2021 Annual Report

Directors’ Report 30 June 2021 The Nova Operation generated A$404.9 million cash flows from operating activities, which was a result of 22,051 tonnes of payable nickel sold (FY20: 22,260 tonnes), 10,752 tonnes of payable copper sold (FY20: 13,115 tonnes) and 454 tonnes of payable cobalt sold (FY20: 390 tonnes) sold during the year. Tropicana Operation generated cash from operating activities of A$139.7 million following the sale of 110,402 ounces of gold. Cash flow from operating activities also included A$63.8 million cash outflow for exploration and evaluation expenditure and A$29.9 million cash outflow for corporate, net borrowing and other costs. Cash outflows from investing activities increased to A$1,065.0 million for the year, up from A$115.3 million in FY20. Total payments of A$1,855.4 million were made by the Group for its investment in the new Lithium JV with Tianqi over its Australian lithium assets, while proceeds, net of costs, of A$862.3 million were received on the sale of the Group’s 30% interest in the Tropicana JV. Cash outflows for development expenditure related predominately to waste stripping and underground development at the Tropicana Operation (A$68.2 million). Proceeds from financial assets include the sale of shares in New Century Resources Limited for A$27.0 million. During the year, IGO also received deferred consideration totalling A$16.1 million for the third and final instalment of the divestment of the Jaguar Operation in FY18. Cash flows from financing activities during the financial year included proceeds from the issue of ordinary shares, totalling A$765.8 million, with corresponding share issue costs of A$16.7 million. Furthermore, cash outflows from financing activities included repayment of outstanding borrowings totalling A$57.1 million and transaction costs of A$17.5 million relating to the establishment of the new financing facilities during the year. Finally, the Company paid dividends totalling A$29.6 million during the year. At the end of the financial year, the Group had cash and cash equivalents of A$528.5 million and marketable securities of A$110.9 million (FY20: A$510.3 million and A$107.8 million respectively). The Company has undrawn debt facilities of A$450.0 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 The Nova deposit was discovered in July 2012, with the Operation reaching nameplate ore production in the September 2017 quarter. Nova continued to deliver strong operational performance in FY21, exceeding production guidance for all metals. In FY21, a total of 1,594kt of ore was mined at an average grade of 2.04% nickel and 0.86% copper. The Nova process plant milled 1,602kt of ore at an average nickel and copper grade of 2.06% and 0.87% respectively for the year, to produce 29,002t of nickel and 13,022t of copper. Nickel metallurgical recoveries in the processing plant generally performed in line with modelled recoveries at 87.9%, while copper recoveries were 88.6% for the year. Nova revenue for the period was A$668.8 million, compared to A$593.3 million for the prior year. This was generated through concentrate sales during the period sold to BHP Nickel West Pty Ltd and Trafigura Pte Ltd, with sales amounting to 22,051 tonnes of payable nickel, 10,752 tonnes of payable copper and 454 tonnes of payable cobalt. Nickel cash costs per payable pound, which comprises the costs of producing and selling nickel concentrates from the mine site and includes credit adjustments for copper and cobalt sales, were A$1.85 per payable pound for the year. Below is a summary of the key physical and financial information relating to the Nova Operation. NOVA OPERATION 2021 2020 Total revenue A$'000 668,841 593,274 Segment operating profit before tax A$'000 262,945 182,173 Total segment assets A$'000 1,086,380 1,181,867 Total segment liabilities A$'000 100,306 92,862 Ore mined tonnes 1,593,975 1,546,308 Nickel grade % 2.06 2.31 Copper grade % 0.87 0.98 Cobalt grade % 0.08 0.09 Ore milled tonnes 1,602,443 1,514,268 Metal in concentrate - Nickel tonnes 29,002 30,436 - Copper tonnes 13,022 13,772 - Cobalt tonnes 1,084 1,142 Metal payable - in concentrate produced - Nickel tonnes 22,711 22,049 - Copper tonnes 12,026 12,606 - Cobalt tonnes 461 389 Nickel cash costs and royalties* A$/lb total Ni metal payable 1.85 2.41 Nickel All-in Sustaining Costs** A$/lb total Ni metal payable 2.16 2.74 * Includes credits for copper and cobalt. ** Includes cash costs, royalties and sustaining capex. 42 —IGO ANNUAL REPORT 2021