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I have just had my enthusiasm for this company enhanced by attending another AGM. I’ve been covering these meetings for a number of years and…………..I think I need to lift my game and not mention the word INTEGRITY yet again. For those who are new this company I hope I do not sound yet another ramper. I go along with a series of questions that I hope will challenge Chris Bonwick or the other board members but I usually fail dismally. This is one company with no seat warmers on the board. Any director that you confront is armed with the answers to as much detail of information as you can throw at them……and what I like, anything they do not know they immediately confer with someone else to supply an update.
And I ask myself why the heck did I sell that section of shares when they hit a high a year or two ago? I have been trying to come back in through the back door by way of STB.

Before I forget, Chris Bonwick gave me an internet site I had not seen before. For those like me who have not seen the Anglo site have a look at …………..
http://www.tropicanajv.com.au/irm/content/home.html To be honest I have not explored the site myself but it does look interesting.

Okay so let me begin. There were between 60 and 70 at todays meeting.
(I am sorry about this report. I have found recently that if I make a dual post I find that HC does not accommodate quotation marks nor apostrophes. If you find some of this report somewhat weird it is me trying to work my way around such restrictions).
I always have difficulty reporting on the compulsory business end of an AGM. Salaries especially so. A brief statement from the chairman. Quote……You will have noticed that we have increased the pool of funds for directors salaries. The board has not had a raise since 2003. We may not increase our present salaries but it is apt that we give comparisons to similar sized companies. Western Areas pay $800,000…….(.I can not recall the other company mentioned but the director salaries were in the region of $600,000)…….IGO directors receive $300,000. They asked shareholders for an increase in the pool to accommodate either an increase in pay OR the necessary funds to accommodate an increase in director numbers should they feel it is in the interest of the company………………I hope I got that right.

The company policy is to continue to pay a dividend.

(I’ve just come back to this point as I have just noted an interesting fact re the recent capital raising. IGO now has 67 institutions that have invested in the company. Overseas institutions only got 30% of what they wanted and he expects that once the shares come on line the number of institutions will increase to 75 or even up to 80. Now back to what I was writing.)

Another aspect of policy that I had not heard……….this from Chris Bonwick…..quote…..We want to create a mid sized company of the type vacated by Western Mining. We think we have the strategies and the targets to achieve this.

After that I should mention the various projects. What can I add to the Long Mine story that has not been thoroughly covered? I guess I have been with the company long enough to just EXPECT these increases in the resource. We were given a detailed outline as to how difficult and how chancy it was to find Moran. As an aside, for those who have not heard this story, I have been told previously that the board alternates their meetings between Perth and the mine site. While at Kambalda the board invites leading members of the mining teams to the discussions to find how THEY interpret the mine face. The miners not only give their imput but I have known of reports where by they have searched the internet for equipment that THEY feel will be of benefit to the operations. The board has sanctioned such acquisitions after a case has been put to all the directors by the miners involved. This is not a THEM and US company. All the miners are salaried with share incentives.
Further to the report of a paste plant (for those like me who have trouble with jargon this really means concrete). They will be pumping the paste down through pipes to the areas mined. I admit that I assumed problems getting concrete trucks down the incline. Okay, yep, I admit to stupidity.

Needless to say the ore bodies identified in IGO reports are OPEN in both major directions. We were told they will be mining Long for a number of years to come.

Tropicana. It is obligatory of me to ask the question at each AGM….quote….Why have Anglo not made a take over bid? Quote…….They have asked us twice but we have laughed them off. If they came at $13 a share we might be interested.
I asked what involvement IGO has in this partnership. Quote……We attend all meetings and have a full involvement. They value our exploration expertise and our suggestions. We have a VERY good relationship and each values the others input. They do follow up on all our suggestions.

I had been asked to find out NPV and IRR for this Tropicana project. Look elsewhere for the reasons for non disclosure but an arm twisted up his back brought a Chris Bonwick statement that ….quote…..Off the top of my head the IRR is probably between 24 and 26 per cent.
The key factor is Boston Shaker. If they can develop this as another open cast mine the return on capital will be reduced markedly. With a similar gold price or as expected an even better gold price this whole project could be paid for in less than two years OR in the most favourable situation, in twelve months.

Quote……….This is a remarkable new gold province. I will not be surprised if they are not making new major discoveries in the next 50 or even 100 years. Anything is possible.

Investors new to this company please take such statements reasonably seriously. These people at Independence do not make outrageous comments without basis. This company can not be accused of ramping. If I seem to come from the effusive brigade it is only because I have reason to believe. If in doubt look back at the history of this company and look at how they have always understated their forecasts. The most telling compliment is to look at the graph showing their costs at the Long mine. I think it is remarkable given the increase in mining costs within the mining industry over the last decade.

I really can not add much to the already publicised resource statements for Tropicana. What I can say is that you do not get what is INFERRED. To continue with Chris Bonwicks enthusiasm… quote……Look at the map of the Goldfields. The distance of strike is similar to the Kalgoorlie to Leincester road trip.
I have done that and………it is quite some distance. And to think that IGO found this under lines of large sand hills. It is truly remarkable.
I mentioned in an earlier post that Independence Group exploration department has been recognised as ONE the best in the world. (some of you will note that I have just put in that capitalised word. I just reread my notes. I still think it is a significant statement from our leader)

One last thing before leaving the Tropicana story. It is a question of costs. You may have had raised eyebrows after seeing BFS costs of around $700. In my naivety I have believed other mining company statements on this subject. In recent years I have discovered that the word COSTS has many meanings. Today we were told in no uncertain terms that this means EVERYTHING ..PLUS. If Boston Shaker proves to be another mining site these costs will come down markedly. Even without that resource these figures are so conservative that the IGO board can see how they could prune significant percentages from that figure.

Other Exploration Sites
A few weeks ago I read someones post wondering what would be the next target for IGO. I can’t really tell you but it seems it will either be Duketon or Karlawinda. The former has been a story of frustration both with obtaining a mining licence and getting approvals from the local shire. Now that most of those difficulties are overcome they will begin drilling Duketon in earnest. It is VERY early days but this could well be a new nickel find of significance. STB are making the statement of it being the largest new nickel find in Australia. I didn’t get quite that reassurance today but ….quote……It could well be. We simply don’t know. The channel is 200 metres wide while Long is only 90 metres wide. We need to do a lot of drilling.
They have the okay from the local shire to establish a work camp on site.

Karlawinda is proving to be a low grade shallow deposit. They are in the process of drilling the hell out of it and it could be…….(I am sure I heard this)…..quote… It is possible we can get this up and running before Tropicana.

Sweden is their first attack at the outside world. I am sure you heard about the government of that country mounting a competition for amateur explorers to find the best mineral deposit of the year. Dogs are trained to sniff ore bodies. To cut the story short a Govt. flyover followup located a 1km long anomaly. IGO is pursuing it.

Holleton looks very promising but is not yet an ore body. Lots of work necessary.

DeBeers.
For years I have been listening to the company trumpet the importance of this resource. I admit that the story usually comes at the end of the meeting and by that time my eyes have usually glazed over. This year I’ve been drinking a smoothie each morning and the difference is palpable. I understood the message today……I think.
De Beers spent 30 years drilling the hell out of Australia in the hope of finding diamonds. Okay, I knew this. What did not jell was the fact that they saved all those drill cores. IGO owns not only a warehouse filled with these cores of Australias crust but the detail of the drill sites.
This much lauded exploration team are now matching aerial exploration anomalies with these De Beer drilling sites. They are then going to the core samples and getting them reanalysed. De Beers it seems were somewhat blinkered in that they ignored any other minerals. This warehouse has become what Chris describes as an Aladdins Chest.
Already it has proved to be invaluable with a new tin and gold project in the Northern Territory……………..


Whoops. I am sorry for rabbiting on incessantly. That is the trouble attending these AGMs.
I hope I have portrayed some of the excitement that confronts our future as share holders in this company. I attend between 6 and 10 AGMs each year. IGO is always a stand out especially among the smaller companies. I haven’t read through this missive but I hope I used the word INTEGRITY somewhere along the line…….I usually do and feel confident in saying so.
Regards, James
Ps. Some will remember I got distracted a few weeks ago by a farmer in Dalwalinu stating on ABC talkback that he had an IGO gold operation on his property. Quote…..It will never make me rich but my retirement fund is looking very rosy.
Yes this was a find by IGO of …….perhaps three years ago? I was told that yes, IGO does get a return but it is only a 20,000 ounce resource. Phew!