IGO Interactive Annual Report 2020

CFO Report HIGHLIGHTS FY20 $M FY19 $M FY18 $M Total revenue and other income 892 793 781 Underlying EBITDA 1 460 341 339 Profit after tax 155 76 53 Net cash flow from operating activities 398 372 278 Underlying free cash flow 1 311 278 138 Total assets 2,293 2,190 2,175 Cash 510 348 139 Marketable securities 108 28 24 Total liabilities 367 341 396 Shareholders’ equity 1,926 1,849 1,779 Net tangible assets per share ($ per share) $3.26 $3.13 $3.03 Dividends per share paid 14.0 4.0 2.0 FY20 FINANCIAL SUMMARY 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. HISTORICAL METAL PRODUCTION 1 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 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. SCOTT STEINKRUG CHIEF FINANCIAL OFFICER SHARE PRICE PERFORMANCE 1 NICKEL (t) COPPER (t) COBALT (t) GOLD (oz) 3 35,000 30,000 15,000 10,000 5,000 0 25,000 20,000 FY16 FY17 FY18 FY19 FY20 15,000 12,000 9,000 6,000 3,000 0 FY16 FY17 FY18 FY19 FY20 15,000 12,000 9,000 6,000 3,000 0 3,000 FY16 FY17 FY18 FY19 FY20 20,000 15,000 10,000 5,000 0 FY16 FY17 FY18 FY19 FY20 MAX: A$6.91 MIN: A$3.40 1 As at market close 21 August 2020. 1 See Glossary of Terms for definition. 6 — IGO ANNUAL REPORT 2020 IGO ANNUAL REPORT 2020— 7