2021 Annual Report

CLIMATE CHANGE The Group recognises the importance of providing timely and business-specific information on our approach to managing climate change related risks and opportunities to stakeholders and investors. In FY21, our reporting was once again aligned with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) and consolidated our carbon neutral strategy. Work programs completed during the financial year included a decarbonisation roadmap for the Nova Operation, the implementation of an internal carbon price, and the development of IGO’s carbon storage and offsets strategy. The full TCFD disclosure and further information regarding our management of climate-related risks and opportunities can be found in the 2021 Sustainability Report. OTHER EXTERNAL FACTORS AND RISKS • Operational performance including uncertain mine grades, seismicity, geotechnical conditions, grade control, in fill resource drilling, mill performance and skills and experience of the workforce – Contained metal (tonnes and grades) are estimated annually and published in resource and reserve statements, however actual production in terms of tonnes and grade vary as the orebody can be complex and inconsistent – Active underground mining operations can be subjected to varying degrees of seismicity. This natural occurrence can represent safety, operational and financial risk and is actively monitored • Business risk associated with the Lithium JV. IGO is able to exert significant influence over the Lithium JV and its operations by virtue of its equity accounted investment into the Lithium JV, however IGO will remain subject to the alignment of JV party decision making which may impact earnings and cashflow • Exploration success or otherwise due to the nature of an ever-depleting reserve/resource base, the ability to find or replace reserves/resources presents a significant operational risk • Operating costs including labour markets, skills availability and productivity. The availability of labour and specific skillsets is one of the main cost drivers in the business and as such can materially impact the profitability of an operation • Changes in market supply and demand of products. Any change in supply or demand impacts on the ability to generate revenues and hence the profitability of an operation • Changes in the technological advancement of the energy storage market, and the discovery and adoption of alternate product streams • Changes in government taxation legislation; and • Assumption of estimates that impact on reported asset and liability values. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS On 9 December 2020, the Company announced that it had entered into a binding agreement with Tianqi to form a JV over Tianqi’s Australian lithium assets. Total consideration for the transaction was US$1,395.3 million (A$1,855.4 million). The Company funded the transaction through a combination of an equity raising, proceeds from the sale of Tropicana and existing cash reserves. Completion of the transaction was announced by the Company on 30 June 2021. In December 2020, the Company conducted a fully underwritten institutional placement (Placement) and a 1 for 8.5 accelerated pro-rata non-renounceable entitlement offer (Institutional Entitlement Offer) of new fully paid IGO shares. The Placement comprised the issue of 96,960,219 shares in the Company at a price of A$4.60 per share (Offer Price), and the Institutional Entitlement Offer the issue of 57,195,061 shares in the Company at the Offer Price, resulting in proceeds of A$696.1 million, net of costs. On 19 January 2021, the Company announced the successful completion of the retail component of its 1 for 8.5 accelerated pro-rata non-renounceable entitlement offer (Offer), resulting in the issue of 12,315,499 shares. The Offer raised A$53.4 million, net of costs, at an offer price of A$4.60 per share. On 13 April 2021, the Company announced that it had entered into a binding agreement with Regis for the sale of its 30% interest in the Tropicana Gold Mine. The execution of the binding sale agreement marked the completion of the Tropicana strategic review which was announced in September 2020. On 31 May 2021, the Company announced the completion of the divestment transaction. On 23 December 2020, the Company entered into a new Syndicated Facility Agreement (Facility Agreement) totalling A$1,100 million, which was originally established to fund the acquisition of the 49% interest in the Lithium JV. Following the divestment of the Company’s interest in the Tropicana JV, the facility was not required as a source of funds to fund the Lithium JV acquisition. As at the date of this report, the facility has been restructured to consist of a A$450 million amortising revolving credit facility, expiring in June 2024. There have been no other significant changes in the state of affairs of the Group during the year. IGO ANNUAL REPORT 2021— 45