainder of the cash balance of
$461,800,000 (2019: $346,317,000) was held in AUD bank accounts 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 2020 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
2020
$'000
(4,377)
4,838
2019
$'000
(702)
961
(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.
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.
22 Financial risk management (continued)
(a) Market risk (continued)
(ii) Commodity price risk (continued)
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 instruments exposed to commodity price movements were as
follows:
Financial instruments exposed to commodity price movements
Financial assets
Trade receivables
Derivative financial instruments - diesel hedging contracts
Net exposure
2020
$'000
38,089
348
38,437
2019
$'000
26,501
484
26,985
The following table summarises the sensitivity of financial instruments held at 30 June 2020 to movements in the nickel
price, with all other variables held constant. Trade receivables valuation uses a sensitivity analysis of 5.0% (2019:
5.0%).
Sensitivity of financial instruments to nickel price movements
Increase/decrease in nickel price
Increase
Decrease
Impact on post-tax profit
2020
$'000
3,840
(3,840)
2019
$'000
2,924
(2,924)
The following table summarises the sensitivity of financial instruments held at 30 June 2020 to movements in the copper
price, with all other variables held constant. Trade receivables valuation uses a sensitivity analysis of 5.0% (2019:
5.0%).
Sensitivity of financial instruments to copper price movements
Increase/decrease in copper price
Increase
Decrease
Impact on post-tax profit
2020
$'000
805
(805)
2019
$'000
949
(949)
The following table summarises the sensitivity of financial instruments held at 30 June 2020 to a 20% (2019: 20%)
movement in the price of Singapore gasoil 10ppm, with all other variables held constant.
IGO Limited
35
IGO Limited
42
108 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 109
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
Notes to the consolidated financial statements
30 June 2020
(continued)
22 Financial risk management (continued)
(a) Market risk (continued)
(ii) Commodity price risk (continued)
Sensitivity of financial instruments to Singapore gasoil price movements
Increase/decrease in Singapore gasoil price
Increase
Decrease
Impact on other components of
equity
2020
$'000
2,206
(2,206)
2019
$'000
1,713
(1,713)
(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% (2019: 20%). At reporting date, if the equity prices had been higher or lower, net profit for the
year would have increased or decreased by $15,086,000 (2019: $3,854,000).
(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 interest rates. At the reporting date, the Group had the following exposure to interest rate risk on
financial instruments:
Financial assets
Cash and cash equivalents
Financial liabilities
Bank loans
30 June 2020
30 June 2019
Weighted
average
interest rate
%
1.3%
1.3%
2.6%
2.6%
Weighted
average
interest rate
%
1.9%
1.9%
3.7%
3.7%
Balance
$'000
510,312
510,312
57,145
57,145
Balance
$'000
348,208
348,208
85,716
85,716
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.
Sensitivity of interest revenue and expense to interest rate movements
Interest revenue
Increase 1.0% (2019: 1.0%)
Decrease 1.0% (2019: 1.0%)
Interest expense
Increase 1.0% (2019: 1.0%)
Decrease 1.0% (2019: 1.0%)
(b) Credit risk
Impact on post-tax profit
2020
$'000
3,520
(3,520)
(400)
400
2019
$'000
2,425
(2,425)
(600)
600
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.
IGO Limited
43
22 Financial risk management (continued)
(b) Credit risk (continued)
Financial assets
Cash and cash equivalents
Trade receivables
Other receivables
Financial assets at fair value through profit or loss
Derivative financial instruments
2020
$'000
2019
$'000
510,312
46,595
19,315
107,759
348
684,329
348,208
24,568
36,017
27,531
484
436,808
(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, despite the impact of the COVID-19 pandemic.
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, the
impact of the COVID-19 pandemic and forward-looking information that is available. The allowance for expected credit
losses is calculated based on the information available at the time of preparation. The actual credit losses in future
years may be higher or lower.
The Group has policies in place to ensure that sales of products are made to customers with an appropriate credit
history.
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,
despite the impact of the COVID-19 pandemic.
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.
110 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 111
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
22 Financial risk management (continued)
(b) Credit risk (continued)
Other receivables and financial assets (continued)
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.
Maturities of financial liabilities
liabilities. The
The following table details the Group’s remaining contractual maturity for its non-derivative financial
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 2020
Trade and other payables
Lease liabilities
Bank loans*
At 30 June 2019
Trade and other payables
Bank loans*
* Includes estimated interest payments.
Less than 6
months
$'000
6 - 12
months
$'000
53,013
3,931
57,388
114,332
-
3,775
-
3,775
49,902
29,100
79,002
-
29,900
29,900
Between
1 and 5
years
$'000
-
27,862
-
27,862
-
28,842
28,842
Total
contractual
cash
flows
$'000
Carrying
amount
$'000
53,013
45,053
57,388
53,013
39,785
56,937
155,454
149,735
Over 5
years
$'000
-
9,485
-
9,485
-
-
-
49,902
87,842
49,902
84,589
137,744
134,491
Notes to the consolidated financial statements
30 June 2020
(continued)
Notes to the consolidated financial statements
30 June 2020
(continued)
22 Financial risk management (continued)
(c) Liquidity risk (continued)
Maturities of financial liabilities (continued)
22 Financial risk management (continued)
(c) Liquidity risk (continued)
(d) Recognised fair value measurements
Maturities of financial liabilities (continued)
(i) Fair value hierarchy
The fair value of financial assets and liabilities must be estimated for recognition and measurement or for disclosure
(d) Recognised fair value measurements
purposes.
(i) Fair value hierarchy
AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level of the following fair value
The fair value of financial assets and liabilities must be estimated for recognition and measurement or for disclosure
measurement hierarchy:
purposes.
quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
(a)
inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
(b)
AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level of the following fair value
directly (as prices) or indirectly (derived from prices) (level 2); and
measurement hierarchy:
inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).
(c)
quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
(a)
inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
(b)
The following table presents the Group’s assets and liabilities measured and recognised at fair value at 30 June 2020
directly (as prices) or indirectly (derived from prices) (level 2); and
and 30 June 2019 on a recurring basis.
inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).
(c)
Total
$'000
The following table presents the Group’s assets and liabilities measured and recognised at fair value at 30 June 2020
and 30 June 2019 on a recurring basis.
At 30 June 2020
Financial assets
Listed investments
Derivative instruments
At 30 June 2020
Financial assets
Listed investments
Derivative instruments
Diesel hedging contracts
-
107,759
107,759
Total
$'000
107,759
348
107,759
108,107
Level 1
$'000
107,759
Level 3
$'000
-
Level 2
$'000
-
Level 1
$'000
Level 3
$'000
Level 2
$'000
348
-
348
-
-
-
Diesel hedging contracts
-
Level 1
$'000
107,759
348
Level 2
$'000
348
-
Level 3
$'000
-
348
Total
$'000
108,107
Diesel hedging contracts
At 30 June 2019
Financial assets
Listed investments
Derivative instruments
At 30 June 2019
Financial assets
Listed investments
Derivative instruments
The Group did not measure any financial assets or financial liabilities at fair value on a non-recurring basis as at 30
484
June 2020 and did not transfer any fair value amounts between the fair value hierarchy levels during the year ended 30
28,015
June 2020.
Diesel hedging contracts
Level 2
$'000
-
Level 1
$'000
27,531
Level 3
$'000
-
-
27,531
27,531
484
27,531
28,015
Total
$'000
27,531
484
-
484
27,531
484
484
-
-
-
-
-
-
The Group did not measure any financial assets or financial liabilities at fair value on a non-recurring basis as at 30
(ii) Valuation techniques used to determine level 1 fair values
June 2020 and did not transfer any fair value amounts between the fair value hierarchy levels during the year ended 30
The fair value of financial instruments traded in active markets (such as publicly traded derivatives and trading and
June 2020.
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.
(ii) Valuation techniques used to determine level 1 fair values
The fair value of financial instruments traded in active markets (such as publicly traded derivatives and trading and
(iii) Valuation techniques used to determine level 2 and level 3 fair values
available-for-sale securities) is based on quoted market prices at the end of the reporting period. The quoted market
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives)
price used for financial assets held by the Group is the current bid price. These instruments are included in level 1.
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
(iii) Valuation techniques used to determine level 2 and level 3 fair values
an instrument are observable, the instrument is included in level 2.
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
If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value
Specific valuation techniques used to value financial instruments include:
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.
•
•
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.
IGO Limited
46
46
IGO Limited
45
IGO Limited
112 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 113
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
22 Financial risk management (continued)
(d) Recognised fair value measurements (continued)
(iii) Valuation techniques used to determine level 2 and level 3 fair values (continued)
• 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.
(iv) Fair value of other financial instruments
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.
Current liabilities
Bank loans
Lease liabilities
Non-current liabilities
Bank loans
Lease liabilities
30 June 2020
30 June 2019
Carrying
amount
$'000
Fair value
$'000
Carrying
amount
$'000
Fair value
$'000
56,937
6,235
63,172
-
33,550
33,550
57,145
7,706
64,851
-
37,347
37,347
56,226
-
56,226
28,363
-
28,363
57,142
-
57,142
28,574
-
28,574
Notes to the consolidated financial statements
30 June 2020
(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.
23 Subsidiaries
(a) Significant investments in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of IGO Limited and the subsidiaries
listed in the following table:
Name of entity
Note
Country of
incorporation
Equity holding
IGO Newsearch Pty Ltd
IGO Stockman Parent Pty Ltd
IGO Stockman Project Pty Ltd
IGO Windward Pty Ltd
Flinders Prospecting Pty Ltd
IGO Europe Pty Ltd
IGO Nova Holdings Pty Ltd
IGO Nova Pty Ltd
Independence Group Europe AB
IGO Downstream Technologies Pty Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Sweden
Australia
(a)
(a)
2020
%
100
100
100
100
100
100
100
100
100
100
2019
%
100
100
100
100
100
100
100
100
100
100
(a)
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 29.
(b) 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 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 31(c)(i)).
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
the asset
Unrealised losses are also eliminated unless the transaction provides evidence of
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
the impairment of
IGO Limited
114 — IGO ANNUAL REPORT 2020
47
IGO Limited
48
IGO ANNUAL REPORT 2020 — 115
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
Other information
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.
24 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) 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
Finance lease commitments
Future minimum lease payments under lease contracts with the present value of net
minimum lease payments are as follows:
Within one year
Later than one year but not later than five years
Later than five years
Total minimum lease payments
Future finance charges
Present value of minimum lease payments
Current
Non-current
Total included in lease liabilities
2020
$'000
4,125
4,125
2020
$'000
-
-
-
-
2020
$'000
7,706
27,862
9,485
45,053
(5,268)
39,785
6,235
33,550
39,785
2019
$'000
30,666
30,666
2019
$'000
6,272
20,433
11,340
38,045
2019
$'000
-
-
-
-
-
-
-
-
-
24 Commitments and contingencies (continued)
(c) Gold delivery commitments
Within one year
Later than one but not later than two years
Total
Notes to the consolidated financial statements
30 June 2020
(continued)
Gold for
physical
delivery
oz
55,800
54,288
110,088
Average
contracted
sale price
A$/oz
1,845
2,089
1,965
Value of
committed
sales
$'000
102,942
113,426
216,368
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 2020 totalling $1,211,000 (2019: $1,131,000) which have been
granted in favour of various third parties. The guarantees primarily relate to environmental and rehabilitation bonds at
the various mine sites.
25 Events occurring after the reporting period
The impact of the COVID-19 pandemic is ongoing and, while it has had limited impact on the Group up to 30 June 2020,
it is not practicable to estimate the potential impact, positive or negative, after the reporting date. The situation continues
to develop and is dependent on measures imposed by the Australian Government and other countries, such as
maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be
provided.
On 27 August 2020, the Company announced a final unfranked dividend of 5 cents per share, to be paid on 25
September 2020.
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.
26 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 IGO Limited 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;
LTI - service rights;
Employee share ownership award; and
Employee salary sacrifice share plan.
116 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 117
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
Notes to the consolidated financial statements
30 June 2020
(continued)
26 Share-based payments (continued)
LTI - Performance Rights
Under the LTI scheme, participants are granted performance 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 scheme or to receive
any guaranteed benefits.
Equity settled awards outstanding
Set out below are summaries of performance rights granted under the LTI scheme:
Outstanding at the beginning of the year
Rights issued during the year
Rights vested during the year
Rights lapsed during the year
Rights cancelled during the year
Outstanding at the end of the year
2020
2019
Weighted
average fair
value at grant
date
2.54
4.62
-
2.39
2.29
3.20
Number of
share rights
2,369,141
819,577
-
(495,826)
(2,026)
2,690,866
Number of
share rights
2,042,619
953,229
(281,388)
(326,175)
(19,144)
2,369,141
Weighted
average fair
value at grant
date
2.14
2.67
1.34
1.51
2.28
2.54
The share-based payments expense relating to performance rights included in profit or loss for the year totalled
$2,695,027 (2019: $1,883,700).
Fair value of performance rights granted
The fair value of the share rights granted during the year ended 30 June 2020 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 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 (%)
20 November 2019
1 July 2022
6.05
4.45
38
1.16
0.71
23 September 2019
1 July 2022
6.44
4.65
39
1.09
0.74
23 September 2019
1 July 2022
6.44
4.65
39
1.09
0.74
Vesting conditions of performance rights granted
Vesting of the performance rights granted to executive directors, executives and other employees during the year is
based on four equally weighted performance hurdles as follows:
•
•
•
•
Relative total shareholder return (TSR);
Absolute TSR;
Reserve growth per share; and
EBITDA average margin.
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 comparator group over the same three
year measurement period.
The comparator group is a peer group comprised of members of the S&P ASX 300 Metals and Mining Index, as well as
several mining companies listed on the Toronto Stock Exchange (TSX) and the New York Stock Exchange (NYSE). The
Board has discretion to adjust the peer group from time to time in its absolute discretion.
26 Share-based payments (continued)
Vesting conditions of performance rights granted (continued)
The vesting schedule for the 25% 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
Level of vesting
Zero
50% plus pro-rata straight line percentage between 50%
and 100%
100%
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 for the 25% 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%
Reserve growth per share
The reserve growth per share performance condition will be determined as managed ore reserve growth in excess of
depletion over the three-year measurement period. Baseline Ore Reserves means the Group's managed nickel
equivalent ore reserve at the start of the performance period as determined by the Board.
The vesting schedule for the 25% of the performance rights subject to Reserve growth per share testing is as follows:
Reserve growth per share
<90% of Baseline Ore Reserves
90% of Baseline Ore Reserves
Above 90% of Baseline Ore Reserves and below 100%
100% of Baseline Ore Reserves
Above 100% of Baseline Ore Reserves and below 120%
120% and above of Baseline Ore Reserves
Level of vesting
0%
33%
Straight line pro-rata between 33% and 66%
66%
Straight line pro-rata between 66% and 100%
100%
EBITDA average margin
The EBITDA average margin will be measured over the three-year measurement period.
The vesting schedule for the 25% of the performance rights subject to EBITDA average margin testing is as follows:
Group EBITDA margin
<20%
≥ 20%
≥ 30%
≥ 40%
Service rights - LTI scheme
Level of vesting
0%
33%
66%
100%
Under the Group's 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 IGO Limited (referred to as service rights and classified as an LTI).
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.
118 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 119
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
Notes to the consolidated financial statements
30 June 2020
(continued)
26 Share-based payments (continued)
Service rights - LTI scheme (continued)
The number of rights to be granted is determined based on the 5 day VWAP of the Company's shares after the release
of IGO Limited's financial statements.
Set out below are summaries of movements in service rights during the year:
Outstanding at the beginning of the year
Rights issued during the year
Rights vested during the year
Rights lapsed during the year
Outstanding at the end of the year
2020
2019
Number of
share rights
Weighted
average fair
value
Number of
share rights
Weighted
average fair
value
437,686
338,175
(279,978)
(19,795)
476,088
4.01
5.88
3.90
4.77
5.36
290,202
320,780
(152,650)
(20,646)
437,686
3.51
4.21
3.51
3.87
4.01
The share-based payments expense relating to service rights included in profit or loss for the year totalled $1,614,857
(2019: $1,116,176).
Employee Share Ownership Award
In accordance with the terms of the EIP, the Employee Share Ownership Award (ESOA) provides for shares to be
issued by the Company to employees for no cash consideration. All employees (excluding executive directors, senior
management and other employees entitled to participate in the LTI scheme and non-executive directors) who have
been continuously employed by the Group for a period of at least three months prior to 1 July are eligible to participate
in the ESOA.
Under the ESOA, eligible employees may be granted up to $1,000 worth of fully paid ordinary shares in IGO Limited
annually for no cash consideration. The number of shares issued to participants in the scheme is the offer amount
divided by the weighted average price at which the Company's shares are traded on the Australian Securities Exchange
for the 20 days up to and including the date of grant.
26 Share-based payments (continued)
Non-executive Directors
The 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 performance rights under the EIP and any such issue
would be subject to all necessary shareholder approvals.
(b) Recognition and measurement
Equity-settled transactions
together with a
The fair values of equity settled awards are recognised in share-based payments expense,
corresponding 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).
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, and takes into account the exercise price, the term of
the performance right, the share price at grant date and expected price volatility of the underlying share, the expected
dividend yield, the risk-free interest rate for the term of the share right and the correlations and volatilities of the peer
group companies.
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.
Number of shares issued under the plan to participating employees
2020
Number
39,240
2019
Number
25,338
27 Related party transactions
(a) Transactions with other related parties
Each participant was issued with shares worth $1,000 based on the weighted average market price of $4.58 (2019:
$4.85). The share-based payments expense relating to ESOA included in profit or loss for the year totalled $179,719
(2019: $122,889).
Employee Salary Sacrifice Share Plan
In accordance with the terms of the EIP, the Employee Salary Sacrifice Plan allows for employees, excluding KMP, to
purchase up to $5,000 of shares in the Company via salary sacrifice. The Company will match any share purchased
with one share, up to a maximum of $5,000 (2019: any two shares purchased were matched with one share, up to a
maximum of $2,500). The number of shares acquired on-market by the Company during the year for the purposes of
this plan were 159,712 shares with an average price per share of $5.32 (2019: 69,970 shares with an average price per
share of $4.50).
The share rights issued under the EIP will not be subject to any further escrow restrictions once they have vested to the
employees.
Share trading policy
The trading of shares issued to participants under the Company’s EIP is subject to, and conditional upon, compliance
with the Company’s employee share trading policy.
During the financial year, a wholly-owned subsidiary paid dividends of $195,000,000 to IGO Limited (2019:
$78,000,000). 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 IGO Limited 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
2020
$
5,851,169
305,561
138,450
2,614,857
8,910,037
2019
$
5,313,201
301,780
86,066
1,901,926
7,602,973
Detailed remuneration disclosures are provided in the remuneration report on pages 53 to 70.
120 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 121
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
Notes to the consolidated financial statements
30 June 2020
(continued)
28 Parent entity financial information
(a) Summary financial information
The following information relates to the parent entity, IGO Limited, 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
Retained earnings/(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
2020
$'000
2019
$'000
583,089
1,552,565
2,135,654
86,725
88,307
175,032
432,362
1,550,426
1,982,788
80,620
98,663
179,283
1,960,622
1,803,505
(1,960,622)
(1,803,505)
1,897,126
1,895,855
44
18,645
44,807
136
15,427
(107,913)
1,960,622
1,803,505
2020
$'000
235,432
(92)
235,340
2019
$'000
85,055
(329)
84,726
The parent entity has no unsecured guarantees in respect of finance leases of subsidiaries (2019: $nil).
There are cross guarantees given by IGO Limited, IGO Nova Holdings Pty Ltd and IGO Nova Pty Ltd as described in
note 29. 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 2020 or 30 June 2019.
(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 2020 or 30 June 2019.
29 Deed of cross guarantee
IGO Limited, IGO Nova Holdings Pty Ltd and IGO Nova Pty Ltd are parties to a deed of cross guarantee under which
each company guarantees the debts of the others. By entering into the deed, 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 was also a party to the deed of cross guarantee until its divestment on 31 May 2019.
(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 IGO Limited, 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 2020 of the closed group consisting of IGO
Limited, IGO Nova Holdings Pty Ltd and IGO Nova Pty Ltd. The results of Independence Long Pty Ltd are included until
the date of its divestment on 31 May 2019.
Consolidated statement of profit or loss and other comprehensive income
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 growth expense
Royalty expense
Shipping and wharfage expense
Borrowing and finance costs
Impairment and forgiveness of loans to subsidiaries
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
Other comprehensive loss for the period, net of tax
Total comprehensive income for the period
Summary of movements in consolidated retained earnings/(accumulated
losses)
Accumulated losses at the beginning of the financial year
Profit for the year
Dividends paid
Retained earnings/(accumulated losses) at the end of the financial year
2020
$'000
888,930
3,492
(249,486)
(62,511)
(4,489)
32,812
(223,905)
(40,319)
(35,075)
(17,624)
(5,072)
(20,425)
(14,463)
251,865
(79,741)
172,124
(95)
(95)
172,029
2020
$'000
(7,327)
172,124
(82,712)
82,085
2019
$'000
784,509
8,377
(262,851)
(52,205)
(3,123)
(5,796)
(204,531)
(30,441)
(30,506)
(18,340)
(6,237)
(21,168)
(11,264)
146,424
(52,794)
93,630
(1,054)
(1,054)
92,576
2019
$'000
(77,338)
93,630
(23,619)
(7,327)
IGO Limited
50
122 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 123
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
29 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 for the period, net of tax
Total comprehensive income for the period
Summary of movements in consolidated retained earnings/(accumulated
losses)
(95)
(95)
173,259
2020
$'000
(1,054)
(1,054)
92,576
2019
$'000
Accumulated losses at the beginning of the financial year
Profit for the year
Dividends paid
Retained earnings/(accumulated losses) at the end of the financial year
29 Deed of cross guarantee (continued)
(77,338)
Notes to the consolidated financial statements
30 June 2020
93,630
(continued)
(23,619)
Notes to the consolidated financial statements
30 June 2020
(7,327)
(continued)
(7,327)
173,354
(82,712)
83,315
2020
$'000
(95)
2019
$'000
(1,054)
(b) Consolidated balance sheet
(a) Consolidated statement of profit or loss and other comprehensive income (continued)
29 Deed of cross guarantee (continued)
Set out below is a consolidated balance sheet as at 30 June 2020 of the closed group consisting of IGO Limited, IGO
(b) Consolidated balance sheet (continued)
Nova Holdings Pty Ltd and IGO Nova Pty Ltd.
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
ASSETS
Other comprehensive loss for the period, net of tax
Current assets
92,576
Total comprehensive income for the period
346,451
Cash and cash equivalents
45,486
Trade receivables
Summary of movements in consolidated retained earnings/(accumulated
25,889
Inventories
losses)
2019
26,732
Financial assets at fair value through profit or loss
$'000
484
Derivative financial instruments
(77,338)
Accumulated losses at the beginning of the financial year
445,042
Total current assets
93,630
Profit for the year
(23,619)
Dividends paid
Non-current assets
14,998
Receivables
(7,327)
Retained earnings/(accumulated losses) at the end of the financial year
23,088
Property, plant and equipment
-
Right-of-use assets
(b) Consolidated balance sheet
1,116,014
Mine properties
Set out below is a consolidated balance sheet as at 30 June 2020 of the closed group consisting of IGO Limited, IGO
36,338
Exploration and evaluation expenditure
Nova Holdings Pty Ltd and IGO Nova Pty Ltd.
172,694
Deferred tax assets
-
Derivative financial instruments
35,195
Investments in controlled entities
384,364
Investments in joint ventures
173,259
502,842
65,857
26,304
2020
105,065
$'000
64
(7,327)
700,132
173,354
(82,712)
4
83,315
28,657
28,386
960,352
36,338
111,113
284
35,195
429,706
(1,054)
(95)
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
IGO Limited
Provisions
Deferred tax liabilities
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained earnings/(accumulated losses)
TOTAL EQUITY
IGO Limited
IGO Limited
124 — IGO ANNUAL REPORT 2020
1,630,035
1,782,691
2,330,167
2,227,733
92,407
56,937
4,869
7,058
96,891
56,226
-
5,180
161,271
158,297
-
24,033
40,273
106,490
170,796
332,067
28,363
-
58
39,018
97,761
165,142
323,439
1,998,100
1,904,294
1,897,126
18,889
82,085
1,998,100
1,895,855
15,766
(7,327)
1,904,294
58
59
Notes to the consolidated financial statements
30 June 2020
(continued)
30 Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, IGO
Limited, and its related practices:
Amounts received or due and receivable by BDO Audit (WA) Pty Ltd for:
Audit and review of financial statements
Other assurance services
Amounts received or due and receivable by an associate of the auditor of the Group
for:
Tax services
Corporate advisory services
Other compliance and advisory services
Total services provided by BDO
2020
$
2019
$
177,500
8,000
185,500
168,500
8,000
176,500
5,000
18,000
12,500
35,500
5,000
-
7,000
12,000
221,000
188,500
31 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. Adjustments were made as a result of adopting the following standard:
•
AASB 16 Leases
The impact of the adoption of this standard and the new accounting policies are disclosed below.
The Group has not elected to early adopt any new standards or amendments during the current financial year.
(i) AASB 16 Leases
The Group has adopted AASB 16 Leases with effect from 1 July 2019 using the modified retrospective approach, but
has not restated comparatives for the 2019 reporting period, as permitted under the specific transition provisions in the
standard. The reclassifications and the adjustments arising from the new leasing rules are therefore recognised in the
opening balance sheet on 1 July 2019. The new accounting policies are disclosed in note 14.
Adjustments recognised on adoption of AASB 16
On adoption of AASB 16, the Group recognised lease liabilities in relation to leases which had previously been
classified as 'operating leases' under the principles of AASB 117 Leases. These liabilities were measured at the present
value of remaining lease payments, discounted using an arm's length asset finance facility borrowing rate as of 1 July
2019. The weighted average incremental borrowing rate applied to the lease liabilities on 1 July 2019 was 4.3%.
IGO Limited
60
IGO ANNUAL REPORT 2020 — 125
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 Notes to the consolidated financial statements
30 June 2020
(continued)
Notes to the consolidated financial statements
30 June 2020
(continued)
31 Summary of significant accounting policies (continued)
31 Summary of significant accounting policies (continued)
(a) New and amended standards and interpretations adopted by the Group (continued)
(i) AASB 16 Leases (continued)
(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 value of the assets transferred, liabilities incurred and the equity interests issued by the Group. The consideration
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.
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.
Operating lease commitments at 30 June 2019
Discounted using the lessee's incremental borrowing rate at the date of initial application
Lease liability recognised as at 1 July 2019
Space
Represented by:
Current lease liabilities
Non-current lease liabilities
$'000
38,045
32,884
32,884
4,979
27,905
32,884
The associated right-of-use assets were measured at the amount equal to the lease liability, adjusted by the amount of
any prepaid or accrued lease payments relating to that lease recognised in the balance sheet as at 30 June 2019.
There were no onerous lease contracts that would have required an adjustment to the right-of-use assets at the date of
initial application.
The recognised right-of-use assets relate to the following types of assets:
Land and buildings
Plant and equipment
Practical expedients applied
30 June 2020
$'000
1 July 2019
$'000
5,339
33,657
38,996
2,812
30,072
32,884
In applying AASB 16 for the first time, the Group has used the following practical expedients permitted by the standard:
•
•
•
•
•
the use of a single discount rate to a portfolio of leases with reasonably similar characteristics
reliance on previous assessments on whether leases are onerous
the accounting for operating leases with a remaining lease term of less than 12 months as at 1 July 2019 as
short-term leases
the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application; and
the use of hindsight in determining the lease term where the contract contains options to extend or terminate the
lease.
The Group has also elected not to reassess whether a contract is, or contains a lease at the date of initial application.
Instead, for contracts entered into before the transition date the Group relied on its assessment made applying AASB
117 and Interpretation 4 Determining whether an Arrangement contains a Lease.
(b) New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2020
reporting periods and have not been early adopted by the Group. The Group's assessment of the impact of these new
standards is that they are not expected to have a material impact on the Group in the current or future reporting periods.
IGO Limited
55
IGO Limited
62
126 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 127
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS30 JUNE 2020 DIRECTORS’ DECLARATION
30 JUNE 2020
Directors' declaration
30 June 2020
In the Directors' opinion:
(a)
the financial statements and notes set out on pages 74 to 127 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 2020 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 the Directors.
Peter Bradford
Managing Director
Perth, Western Australia
Dated this 26th day of August 2020
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
To the members of IGO Limited
INDEPENDENT AUDITOR'S REPORT
To the members of IGO Limited
Report on the Audit of the Financial Report
To the members of IGO Limited
Report on the Audit of the Financial Report
Opinion
performance for the year ended on that date; and
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 2020 and of its
financial performance for the year ended on that date; and
Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its
financial performance for the year ended on that date; and
We have audited the financial report of IGO Limited (the Company) and its subsidiaries (the Group),
Opinion
Report on the Audit of the Financial Report
which comprises the consolidated balance sheet as at 30 June 2020, the consolidated statement of
We have audited the financial report of IGO Limited (the Company) and its subsidiaries (the Group), which
profit or loss and other comprehensive income, the consolidated statement of changes in equity and
Opinion
comprises the consolidated balance sheet as at 30 June 2020, the consolidated statement of profit or loss
the consolidated statement of cash flows for the year then ended, and notes to the financial report,
and other comprehensive income, the consolidated statement of changes in equity and the consolidated
We have audited the financial report of IGO Limited (the Company) and its subsidiaries (the Group),
including a summary of significant accounting policies and the directors’ declaration.
statement of cash flows for the year then ended, and notes to the financial report, including a summary of
which comprises the consolidated balance sheet as at 30 June 2020, the consolidated statement of
significant accounting policies and the directors’ declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
profit or loss and other comprehensive income, the consolidated statement of changes in equity and
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations Act
Act 2001, including:
the consolidated statement of cash flows for the year then ended, and notes to the financial report,
2001, including:
including a summary of significant accounting policies and the directors’ declaration.
(i)
i. Giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its financial
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(ii)
ii. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
(i)
Basis for opinion
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
(ii)
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
standards are further described in the Auditor’s responsibilities for the audit of the Financial Report
Report section of our report. We are independent of the Group in accordance with the Corporations
Basis for opinion
section of our report. We are independent of the Group in accordance with the Corporations Act 2001
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
Report section of our report. We are independent of the Group in accordance with the Corporations
accordance with the Code.
ethical responsibilities in accordance with the Code.
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
We confirm that the independence declaration required by the Corporations Act 2001, which has been
We confirm that the independence declaration required by the Corporations Act 2001, which has been
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
given to the directors of the Company, would be in the same terms if given to the directors as at the time
given to the directors of the Company, would be in the same terms if given to the directors as at the
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
of this auditor’s report.
time of this auditor’s report.
ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
our opinion.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
for our opinion.
given to the directors of the Company, would be in the same terms if given to the directors as at the
Key audit matters
time of this auditor’s report.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
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
for our opinion.
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a
our audit of the financial report of the current period. These matters were addressed in the context of
separate opinion on these matters.
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
Key audit matters
a separate opinion on these 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.
128 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 129
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.
INDEPENDENT AUDITOR’S REPORT Carrying Value of Mine Properties
Valuation of Inventory
Key audit matter
How the matter was addressed in our audit
Key audit matter
How the matter was addressed in our audit
Refer to Note 15 of the financial statements, for
disclosure over the mine properties asset.
Our work included, but was not limited, to the
following procedures:
We consider accounting for inventory to be a key
audit matter because of the:
Our work included but was not limited to the
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.
This is a key audit matter due to the quantum of
the asset and the significant judgement involved
in management’s assessment of the carrying
value of mine properties.
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 mining assets by:
·
·
·
·
Comparing the carrying amount of the
Group’s net assets against the
market capitalisation, both as at
30 June 2020, and subsequent
movements;
Considering commodity price
assumptions at 30 June 2020, including
forecasts;
Reviewing board and sub-committee
meeting minutes, and holding
discussions with key management,
including non-finance personnel; and
Assessing economic indicators for
impacts on appropriate discount rates;
and
· We also assessed the adequacy of related
disclosures in Note 15 to the financial
statements.
· Quantitative significance of the inventory
balance;
·
·
·
·
Complexity involved in determining
inventory quantities on hand due 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 2020 to
supporting documentation;
Verifying the physical inputs included in the
cost models as at 30 June 2020 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; and
In the case of the non-current stockpile
at Tropicana, 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.
130 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 131
INDEPENDENT AUDITOR’S REPORTINDEPENDENT AUDITOR’S REPORT Other information
Other information
Auditor’s responsibilities for the audit of the
Financial Report
Our opinion on the financial report does not cover
the other information and we do not express any
form of assurance conclusion thereon.
The directors are responsible for the other
information. The other information comprises
the information contained in the Group’s annual
report for the year ended 30 June 2020, but does
not include the financial report and our auditor’s
report thereon.
Our objectives are to obtain reasonable assurance
The directors are responsible for the other information. The other information comprises the
about whether the financial report as a whole is
information contained in the Group’s annual report for the year ended 30 June 2020, but does not
free from material misstatement, whether due to
include the financial report and our auditor’s report thereon.
fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high
Our opinion on the financial report does not cover the other information and we do not express any
level of assurance, but is not a guarantee that an
form of assurance conclusion thereon.
audit conducted in accordance with the Australian
In connection with our audit of the financial report, our responsibility is to read the other information
Auditing Standards will always detect a material
misstatement when it exists. Misstatements can
identified above and, in doing so, consider whether the other information is materially inconsistent
arise from fraud or error and are considered
with the financial report or our knowledge obtained in the audit or otherwise appears to be materially
material if, individually or in the aggregate, they
misstated.
could reasonably be expected to influence the
economic decisions of users taken on the basis of
this financial report.
If, based on the work we have performed on the other information that we obtained prior to the date
of this auditor’s report, 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.
In connection with our audit of the financial report,
our responsibility is to read the other information
identified above 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.
Responsibilities of the directors for the Financial Report
If, based on the work we have performed on the
other information that we obtained prior to the
date of this auditor’s report, 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.
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
https://www.auasb.gov.au/admin/file/content102/
and for such internal control as the directors determine is necessary to enable the preparation of the
c3/ar1_2020.pdf
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
This description forms part of our auditor’s 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:
Opinion on the Remuneration Report
Report on the Remuneration Report
Responsibilities of the directors for the Financial
Report
Auditor’s responsibilities for the audit of the Financial Report
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
The directors of the Company are responsible for
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
We have audited the Remuneration Report included
the preparation of the financial report that gives
operations, or has no realistic alternative but to do so.
Report on the Remuneration Report
in pages 53 to 70 of the directors’ report for the
a true and fair view in accordance with Australian
year ended 30 June 2020.
Accounting Standards and the Corporations Act
Opinion on the Remuneration Report
2001 and for such internal control as the directors
In our opinion, the Remuneration Report of IGO
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
We have audited the Remuneration Report included in pages 53 to 70 of the directors’ report for the
determine is necessary to enable the preparation of
Limited, for the year ended 30 June 2020, complies
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
the financial report that gives a true and fair view
year ended 30 June 2020.
with section 300A of the Corporations Act 2001.
and is free from material misstatement, whether
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
In our opinion, the Remuneration Report of IGO Limited, for the year ended 30 June 2020, complies
due to fraud or error.
audit conducted in accordance with the Australian Auditing Standards will always detect a material
with section 300A of the Corporations Act 2001.
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
In preparing the financial report, the directors
The directors of the Company are responsible
Responsibilities
if, individually or in the aggregate, they could reasonably be expected to influence the economic
are responsible for assessing the ability of the
for the preparation and presentation of the
group to continue as a going concern, disclosing,
decisions of users taken on the basis of this financial report.
Remuneration Report in accordance with
The directors of the Company are responsible for the preparation and presentation of the
as applicable, matters related to going concern
section 300A of the Corporations Act 2001. Our
A further description of our responsibilities for the audit of the financial report is located at the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
and using the going concern basis of accounting
responsibility is to express an opinion on the
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
unless the directors either intend to liquidate the
Remuneration Report, based on our audit conducted
Group or to cease operations, or has no realistic
Australian Auditing Standards.
in accordance with Australian Auditing Standards.
alternative but to do so.
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
Responsibilities
This description forms part of our auditor’s report.
BDO Audit (WA) Pty Ltd
Glyn O’Brien
Glyn O’Brien
Director
Director
Perth, 26 August 2020
132 — IGO ANNUAL REPORT 2020
Perth, 26 August 2020
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 11 August 2020.
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
4,461
2,773
813
782
90
8,919
1,629,460
7,056,600
6,159,504
19,076,446
556,875,024
590,797,034
0.28
1.19
1.04
3.23
94.26
100.00
b. The number of shareholders holding less that a marketable parcel of fully paid ordinary shares is 1,200.
c. The Company has received the following notices of substantial shareholding (Notice):
SUBSTANTIAL SHAREHOLDER
Mark Creasy
T. Rowe Price Group, Inc.
FIL Limited
RELEVANT INTEREST PER THE NOTICE – NUMBER OF SHARES
76,860,969
48,341,790
45,566,028
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
NO. OF SHARES HELD
PERCENTAGE HELD
1
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
2 HSBC CUSTODY NOMINEES LIMITED
3 CITICORP NOMINEES PTY LIMITED
4 YANDAL INVESTMENTS PTY LTD
5 NATIONAL NOMINEES LIMITED
6
FRASERX PTY LTD
7 BNP PARIBAS NOMINEES PTY LTD
8 BNP PARIBAS NOMS PTY LTD
9 MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
10 PERTH SELECT SEAFOODS PTY LTD
11 HSBC CUSTODY NOMINEES LIMITED
12 MR KENNETH JOSEPH HALL
13 PERTH SELECT SEAFOODS PTY LTD
14 AMALGAMATED DAIRIES LIMITED
15 HSBC CUSTODY NOMINEES LIMITED-GSCO ECA
16 CITICORP NOMINEES PTY LIMITED
17 HSBC CUSTODY NOMINEES LIMITED - A/C 2
18 AMP LIFE LIMITED
19 UBS NOMINEES PTY LTD
20 ZERO NOMINEES PTY LTD
Top 20 Holders of Independence Ordinary Share Class (Total)
Total Remaining Holders Balance
3. UNQUOTED SECURITIES
162,617,066
148,795,100
79,598,469
63,445,781
31,158,317
13,415,188
10,080,193
6,470,324
4,683,845
2,837,200
2,629,699
1,847,830
1,766,800
1,703,553
1,628,727
1,410,890
1,244,849
1,174,407
1,067,844
1,024,683
538,600,765
52,196,269
27.53
25.19
13.47
10.74
5.27
2.27
1.71
1.10
0.79
0.48
0.45
0.31
0.30
0.29
0.28
0.24
0.21
0.20
0.18
0.17
91.17
8.83
IGO has 1,729,067 performance rights and 476,088 service rights on issue. The number of beneficial holders of performance
rights and service rights are 108 and 90 respectively.
IGO ANNUAL REPORT 2020 — 133
INDEPENDENT AUDITOR’S REPORT SHAREHOLDER REPORTING TIMETABLE
GLOSSARY OF TERMS
IMPORTANT DATES
Please note that the dates below are subject to change.
Please check the IGO website nearer the time to confirm dates.
2020
29 October 2020
September 2020 Quarterly Activities Report
29 October 2020
September 2020 Quarter Investor Webcast
18 November 2020
Annual General Meeting, Four Points by Sheraton, Perth, Western Australia
2021
28 January 2021
FY21 Half Yearly Financial Statements (incorporating December 2020
Quarterly Activities Report)
28 January 2021
FY21 Half Year Investor Webcast
29 April 2021
29 April 2021
29 July 2021
29 July 2021
March 2021 Quarterly Activities Report
March 2021 Quarter Investor Webcast
June 2021 Quarterly Activities Report
June 2021 Quarter Investor Webcast
GLOSSARY OF TERMS
AC drilling
aircore usually in the context of exploration drilling or drill holes
AGAA
Ag
Au
BCM
Co
Cu
EBITDA
EM
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
fixed-loop electromagnetic
Free Cash Flow
comprises Net Cash Flow from operating activities and Net Cash Flow from investing activities.
HPGR
HPM
IGO
LTIFR
MLEM
Mt
Mtpa
NPAT
Ni
oz
high pressure grinding rolls
high precious metal
IGO Limited
lost time injury frequency rate
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
Tropicana Joint Venture that is 30% owned by the Company and 70% owned by AngloGold Ashanti Australia.
Underlying EBITDA
is a non-IFRS measure and comprises net profit or loss before finance costs, depreciation and amortisation and income
tax, and after any earnings adjustment items, including asset impairments, gain or loss on sale of subsidiaries, redundancy
and restructuring costs, depreciations and amortisation, and one-off transaction costs.
Underlying Free Cash
Flow
comprises Free Cash Flow adjusted to exclude acquisition costs, proceeds from investment sales and payments for
investments and mineral interests.
Zn
$
$M
zinc
Australian dollars
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.
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
27 June 2013 and is available from the World Gold Council’s website.
134 — IGO ANNUAL REPORT 2020
IGO ANNUAL REPORT 2020 — 135
COMPANY DIRECTORY
DIRECTORS
PETER BILBE
Non-executive Chairman
PETER BRADFORD
Managing Director & CEO
DEBRA BAKKER
Non-executive Director
KATHLEEN BOZANIC
Non-executive Director
PETER BUCK
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
General 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: 590,797,034 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
136 — IGO ANNUAL REPORT 2020
CAUTIONARY NOTES AND DISCLAIMER
This annual report has been prepared by IGO Limited (“IGO”) (ABN 46 092 786 304). It should not be considered as an offer or invitation to subscribe for,
purchase or sell 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, and information derived from publicly available sources that has not been independently
verified. The information, opinions or conclusions expressed in this annual report 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 annual report.
This annual report should not be relied upon as a recommendation or forecast by IGO.
This annual report contains 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. These forward looking statements
are not a guarantee, assurance or prediction of future performance and involve known and unknown risks, uncertainties and other factors, 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, amongst other
things. 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 IGO’s periodic and continuous disclosure announcements lodged with the ASX.
Forward looking statements only apply at the date of this annual report. 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. IGO cautions against reliance on any forward looking
statement or guidance, particularly in light of the current economic climate and significant volatility, uncertainty and disruption, including that caused by the
COVID-19 pandemic. Past performance cannot be relied on as a guide of future performance.
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 annual report 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 30 January 2020 entitled
‘CY19 Mineral Resource and Ore Reserve Statement’, 16 October 2019 entitled ‘PRX: Lake Mackay JV Update – New Gold Prospect Identified’, 12 December
2019 entitled ‘PRX: Lake Mackay JV – 97% Co and Mn recovered in Leach Extraction’, and 29 July 2020 entitled ‘June 2020 Quarterly Activities Report’, and for
which Competent Persons’ consents were obtained. The Competent Persons’ 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 IGO’s Mineral Resource and Ore Reserve Statement
released to the ASX on 30 January 2020 and for which Competent Persons’ consents were obtained. The Competent Persons’ 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 16 October 2019, 12 December 2019, 30 January 2020 and 29 July 2020 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 Persons’ findings are presented have not been materially modified from
the original ASX announcement.