Ann: March 2016 Quarter Results Presentation-IGO.AX, page-2

I think the shorts might win the day, lookout



Impact

• We expect the stock to react negatively to the March Q report.  Disappointing quarter for IGO with Tropicana production 7% below estimates and 12% lower at Long.  Jaguar performed 3% better on the zinc and 20% lower on the copper. FY16 Cost guidance for Tropicana has been increased.
• Anticipated Tropicana gold production to come off in the March Q as the operation ceases grade streaming (high grading), however, the magnitude was higher than expected (processed grade 2.17g/t vs our 2.4g/t Au). Tropicana is now returning to the pack and is moving toward a >$1,000/oz gold producer.
• IGO’s cash balance decreased by $21.9m to $37m for the quarter and it took on an additional $40m in debt for the Nova project.  IGO has published an underlying free cash flow number of -$61.8m.  Note that IGO has a further c$160-170m to spend at Nova.
• Given the disappointing quarterly result we are placing IGO Under Review.  We suggest that the recent run in the stock is hard to justify with our valuation at $2.20/sh (pre-March Q update).

good luck punters