27 / 164
Annual Report 2015 27
We also expect to expand the carbon-
in-leach circuit to maintain residence
time and therefore gold recovery levels
at the expected higher thoughput rate.
Post FY2016, we expect the processing
plant throughput rate to be about
7Mtpa, which, at the average reserve
grade of 2 g/t, is expected to deliver
average annual gold production of
approximately 400,000 ounces.
The Long Operation continues to be an
important source of free cash flow for
the Company. The mine’s nickel metal
production was greater than the top
end of the original FY2015 guidance
range by 2%. Cash costs were again
kept at a low level through cost control
measures. Cash costs were ~5% below
the lower end of the FY2015 guidance
range provided in July 2014.
Post year end, IGO announced that
it has implemented a number of
changes to the mining plan at its
Long Operation, which unfortunately
included 28 redundancies. The changes
have been made in response to the
current weakness in nickel prices
to ensure that the Long Operation
remains profitable and sustainable.
Future mining activities at the Long
Operation will focus on longhole
stoping, supported by twin boom
jumbo development. The revised
mining plan will result in a reduction in
operating costs for the Long Operation
of approximately 12% and a reduction
in contained nickel tonnes produced by
approximately 8%.
We deeply regret the impact that these
changes will have on our people and
it is a decision that has not been taken
lightly. IGO remains committed to the
Kambalda community and the broader
Goldfields community.
The Jaguar Operation has had an
excellent FY2015 and, despite a
planned shutdown at the processing
plant to change out the SAG mill, metal
production in concentrate of zinc,
copper and silver increased during
FY2015 and was ahead of the FY2015
guidance range provided in July 2014.
The Jaguar processing plant has
demonstrated during FY2015 that it
can maintain higher production rates
than historically achieved. Recognising
this, we have been working to improve
productivity and therefore production
from the Bentley underground mine.
Production rates improved significantly
in FY2015 and we have made good
progress towards our goal of mining
and processing 500,000tpa of ore.
We continued to place significant
emphasis on exploration during FY2015,
spending $37 million on brownfields
and greenfields exploration. The
Company continues to see excellent
potential at Tropicana, Long and
Jaguar as well as the prospects at joint
venture tenements.
Of note during FY2015, drilling at
Moran South at the Long Operation
intersected nickel mineralisation. At the
Jaguar Operation, drilling has outlined
a new discovery at Triumph, which is
located 6km north of the processing
plant, and intersected massive sulphide
mineralisation at depth below the
Bentley resource wire frame. At
Tropicana, 3D seismic studies have
identified the potential for continued,
near surface mineralisation to the
south-east of the Boston Shaker pit.
On 25 May 2015, IGO and Sirius
Resources NL announced the execution
of a binding Scheme Implementation
Deed under which it was agreed
that IGO would acquire all the
issued capital of Sirius by way of an
Acquisition Scheme of Arrangement
(the “Acquisition Scheme”). Under
the Acquisition Scheme, which was
completed in September 2015, Sirius
shareholders received 0.66 IGO shares
and 52 cents cash for each Sirius share.
Sirius shareholders also participated
pro-rata in the demerger of the Polar
Bear and Scandinavian exploration
assets.
The transaction has created a leading
diversified Australian mining company
with a strong portfolio of high margin/
long-life mining assets, across a range
of base and precious metals.
The combination of the two companies
has a clear strategic rationale and
will generate significant value for
the shareholders of both companies.
Shareholders will continue to
have exposure to IGO’s portfolio
of production, development and
exploration projects but will also
benefit from the growth potential of
the world-class Nova Project, which is
fully financed, under construction and
expected to produce first concentrates
in late 2016.
The development of the Nova Project
to create continued shareholder value
is a key focus for IGO. This will be
achieved through the delivery of the
Nova Optimisation Study in December
2015 and further de-risking of the
commissioning and operational phases
of the project in 2016. Furthermore,
and with the backing of IGO’s cash
generating projects, we are very
optimistic about the opportunity
to realise the potential of our land
holdings on the under-explored
Fraser Range and Tropicana belts. This
underexplored province has delivered
two of Australia’s best gold and base
metals discoveries in the last 15 years
and we are confident that more
discoveries are ahead of us.
We welcome our new shareholders,
employees and contractors that have
joined us from Sirius. I am particularly
delighted that Rob Dennis, most
recently Chief Operating Officer of
Sirius, has joined the IGO management
team as General Manager Project
Development, accountable to me
for the delivery of the Nova Project
through to production. It is especially
encouraging that the majority of the
Nova Project team have continued
with IGO and the Nova Project.
The Nova Optimisation Study, which will
be to a bankable feasibility study level,
commenced during the Acquisition
Scheme process with the primary
objective of capturing additional value
not identified as part of the original
Nova Definitive Feasibility Study (DFS).
THE SIRIUS TRANSACTION
HAS CREATED A LEADING
DIVERSIFIED AUSTRALIAN MINING COMPANY WITH A STRONG
PORTFOLIO OF MINING ASSETS.