IGO Interactive Annual Report 2020

Nova Operation NICKEL-COPPER-COBALT IGO 100% 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 Resources 1 234,000t Ni, 94,000t Cu, 8,000t Co Reserves 1 177,000t 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. 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. 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 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. 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. AT A GLANCE CASE STUDY: COPPER AND NICKEL RECOVERY IMPROVEMENTS AT NOVA Flotation circuit at Nova. 20 — IGO ANNUAL REPORT 2020 IGO ANNUAL REPORT 2020— 21