IGO : June 2021 Quarterly Activities Report

QUARTERLY REPORT

Period Ended 30 June 2021

NOVA BEATS GUIDANCE - TRANSFORMATIONAL LITHIUM

INVESTMENT AND TROPICANA SALE COMPLETED

Key Points

• IGO Group sales revenue of A$266M and underlying EBITDA1 of A$140M, resulting in solid EBITDA margins of 52% for the Quarter and 52% for FY21
• Net Profit after Tax of A$453M for 4Q21, which included A$385M post-tax gain on sale of Tropicana Operation
• Cash flow from Operating activities of A$133M, generating an underlying free cash flow1 of A$114M for the Quarter and A$363M for the year
• Nova's quarterly production and cash costs were both better than guidance resulting in full year production above guidance and full year cash costs of A$1.85/lb
• Nova's strong final Quarter generated an underlying EBITDA of A$149M, at an EBITDA margin of 66%, and underlying free cash flow of A$130M
• Tropicana divestment to Regis was completed2. Gold production to end of May 2021 of 63,248 ounces at an All-in Sustaining Cost of A$1,830 per ounce
• Transformational Lithium Transaction3 to form a new joint venture between IGO and Tianqi, setting IGO up to deliver on its clean energy metals strategy
• Mr Michael Nossal was appointed to the role of Chair of IGO, effective from 1 July 2021
• Post quarter-end, agreement reached for acquisition of Silver Knight nickel-copper- cobalt deposit and new exploration joint venture with the Creasy Group for A$45M

Peter Bradford, IGO's Managing Director & CEO commented:

"This is an opportune time to reflect on the many achievements our business has made over the last 12 months. Over FY21, our talented and committed team have safely delivered consistently strong operating and financial performance and have successfully reshaped our asset portfolio - transforming IGO into a future-facing resources business with a strategy focused 100% on clean energy metals.

"The repositioning of our portfolio was completed during the June 2021 Quarter, with both the Tropicana divestment and lithium transaction with Tianqi reaching financial close. Completing these transactions has been a key workstream for the business over recent months, and we are excited about the opportunity the new lithium joint venture presents to IGO and our shareholders.

"Performance from Nova has continued to impress, with full year production ahead of guidance for all metals, while cash costs finished FY21 at the lower end of the updated guidance range, which we adjusted lower during at the March 2021 quarter. This has resulted in record free cash flow generation from Nova of A$393M for the year - an outstanding result.

"With the two key transactions now complete and a strong June 2021 Quarter performance, IGO is well positioned with a cash position of A$528M and no debt. This balance sheet strength will enable us to fund future growth through exploration and disciplined mergers and acquisitions, while continuing to deliver cash returns to shareholders."

1. Refer to the Financial & Corporate section of this Quarterly Report for a description of underlying adjustments / exclusions. These adjustments, including underlying measures of EBITDA and free cash flow, are non-IFRS financial measures. They should not be considered as alternatives to an IFRS measure of profitability, financial performance or liquidity. All references to financial measures and outcomes in this Quarterly Report are to unaudited results.
2. Divestment of Tropicana to Regis Resources Ltd (ASX: RRL) (Regis). Refer ASX Release: IGO: IGO Limited: Completion of Tropicana Divestment, 31 May 2021.
3. Investment in the Australian assets of Tianqi Lithium Corporation (Tianqi) providing IGO with a 24.99% indirect interest in the world-

class Greenbushes Lithium Mining and Processing Operation and a 49% interest in the Kwinana Lithium Hydroxide Plant.

Suite 4, Level 5	PO Box 496	T. [phone]	igo.com.au
85 South Perth Esplanade	South Perth WA 6951	F. [phone]	IGO Limited
South Perth WA 6151	Western Australia	E. [e-mail]	ABN 46 092 786 304

QUARTERLY REPORT

PRODUCTION SUMMARY

	Units	3Q21	4Q21	FY21	FY21 Guidance
Nova nickel	t	6,816	7,887	29,002	27,000 to 29,000
Nova copper	t	3,035	3,538	13,022	11,000 to 12,500
Nova cash costs1	A$/lb Ni	1.83	1.28	1.85	2.40 to 2.80
Tropicana gold2	oz	82,393	63,248	364,751	348,333 to 394,167
Tropicana AISC	A$/oz	2,120	1,830	1,720	1,730 to 1,860

1. Cash costs reported per pound of payable metal produced inclusive of royalties and net of by-product credits. Guidance revised to A$1.80 - A$2.10/lb Ni (payable) in 3Q21 Quarterly Activities Report.
2. 100% attributable Tropicana production and pro-rata guidance are to 31 May 2021, being the date of completion of the Tropicana divestment to Regis Resources Limited.

EXECUTIVE SUMMARY

IGO Limited (ASX: IGO) (IGO, the Company or the Group) has completed the 2021 Financial Year (FY21) with strong results, both from a production and financial perspective, while also completing the formation of a new lithium joint venture (JV) with Tianqi Lithium Corporation (Tianqi) and the divestment of Tropicana, in line with its stated clean energy metals strategy. In addition, subsequent to Quarter end, agreement was reached with Creasy Group to acquire Silver Knight and form a new exploration joint venture.

Nova production bettered the top end of the guidance range for the June 2021 Quarter (4Q21 or Quarter) and for FY21, with nickel, copper and cobalt production for the Quarter of 7,887t, 3,538t and 285t respectively, and for FY21 of 29,002t, 13,022t and 1,084t respectively. Cash costs continued to improve to A$1.28 per payable pound for the Quarter (3Q21: A$1.83 per payable pound) and A$1.85 per payable pound for FY21.

On 30 June 2021, IGO announced the completion of the transaction to form a corporate JV between IGO and Tianqi over its Australian lithium assets. Current operations managed by the JV include a 51% stake in the world-class Greenbushes Lithium Mine (a JV with global lithium company Albemarle Corporation who hold 49%) and the 100% owned and operated Kwinana Lithium Hydroxide Refinery (Kwinana). Completion payments of US$1,325M (A$1,763M) to Tianqi for the Lithium Transaction were made on 30 June 2021.

During the Quarter, IGO also completed the Tropicana divestment to Regis Resources Ltd (Regis). Consequently, only production and financial results for Tropicana up to 31 May 2021 are included in IGO's reporting. For this period, Tropicana gold production (100%) was 63,248 ounces at an AISC of A$1,830 per ounce.

Sales revenue for the Quarter was up 44% on the prior quarter at A$266.2M, driven by higher nickel and copper concentrate sales volumes and positive commodity price movements. Underlying EBITDA increased 50% quarter on quarter (QoQ) to A$139.5M (3Q21: A$92.7M), resulting in a healthy Group EBITDA margin of 52%.

Net profit after tax (NPAT) for the Quarter was A$452.6M (3Q21: A$41.9M), which included a pre-tax gain on the divestment of Tropicana of A$556.8M (post tax gain of A$384.8M).

Total cash (and net cash) at the end of June 2021 was A$528.5M, a decrease of A$767.4M during the Quarter. Significant cash movements during the Quarter included the completion payment for the Lithium Transaction (A$1,762.8M), net cash receipts of A$862.3M for the proceeds from the Tropicana divestment, and strong operating cash flows of A$133.3M.

The Company retains undrawn debt facilities of A$450M.

Lastly, with effect from 1 July 2021, Mr Michael Nossal was appointed to the role of Chair of IGO, with Mr Peter Bilbe stepping into a Non-executive Director role.

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QUARTERLY REPORT

Key financial metrics for the Company compared to the previous quarter are summarised in the table below:

	Units	3Q21	4Q21	QoQ	FY21
Financials
Sales Revenue	A$M	185.1	266.2	44%	912.1
Underlying EBITDA	A$M	92.7	139.5	50%	474.6
Profit After Tax	A$M	41.9	452.6	981%	548.7
Net Cash from Operating Activities	A$M	71.1	133.3	87%	446.1
Underlying Free Cash Flow	A$M	51.4	114.3	122%	363.0
Cash & Net Cash	A$M	1,295.9	528.5	(59%)	528.5

SUSTAINABILITY / ESG

Safety

There were no material safety incidents across IGO's managed activities during the Quarter, with a 12-month rolling total reportable injury frequency per million hours worked (TRepIF) of 13.2 as of 30 June 2021 (compared to 15.3 as at 31 March 2021). Note that as of 30 June 2021, and in line with resource industry practice, IGO will exclude events that are categorised as a workplace illness from the TRepIF calculation.

Environment

There were no material environmental incidents across IGO's managed activities during the Quarter.

Community

There were no material community issues arising from IGO's managed activities during the Quarter. IGO continues to support our host communities and various charities through our Corporate Giving program.

Heritage & Land Access

During the Quarter, IGO actively engaged with Traditional Owners and relevant stakeholders to discuss the protection of cultural heritage and collaboration opportunities. This included discussions with numerous Native Title holders and Traditional Owners to progress negotiations on land access and heritage agreements and continued engagement on IGO's heritage protection and clearance processes.

Our Response to Climate Change & Decarbonisation

At IGO, we are accelerating our response to Climate Change and our plans to continue to reduce our carbon footprint. We expect to update the market further in 1H22, however, key initiatives that we plan to implement include:

• Implementation of an internal carbon price for our Scope 1 and 2 emissions that will put a value on carbon emissions within the business. The funds generated from the application of an internal carbon price will be deployed to reduce IGO's carbon footprint in alignment with our decarbonisation strategy. This expenditure is expected to be A$2-$4M for FY22.
• Continued implementation of emissions reduction projects across IGO to progress a number of projects that have already been identified and which would be regarded as economically and technically viable.
• Improve our understanding and reporting of our carbon footprint.
• Invest in carbon removal and offset projects.

Detailed reporting of this plan will be provided in our FY21 Sustainability Report.

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QUARTERLY REPORT

LITHIUM JOINT VENTURE

On 30 June 2021, IGO completed the transaction to form a new lithium joint venture (JV) with Tianqi Lithium Corporation (Tianqi) over its Australian lithium assets. IGO and Tianqi have formed a new globally focused lithium JV which is owned 49% by IGO and 51% by Tianqi. The JV is the exclusive vehicle for lithium investments outside of China for IGO and Tianqi.

The JV will initially focus on the existing upstream and downstream lithium assets located in Western Australia, which comprise a 51% stake in the world-class Greenbushes Lithium Mine (a JV with global lithium company Albemarle Corporation who hold 49%) and a 100% owned and operated interest in the Kwinana Lithium Hydroxide Refinery (Kwinana). Once commissioned, Kwinana will be the first fully automated lithium hydroxide refinery in Australia, producing battery-grade lithium hydroxide from high-quality spodumene concentrate from Greenbushes.

NOVA OPERATION

Underground nickel, copper, cobalt mine located on the Fraser Range, WA: IGO 100%.

Nova	Units	3Q21	4Q21	FY21	FY21 Guidance
Nickel in concentrate	t	6,816	7,887	29,002	27,000 to 29,000
Copper in concentrate	t	3,035	3,538	13,022	11,000 to 12,500
Cobalt in concentrate	t	256	285	1,084	850 to 950
Cash cost (payable)	A$/Ib Ni	1.83	1.28	1.85	2.40 to 2.801

1. Revised to A$1.80 - A$2.10/lb Ni (payable) in 3Q21 Quarterly Activities Report

Mining & Development

Underground development advance totalled 550m for the Quarter with one development crew.

A total of 402kt (3Q21: 405kt) of ore was mined at average grades of 2.22% nickel and 0.94% copper in the

Quarter (3Q21: 1.96% and 0.84% respectively). The paste filling system continues to operate well and above nameplate capacity.

Processing & Production

Nova production was higher than the prior quarter due to higher expected feed grades and higher recoveries, with nickel, copper, and cobalt production of 7,887t, 3,538t and 285t (3Q21: 6,816t, 3,035t and 256t) respectively.

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QUARTERLY REPORT

The Nova process plant milled 395kt of ore (3Q21: 406kt) at an average nickel and copper grade of 2.25%

and 0.95% (3Q21: 1.92% and 0.81%) respectively for the Quarter. Tonnes milled were in line with the previous quarter and expected production rates, with two planned shutdowns completed.

Nickel recoveries were higher than the previous quarter at 88.9% (3Q21: 87.6%) as a result of continued

optimisation. Average copper recovery was in line with the previous quarter at 87.7% (3Q21: 87.6%).

Financial

Nova sales revenue for the Quarter was A$225.5M, compared to A$131.4M in the prior quarter, largely driven by higher sales volumes due to higher quarter on quarter production and the timing of sales, and higher quotational period metals price changes. Nickel concentrate sales to BHP Billiton Nickel West Pty Ltd (BHP) and Trafigura Pte Ltd (Trafigura), totalled 65,876t for the Quarter (3Q21: 42,302t), resulting in the sale of 7,038t of payable nickel (3Q21: 4,442t payable nickel). Copper concentrate sales to Trafigura totalled 14,179t during the Quarter (3Q21: 4,134t), resulting in the sale of 4,010t of payable copper (3Q21: 1,203t payable copper).

Nova's average nickel price for the Quarter was A$22,836/t (3Q21: A$21,919/t), resulting in a positive price

variance of A$6.5M QoQ. Copper prices for the Quarter averaged A$12,398/t (3Q21: A$11,326/t), while

cobalt prices decreased to an average of A$59,000/t for the Quarter (3Q21: A$64,659/t). Nova's revenue included a positive revaluation of prior quarter receivables of A$6.5M, compared to a A$14.4M positive adjustment in 3Q21 from its prior quarter.

Underlying EBITDA increased to A$149.3M for the Quarter (3Q21: A$92.5M), representing an EBITDA margin of 66%.

Nova cash costs were A$1.28 per payable pound for the Quarter (3Q21: A$1.83 per payable pound). The lower result was due to higher QoQ production (A$0.61/lb) and higher by-product prices (A$0.34/lb). Offsetting these were higher production costs, primarily a result of lower capital development in the Quarter (A$0.19/lb) and offsite costs associated with higher shipping costs and royalties (A$0.23/lb).

Nova's Cash from Operating Activities increased by A$64.6M to A$135.5M, due primarily to increased shipment volumes resulting in higher sales receipts QoQ and lower inventory than in the previous quarter. Underlying free cash flow for the Quarter and year to date was A$130.4M and A$392.9M respectively.

A breakdown of production and financials are provided in Table 3 in Appendix 2.

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