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He said the decision to swiftly liquidate its company would review its cash allocation “On lithium, we have said we wouldn’t en-
position was best for both parties. framework at the beginning of 2021 given gage at an operating level because we don’t
“The market would’ve twigged anyway both Tropicana and Nova are in cash har- understand that business today. But if we
and the holding would’ve been an overhang vesting mode. could find the right tenure, we would explore
on New Century, stopping them doing a deal “We take a balanced approach but we to find a hard rock deposit which could com-
on it.” have fantastic cash flow from Tropicana and pete in that lowest cost quartile.”
With the Goro deal iced analysts ques- Nova so we can allocate consistent returns However, given the current woes of es-
tions will likely to return to another favoured and consistent investment in exploration tablished lithium miners, Bradford admitted
M&A topic at IGO; its 30% share of the Trop- and grow the balance sheet to fund future there could be room for an opportunistic
icana gold JV. growth, all at the same time,” he said. switch in tactics.
“That rumour has been doing the rounds “Come next year, we will revise that “Lithium prices are now at seven-year
for three or four years and is the most com- framework. We should have $600 million in lows, so we are revisiting that strategy and
mon question I get on calls,” Bradford said. cash by then so there is potential for a higher we are asking if it is worth looking at M&A in
“My consistent response is: ‘Tropicana as a allocation to shareholders. It is a fantastic the lithium space,” he said.
gold asset is not aligned with our strategy problem to have when you are generating IGO presentations have taken on an
but it’s a high-quality asset so it is core to so much cash.” obviously clean technology theme in re-
our portfolio.” One looming possible application of that cent years. Bradford acknowledged the
growing cash bal- company has a strong leaning towards the
ance is a new de- thematic but said any investment decisions
velopment. IGO would always be based on mining business
currently boasts a first principles.
six-year mine life at “There is broadly an attraction towards
Nova but if it is to responsible investors, but we don’t want
fulfil its longer-term to lose sight of the fundamentals,” he said.
aim of producing “We are looking for projects of scale, longev-
downstream battery ity and quality. We won’t jump into an aver-
products, it will need age project just because it is aligned with the
deeper mineral re- clean energy theme but the growing desire
serves. Bradford is to decarbonise the planet will result in more
acutely aware of the renewables, grid storage and electrification
need to find more of transport.”
tonnes. The main Despite not being a priority for the compa-
question is whether ny, Bradford sees advantage in IGO aligning
they will be nickel itself with the clean energy thematic.
at Nova or copper “There is a huge opportunity for mining
elsewhere. companies,” he said. “Employees, com-
With a six-year mine life at Nova, IGO is contemplating its next “All mining com- munities, investors; we all want to make a
growth move panies are always difference and leave a better planet for fu-
doing some M&A ture generations and I think without COVID
The gold mine – held in JV with Anglo- and I’ve made no secret of the fact we are this could’ve been bubbling along for years
Gold Ashanti Ltd – delivered 141,169oz gold looking but the problem is we have looked at without us truly understanding the benefits.
in FY20 at AISC of $1,171/oz, producing 24 projects at different phases; from desk- But suddenly, the air in cities has cleaned up
underlying EBITDA of $175 million for the top assessments to boots-on-ground, and within months and people are beginning to
year. IGO is understandably cautious about haven’t found a lot which interests us,” he recognise the size of the prize we have in
giving such an asset away for anything less said. front of us.”
than full market value. “Our strategic focus is about being more IGO is far from alone in aligning itself with
“We shouldn’t take it for granted that it will relevant in the clean energy metal space so renewables, EVs and battery technology
always be in the portfolio, but any sale would first prize will be nickel or copper projects with majors from Rio Tinto Ltd and BHP
rely on the value being well understood. My which deliver on a Nova scale or more, that Ltd to Anglo American plc and Glencore
view is that with Boston Shaker coming into is similar mine life and the same quality met- charting a path towards greater copper and/
production later this year and two more un- rics which is plus-50% EBITDA.” or nickel dominance. Could IGO be on the
derground prospects still to be developed, The rapidly evolving nature of battery and M&A radar for such companies?
Tropicana is only partway through its jour- renewable technology means there are new “M&A is always driven by two elements,
ney.” energy applications emerging every year. valuations today and whether we can see
For Bradford, there must be a compelling While IGO keeps a watching brief on this additional value which warrants paying a
reason to sell such a profitable asset. “entire encyclopedia of clean energy metals premium,” Bradford said. “For someone
“If we do sell, why would we be doing it? out there”, it is conscious of sticking with the with horsepower to make a play for IGO,
We could use the proceeds to give back to commodities it knows best. they would want to see more than six years
shareholders, but it would be a question of “We have pretty much ruled out every- mine life at Nova. When we put that drill hole
whether that is better than retaining the as- thing apart from copper and nickel,” Bradford which delivers the next 10 years of mine life;
set and producing a higher annual dividend.” said. “Given our understanding about them, that’s when potential predators will begin
Dividends are a regular part of the IGO our shareholders’ understanding about them looking.”
investment these days with the company’s and the fact they are both strongly aligned to – Dominic Piper
final dividend taking total FY20 dividends the clean energy theme, we would invest in
to 11c, up 1c from FY19. Bradford said the any stage of nickel or copper project.

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