IGO : June 2022 Quarterly Activities Report

QUARTERLY REPORT

Period Ended 30 June 2022

IGO DELIVERS ON FY22 PRODUCTION AND COST GUIDANCE

Quarterly Summary

• Group sales revenue of A$278M and underlying EBITDA1 of A$258M for the Quarter, driven by record sales revenue at Nova and increased net profit from TLEA.
• IGO underlying free cash flow1 of A$210M driven by A$209M free cash flow generated at Nova and inaugural dividend of A$71M from TLEA in June 2022.
• Nova nickel production was 3% higher Quarter on quarter (QoQ) and within guidance at 6,509t while cash costs were also within guidance at A$2.24 per payable pound. FY22 nickel production was also within guidance at 26,675t, while copper production was at the lower end of guidance at 11,483t. FY22 cash costs were better than guided at A$1.95 per payable pound.
• Greenbushes spodumene concentrate production was 25% higher QoQ at 338kt for the Quarter (on a 100% basis) at a COGS (ex-royalties) within IGO's guidance of A$254/t. FY22 production and costs were also within IGO's guidance at 1,135kt at a COGS (ex-royalties) of A$238/t.
• At Kwinana, the first production of battery grade lithium hydroxide (LiOH) during the Quarter was an important milestone, allowing qualification processes to commence with respective offtake customers.
• Net debt of A$533M with cash on balance sheet of A$367M and A$900M in new debt facilities following the acquisition of Western Areas Limited (Western Areas) during the Quarter for cash consideration of A$1,262M.
• IGO completed the acquisition of Western Areas via a scheme of arrangement on 20 June 2022. The net assets of Western Areas have been included in IGOs accounts from this date onwards2, including cash acquired of A$94M and net cash outflows of A$19M for the 10 days to 30 June 2022.
• Quarterly activities for the assets acquired from Western Areas are included in this Quarterly Report. Notably, reported production at Forrestania was lower QoQ, due largely to the impact of COVID-19 on underground equipment and operator availability, while project development activities at Cosmos were progressed in accordance with plan.
• IGO is currently implementing an optimisation strategy and plan for the Cosmos development to include additional capital development underground to create more mining areas and to expand the processing plant capacity from 0.75Mtpa to 1.1Mtpa.

Peter Bradford, IGO's Managing Director & CEO commented: "We have delivered a strong finish to FY22 with safe and consistent operational performance across the business, combined with stronger metal prices, resulting in another highly profitable quarter.

"Nova and Greenbushes delivered production and cash costs within or better than guidance, first battery grade lithium hydroxide was produced at Kwinana, we received a first dividend distribution from the lithium joint venture and we progressed many organic growth opportunities across the business. In parallel, we have completed the transaction to acquire Western Areas and have made substantial progress with the integration of Western Areas into IGO.

The momentum for clean energy continues to grow and IGO is well placed to play an important role during this exciting period in human history."

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. IGO completed the acquisition of Western Areas on 20 June 2022. The pro-forma (100%) operating and financial results of Western Areas have been included for information purposes only, unless otherwise stated.

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	4Q221	3Q221	FY22		FY22 Guidance
	Nova nickel		t	6,509	6,290	26,675		25,000 to 27,000
	Nova copper		t	2,814	2,762	11,483		11,500 to 12,500
	Nova cash costs2		A$/lb Ni	2.24	1.86	1.95		2.00 to 2.40
	Forrestania nickel		t	2,860	3,339	14,028		No IGO guidance
	Forrestania cash costs2		A$/lb Ni	8.46	8.54	8.02		No IGO guidance
	Greenbushes spodumene3		kt	338	270	1,135		1,100 to 1,250
	Greenbushes COGS		A$/t	254	235	238		225 to 275
	(excluding royalties)4

1. 4Q22 is the three months ending 30 June 2022 and 3Q22 is the three months ending 31 March 2022.
2. Cash costs reported per pound of payable metal produced inclusive of royalties and net of by-product credits.
3. 100% attributable Greenbushes production, including both technical grade and chemical grade spodumene concentrate.
4. COGS is IGO's estimate of cost of goods sold and is inclusive of ore mining costs, processing, general and administrative, selling & marketing, inventory movements with or without royalty expense (as applicable).
5. Kwinana Refinery is not yet in commercial production and therefore no reporting is available. Production and cash cost guidance for the Kwinana Refinery is expected to be provided once commercial production is achieved.

FINANCIAL SUMMARY

	Units	4Q221	3Q221	QoQ	FY22
Financials
Sales Revenue	A$M	277.9	245.5	13%	900.6
Underlying EBITDA2	A$M	258.4	232.6	11%	716.9
Profit After Tax	A$M	107.2	133.0	(19%)	330.9
Net Cash from Operating Activities3	A$M	231.6	(78.0)	397%	357.1
Underlying Free Cash Flow3	A$M	209.8	(82.5)	354%	312.1
Cash	A$M	367.1	440.2	(17%)	367.1
Net Cash (Debt)	A$M	(532.9)	440.2	n/a	(532.9)

1. 4Q22 is the three months ending 30 June 2022 and 3Q22 is the three months ending 31 March 2022.
2. Underlying EBITDA includes IGO's share of NPAT from the Tianqi Lithium Energy Australia (TLEA) Joint Venture.
3. Net Cash from Operating Activities and Underlying Free Cash Flow includes the dividend from TLEA of A$70.7M in 4Q22.

SAFETY, SUSTAINABILITY & GOVERNANCE

Safety & Wellbeing

Total Reportable Injury Frequency Rate (TRIFR) for the 12 months to 30 June 2022 was 14.1 (compared to

11.2 as at 31 March 2022). This change was largely due to an increase in recorded soft tissue injuries related to strains and sprains, however there were no material safety incidents across IGO's managed activities during the Quarter.

IGO experienced higher positive COVID-19 cases and related absenteeism in the Quarter in line with the Western Australia peak case load in May and June 2022. Case numbers and absenteeism has declined in July 2022. Throughout the Quarter, we maintained our precautionary measures, which included routine rapid antigen screening, use of close contact monitoring technology, and continuing to encourage good hygiene and social distancing practices.

Sustainability

During the Quarter, IGO was included in the Russell Group FTSE4Good Developed Index, a responsible investment index that helps investors identify companies, like IGO, that meet globally recognised corporate responsibility and sustainability standards.

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QUARTERLY REPORT

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

IGO has continued to actively engage with Traditional Owners and relevant stakeholders during the Quarter, including meetings with various Traditional Owner groups and the completion of multiple heritage surveys across IGO's exploration and development projects, including in relation to the Silver Knight mining lease application and mining and exploration agreement for the Raptor Project in the Northern Territory.

LITHIUM BUSINESS

TLEA Joint Venture (IGO 49%)

TLEA (or Tianqi Lithium Energy Australia Pty Ltd) is an incorporated joint venture between IGO (49%) and Tianqi Lithium Corporation (Tianqi) (51%) focused on existing upstream and downstream lithium assets located in Western Australia, which comprise a 51% stake in the Greenbushes lithium operation and a 100% interest in the Kwinana Refinery.

IGO's share of net profit from TLEA was 68% higher QoQ at A$101.8M (3Q22: A$60.5M) due to 41% higher spodumene concentrate sales at Greenbushes and marginally higher spodumene sales price.

IGO received an inaugural dividend from TLEA of US$49.0M (A$70.7M) during the Quarter.

Greenbushes Operation, Western Australia (IGO 24.99%)

Greenbushes	Units	4Q222	3Q222	FY22	FY22 Guidance
Spodumene Concentrate1	kt	338	270	1,135	1,100 to 1,250
COGS3 (ex-royalties)	A$/t	254	235	238	225 to 275
COGS3	A$/t	618	476	457	350 to 400

1. 100% attributable Greenbushes production, including both technical grade and chemical grade spodumene concentrate.
2. 4Q22 is the three months ending 30 June 2022 and 3Q22 is the three months ending 31 March 2022.
3. COGS is IGO's estimate of unit cost of goods sold and is inclusive of ore mining costs, processing, general and administrative, selling & marketing, inventory movements and royalty expense.

Production

Greenbushes spodumene concentrate production was 25% higher QoQ at 337,780t for the Quarter (on a 100% basis) at a COGS (ex-royalties) within guidance of A$254/t. FY22 production and costs were also within guidance at 1,135kt at a COGS (ex-royalties) of A$238/t.

Production details and financials are provided in Table 4 in Appendix 3.

Tonnes		Greenbushes Production		A$/t sold
300,000				304,896	$300
250,000	$219	$242	$235	$254	$250
200,000	228,547	218,211	229,842		$200
150,000					$150
100,000					$100
50,000					$50
0	39,130	40,448	40,622	32,884	$-
1Q22	2Q22	3Q22	4Q22

Chemical Grade Spodumene Production Technical Grade Spodumene Production

COGS ex Royalties ($/t sold)

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QUARTERLY REPORT

Material mined of 1.65 million bank cubic metres was a record quarterly volume and included 1.03Mt of ore at an average grade of 2.53% Li2O, comprising 0.91Mt of chemical grade ore and 0.12Mt of technical grade ore.

Processing performance was generally improved this Quarter due to better equipment availability, higher grade and higher recoveries. Of note:

• TGP (Technical Grade Plant) operations were stable QoQ
• CGP1 (Chemical Grade Plant 1) production benefited from higher feed grades and improved recovery
• CGP2 (Chemical Grade Plant 2) continued to ramp up with improved throughput, recovery and production QoQ. Further ramp up and optimisation is expected in coming quarters
• TRP (Tailings Retreatment Plant) continued to ramp up with higher production QoQ as a result of higher recovery.

Major Capital Projects

CGP3 (Chemical Grade Plant 3) construction was approved in March 2022 and initial work has commenced. In parallel, a number of infrastructure work programs are being progressed to support the expansion. These include: construction of new tailings dam (TSF4), construction of a new mine services area to support the expansion of mining activity from 2023, expansion of the power supply connection to the grid, expansion of water storage facilities and construction of miscellaneous workshops, warehouses and offices.

Financial

Greenbushes recorded sales revenue of A$867M for the Quarter, up 59% from 3Q22. This increase was primarily driven by a 41% increase in spodumene concentrate sales, reflecting the increase in production and a marginally higher realised spodumene price QoQ of US$1,755/t FOB3. The chemical grade spodumene price remained unchanged at US$1,770/t FOB for the Quarter.

Underlying EBITDA, on a 100% basis, was A$650M, at an EBITDA margin of 75% (3Q22: 78%).

IGO expects the chemical grade transfer price for the first half of FY23 to be US$4,187/t4 FOB, offset in the September 2022 quarter by the sale of 34kt of chemical grade spodumene in July 2022 that was scheduled to be sold in 4Q22. This delayed shipment will be priced at the outgoing 4Q22 price of US$1,770/t. Technical grade spodumene pricing is subject to ongoing contracts and pricing is considered commercially sensitive.

Kwinana Refinery, Western Australia (IGO 49%)

Fully automated battery grade lithium hydroxide refinery located in Kwinana, Western Australia, comprising Train I (in trial production) and Train II (awaiting construction recommencement): IGO 49%.

Trial Production

The first production of battery grade LiOH was achieved at the Kwinana Refinery in May 2022, representing a major milestone for the lithium joint venture. The refinery underwent a planned three-week shutdown across May and June 2022 before re-commencing production at Quarter-end. A total of 88t LiOH was produced during the Quarter, including 34t battery grade LiOH.

Production of battery grade LiOH allows the product qualification process with offtake partners, which is expected to take four to eight months to complete.

IGO expects Train I LiOH production to ramp up concurrently with this qualification process over the coming quarters in anticipation of the plant reaching commercial production in FY23.

1. FOB is a shipping term for free on board designated by Incoterms® 2020 rules.
2. Chemical grade spodumene transfer price is set every six months based on the average price reported by three reporting agencies (Benchmark Mineral Intelligence, Fast Markets and Asian Metal) on a FOB basis for the three months prior to the six month period, less 5% volume discount

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QUARTERLY REPORT

Major Capital Projects

Several work streams to enable the recommencement of construction for Train II were progressed, including engineering, procurement and construction management contract drafting, approved early works programs, redesign and re-engineering requirements capture and documentation. IGO expects an investment decision during FY23.

Financial

Quarterly EBITDA and commissioning capital expenditure at Kwinana were negative A$3.3M and A$18.6M respectively (3Q22: negative A$16.6M and A$6.9M respectively).

NICKEL BUSINESS

Nova Operation, Western Australia (IGO 100%)

Nova	Units	4Q221	3Q221	FY22	FY22 Guidance
Nickel in concentrate	t	6,509	6,290	26,675	25,000 to 27,000
Copper in concentrate	t	2,814	2,762	11,483	11,500 to 12,500
Cobalt in concentrate	t	233	237	982	900 to 1,000
Cash cost (payable)	A$/Ib Ni	2.24	1.86	1.95	2.00 to 2.40

1. 4Q22 is the three months ending 30 June 2022 and 3Q22 is the three months ending 31 March 2022.

Nova nickel production was 3% higher QoQ and within guidance at 6,509t, while cash costs were also within guidance at A$2.24 per payable pound. FY22 nickel production was also within guidance at 26,675t, and 11,483t of copper production was at the lower end of guidance. Cash costs were better than guided at A$1.95 per payable pound.

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

Production

Mining ore volumes were higher QoQ at 427kt (3Q22: 380kt) while underground development advance totalled 532m for the Quarter with one development crew.

Processing throughput was also higher QoQ at 429kt of ore (3Q22: 409kt) at an average nickel and copper

grade of 1.75% and 0.71% (3Q22: 1.80% and 0.72%), respectively. The higher throughput was largely attributable to higher runtime and only one planned shutdown completed in the Quarter. Nickel recoveries were higher than the previous quarter at 86.5% (3Q22: 85.5%), while copper recoveries were lower than the previous quarter at 86.7% (3Q22: 87.4%). Work programs to continue the optimisation of both nickel and copper recoveries are ongoing.

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