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DIRECTORS’ REPORT
74 Independence Group NL
Directors' report
30 June 2015
Operating and financial review (continued)
Operations (continued)
Jaguar Operation
The Jaguar Operation was acquired by the Company from Jabiru Metals Limited in 2011. The Operation is located
60km north of Leonora and 250km north of Kalgoorlie. Active mining is currently underway in the Bentley underground
mine located 6km south of the Jaguar processing facility which is used to beneficiate the ore mined to produce zinc and
copper concentrates. These concentrates are trucked to the Geraldton port for shipping to customers primarily in Asia.
The copper concentrate contains significant levels of silver and gold as by-products, which attract precious metal credits
that contribute significantly to the Group’s cash flows and revenue. The zinc concentrate has minor amounts of silver in
its concentrate.
In addition, both near mine and greenfields exploration targets continue to be investigated for potential to add mine life
to the operation. Two potential areas are projects known as the ‘Bentley deeps', beneath the existing Bentley
underground mine, and Triumph, located 6km north of the Jaguar processing facility. Both projects are being targeted in
the 2016 financial year for drilling, once completed they will be further evaluated.
As it did last financial year, the performance of the Bentley underground mine continued to outperform the previous
year; ore mined increased by 13% and ore milled increased by 11%. Copper grade fell 10% to 1.8% while zinc grades
mined were constant at 10.6%. This variation in run of mine grades is an outcome of mine scheduling and is not as a
result of resource reconciliation as both reserve and reserves are reconciling well. Similar to nickel sales, copper and
zinc concentrate sales are paid on a quotational period that varies between one and four months, with generally 90% of
the sales receipt payable by the customer shortly after shipment. The one month or four month average LME copper
and zinc price ultimately determines the final price paid by the customer.
Based on current ore reserves, the Bentley underground mine is currently anticipated to have a life of approximately two
and a half years.
The table below outlines the key results and operational statistics during the current and prior year.
Jaguar Operation
2015
2014
Total revenue
$'000
164,016
141,795
Segment operating profit before tax
$'000
47,665
42,703
Total segment assets
$'000
134,569
102,828
Total segment liabilities
$'000
24,374
30,535
Ore mined
Tonnes
485,302
431,362
Copper grade
%
1.8
2.0
Zinc grade
%
10.6
10.6
Silver grade
g/t
156
145
Gold grade
g/t
0.7
0.7
Ore milled
Tonnes
488,466
441,867
Metal in concentrate
%
- Copper
Tonnes
7,380
7,692
- Zinc
Tonnes
44,999
41,162
- Silver
Ounces
1,876,384
1,657,461
- Gold
Ounces
4,439
4,834
Metal payable (IGO share)
- Copper
Tonnes
7,090
7,396
- Zinc
Tonnes
37,551
34,258
- Silver
Ounces
1,293,858
1,233,972
- Gold
Ounces
4,110
4,467
Zinc cash costs and royalties*
A$/lb Total Zn Metal Produced
0.43
0.31
*Cash costs include credits for copper, silver and gold
The Jaguar Operation also constitutes an operating segment. Segment revenue increased by 16% during FY2015. The
main drivers of this result were an increase in zinc revenue of 48%, due to a combination of 30% higher payable zinc
sold and 18% higher realised prices. Copper revenue decreased 10% due to lower realised prices.
Independence Group NL
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