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28 Independence Group NL
The Nova Optimisation Study, which
aims to improve the project’s net
present value and rate of return, is
focused on a number of value drivers
including:
•
accelerated development rates
and ramp-up
•
adjustments to the mine design
and scheduling to prioritise higher-
value ore in the early years of the
mine life
•
deferral of some underground
capital expenditure to later years,
when needed
•
capturing current contracted and
industry costs structures into the
modelling.
The Nova Optimisation Study is
expected to be completed in December
2015.
In parallel with the completion of
the Nova Optimisation Study, we are
conducting a review and re-targeting
exercise over our land holdings on the
Fraser Range and Tropicana belts to
develop a strategy for their systematic
exploration.
We are now well-positioned to
leverage off our increased scale to
deliver efficiencies in areas including
procurement and off-take as a result
of an enhanced bargaining position, as
well as having the potential to reduce
corporate costs compared to IGO and
Sirius as standalone entities. This is
expected to include the elimination of
duplication in compliance and listing
costs and an overall reduction in the
aggregate number of employees.
Our strong financial position will also
give us the capacity to pursue further
value-accretive growth opportunities.
You will recall that IGO had loan
facilities with National Australia Bank
Limited totalling $170 million. Since
announcing the Sirius acquisition, IGO
has terminated these loan facilities
and has entered into a syndicated
facility agreement with National
Australia Bank Limited, Australia and
New Zealand Banking Group Limited
and Commonwealth Bank of Australia
Limited for a $550 million committed
term finance facility on an unsecured
basis on competitive terms. This has
allowed us to also terminate the
$440 million project finance facility
that Sirius had put in place. Our new
facilities deliver an overall improvement
in present value.
During FY2015, Management
recommended, and the Board
approved, our updated Vision and
Mission statements as well as best
practice values. Our Vision is that
“We will be a diversified mining
company delivering superior returns
for all stakeholders”. One of the most
important aspects of our Mission is
“Achieving measured and sustainable
growth through high returns from
diverse, low cost, long-life assets”. The
addition of the Nova Project to our
portfolio of assets is very much aligned
with this mission. The Nova Project is
a high margin, long-life project with
significant exploration upside and
promises to be our flagship project for
some time to come.
I thank all shareholders for welcoming
me as Managing Director and I look
forward to your continued support in
FY2016. The Company’s employees and
I are striving to achieve measured and
sustainable growth.
Peter Bradford
Managing Director