IGO Interactive Annual Report 2019

INDEPENDENT AUDITOR’S REPORT — IGO ANNUAL REPORT 2019 Carrying Value of Mine Properties Key audit matter How the matter was addressed in our audit Refer to Note 14 of the financial statements, for disclosure of the mine properties asset. 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. Our work included, but was not limited, to the following procedures: • 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 2019, and subsequent movements; - Considering commodity price assumptions at 30 June 2019, including forecasts; - Reviewing board and sub-committee meeting minutes, and holding discussions with key management, including non- finance personnel; - Assessing economic indicators for impacts on appropriate discount rates; and • We also assessed the adequacy of related disclosures in Note 14 to the financial statements. IGO ANNUAL REPORT 2019 — 125