I note that Helium has recently asked questions on this company....

I note that Helium has recently asked questions on this company. I've been unable to attend AGMs in recent times but I came across this earlier posting. Having reread it, I'm sure that I'd only need to make minor changes to the 2010 AGM.
Todays AGM (2007) My fourth AGM. You would think by now I would be prepared for another Chris Bonwick presentation, like a good nights sleep for starters, and several cups of coffee but instead I forgot and came away reeling from another overdose of facts and figures. Do not let me give you a wrong impression. This was not one of those style over substance deliveries. This was a conservative but exhilarating set of prospects for those lucky enough to have chosen to invest in a company that has an air about it that can best be described with just one word -Integrity. I simply do not learn. Each year I come away determined to increase my holdings by taking advantage of any dips. I will never have enough.
For those who are reasonably new to this company here is an example of company policy. When they bought the Long Mine from WMC they decided that a stable and safe workforce was a priority. From the outset all employees would be salaried. The management had seen too many occasions where piece workers had taken short cuts for short term gains. Instead, incentives by way of options would be offered even for those in the field. After several years, the company have had only 3 minor lost time incidents, many of the original workforce are millionaires and they have a retention rate of 96.4%. I spoke with the chairman after the meeting and he added that the board and management like to be seen frequently at the mine site. In fact the board meets every second time at the Long Mine and while there they make a point of including senior workers in their discussions. I did not enquire this time but last year I heard that the head office staff numbers, just six people. This is very much an inclusive operation at all levels. In the past I have heard stories about the miners searching the internet for more effective machinery. This time we heard of the exploration team being encouraged to develop and pursue prospects that they think are encouraging. (they have some kind of option scheme that equates with the miners). That said, the chairman reiterated that the board need to be thoroughly convinced to begin drilling exploratory holes.
I am also impressed with the boards decisions on balancing exploration expenditure while rewarding shareholders. I note that the share price has virtually doubled since last year and we also received an impressive dividend.

I can not really give you any more detail on future prospects than you can gather from the annual report. The Long Mine has reserves out to 2011 but probably many more years beyond that. Of the exploration prospects (I am leaving Tropicana until last) nothing will be coming on stream for a number of years. I would have expected a statement on priorities but it is a case of the same old problems of a lack of drilling rigs. I asked about the company considering purchasing their own rig given the suite of sites they have on offer. They have looked at that and decided it would be mean creating an extra division that would distract the company from our its core developments. There are some very promising prospects but each needs a great deal of work before the company is prepared to elevate it to project status.

Tropicana. You have heard so much about this project that I have little to add that is new. As you know a resource statement is to be issued next month. It will be based on the proposed two open pit mines. IGO is endeavouring to get the major partner to include some statements as to the probable underground mining add-ons to the project. We found out from questioning as to the importance of Tropicana to Anglo. We were reassured that their board has dedicated 40% of their international exploratory budget to this resource. It is by far their largest new project.
I asked the question I have seen mentioned on Share forums a number of times as to whether the board has a strategy to counter the possibility of a takeover? Chris Bonwick answered as follows. The company has a comparatively tight shareholder base. Since the float they have not had a need for a capital raising issue. Added to that, 30% of the original shareholders still remain as loyal investors. (I will repeat, 30%.) Represents a reasonable blocking device I had thought. After the meeting the chairman came to me and thanked me for raising the issue. I think the company felt uncomfortable bringing takeover issues to the meeting from their side of the table. He admitted that he felt it VERY likely that such an approach will be made by Anglo but with such strong shareholder support any sale would be one that is favourable to IGO investors.

Another investor asked about IGOs commitment to the cost of the Tropicana development.(should there be no takeover we were assuming) CB said that he did not think they would be asked for major contributions within the next twelve months' The answer we got was perhaps around $9m . Beyond that the board expected that their share of the capital expenses would be around $150m. They have that sum sitting in the bank now.

And that ?s about it. We were continually reassured by the company that they have a major emphasis on costs. IGO is in the bottom third percentile of world nickel producers costs (IGO has the lowest costs of Australian mid tier producers). Profits of 90c per share is very high compared to competitors. This years production is ahead of budget. And the good news does not just end there. The companys R & D expenditure with Curtin University has resulted in a TEM machine more powerful than anything else in the world. This cutting edge technology is allowing the company to identify anomalies up to 200metres from drill holes. Having studied some of the resultant charts from this high tech metal detector I am impressed they can make anything of them at all let alone have enough confidence to commit to an expensive programme of drilling. Reinforces why I am investing in their expertise rather than the reverse. (whoops! How stupid is that last suggestion?)
Regards James.