Independence Group NL (IGO) –Lightning Nickel Providing the Driving Force towards IGO becoming a Mid-Tier Mining House

• IGO’s Long mine of Lightning Nickel appears to be settling down as a 9,000tpa Ni operation (5,760t Ni attributable at 64%) at the lowest cash cost per lb in Australia of payable metal at A$3.05/lb in MQ05. IGO’s aim is to find another stand-alone Ni orebody that can be accessed from Victor South or Long South, so that production could be increased to 12,000tpa to 15,000tpa Ni (attrib : 9,600tpa).
• The MQ05 production results from Gibb South have been spectacular, averaging 8.3%Ni milled for the current ‘04/05 year, with the March quarter itself averaging 10.3%Ni (according to ERA’s records, this is the highest achieved from any orebody by any mine in WA). Ni metal reconciliations at Gibb South are a very impressive 3.6 times compared to reserve. Now Victor South in the same channel is increasing production, with the potential for higher grades and greater reserves.
• IGO is making progress with its intention to have its own producing gold mine possibly at Frances Furness and/or at Dalwallinu. Frances Furness appears to have the potential to become a small ~15g/t underground operation, while Dalwallinu could become a newly discovered goldfield.
• There appears to be a market rating disparity between Independence (IGO) and Jubilee (JBM) in that IGO has higher reserves (+50%), twice the reserve life, ~10% lower cash costs in MQ05, and half the attributable production, yet JBM’s market cap even after adjusting for net cash is more than 4 times IGO’s.
• As part of its aim to become a mid-tier mining house, IGO is evaluating its acquisition of almost 20% of Matrix (MRX) for possible copper production and is making progress in its other areas of exploration in gold and nickel.