2021 Annual Report

Notes to the consolidated financial statements 30 June 2021 (continued) 9 Inventories 2021 $'000 2020 $'000 Current Mine spares and stores 11,329 20,653 ROM inventory 8,553 44,656 Concentrate inventory 14,131 5,452 Gold in circuit - 1,980 Gold dore - 2,929 34,013 75,670 Non-current ROM inventory - 67,911 - 67,911 (a) Classification of inventory Inventory classified as non-current related to low grade (0.6g/t to 1.2g/t) gold ore stockpiles which were not intended to be utilised within the next 12 months but were anticipated to be utilised beyond that period. (b) Recognition and measurement (i) Ore, concentrate and gold inventories Inventories, comprising nickel, copper and cobalt in concentrate, gold dore, gold in circuit and ore stockpiles, are valued at the lower of weighted average cost and net realisable value. Costs include fixed direct costs, variable direct costs and an appropriate portion of fixed overhead costs. A portion of the related depreciation, depletion and amortisation charge is included in the cost of inventory. (ii) Mine spares and stores Inventories of consumable supplies and spare parts are valued at the lower of cost and net realisable value. Cost is assigned on a weighted average basis. Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of completion, and the estimated costs necessary to make the sale. The recoverable amount of surplus items is assessed regularly on an ongoing basis and written down to its net realisable value when an impairment indicator is present. (c) Key estimates and judgements The Group reviews the carrying value of inventories regularly to ensure that their cost does not exceed net realisable value. In determining net realisable value various factors are taken into account, including estimated future sales price of the product based on prevailing spot metals prices at the reporting date, less estimated costs to complete production and bring the product to sale. Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the amount of contained metal based on assay data, and the estimated recovery percentage based on the expected processing method. IGO Limited 23 Notes to The Consolidated Financial Statements 30 June 2021 IGO ANNUAL REPORT 2021 — 93