IGO Interactive Annual Report 2019

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 30 JUNE 2019 Notes to the consolidated financial statements 30 June 2019 (continued) 21 Financial risk management (continued) (a) Market risk (continued) (ii) Commodity price risk (continued) Nickel Nickel concentrate sales have an average price finalisation period of two to three months until the sale is finalised with the customer. It is the Board’s policy to hedge between 0% and 50% of total nickel production tonnes. Copper Copper concentrate sales during the year had an average price finalisation period of up to three months from shipment date. It is the Board’s policy to hedge between 0% and 50% of total copper production tonnes. Gold It is the Board’s policy to hedge between 0% and 50% of forecast gold production from the Company’s 30% interest in the Tropicana Gold Mine. Diesel fuel It is the Board's policy to hedge up to 75% of forecast diesel fuel usage. Diesel fuel price comprises a number of components, including Singapore gasoil and various other costs such as shipping and insurance. The total of all costs represents the wholesale or Terminal Gate Price (TGP) of diesel. The Group only hedges the Singapore gasoil component of the diesel TGP, which represents approximately 40% of the total diesel price. At the reporting date, the carrying value of the financial instruments exposed to commodity price movements were as follows: Financial instruments exposed to commodity price movements 2019 $'000 2018 $'000 Financial assets Trade receivables 26,501 44,705 Derivative financial instruments - diesel hedging contracts 484 1,990 Net exposure 26,985 46,695 The following table summarises the sensitivity of financial instruments held at 30 June 2019 to movements in the nickel price, with all other variables held constant. Trade receivables valuation uses a sensitivity analysis of 5.0% (2018: 5.0%). Impact on post-tax profit Sensitivity of financial instruments to nickel price movements 2019 $'000 2018 $'000 Increase/decrease in nickel price Increase 2,924 3,326 Decrease (2,924) (3,326) The following table summarises the sensitivity of financial instruments held at 30 June 2019 to movements in the copper price, with all other variables held constant. Trade receivables valuation uses a sensitivity analysis of 5.0% (2018: 5.0%). Independence Group NL 41 IGO ANNUAL REPORT 2019 — 103