IGO Limited Reports Robust FY26 Close with Enhanced Safety Metrics and Nova Nickel Asset Divestment

Nova Nickel Operation Reaches Production Targets Ahead of Divestment

In FY26’s final quarter, IGO’s Nova nickel operation surpassed life-of-mine production expectations and maintained costs below guidance set a year prior. This achievement is notable as Nova approaches closure anticipated in the December quarter. The operation sustained excellent safety standards during this phase, reflecting strong operational discipline by the Nova team amid ramp-down activities.

Post-quarter, IGO announced the sale of Nova to Global Lithium Resources Limited, effective after mining ceases. Management views this as advantageous for shareholders and the local community supporting Nova over its decade-long operation. Nova’s Q4 EBITDA was $30.6 million, down from $60.5 million in Q3, consistent with the natural production decline approaching closure. For FY26, Nova contributed $158.4 million EBITDA, underscoring its significant earnings role despite imminent mine closure.

Greenbushes Spodumene Production Rises with Stronger Lithium Prices

Greenbushes, operated via IGO’s 49% stake in the Tianqi Lithium Energy Australia (TLEA) joint venture, improved operational output in Q4 FY26. Spodumene production increased to 387 kilotonnes from 351 kilotonnes in Q3, with the third Concentrator Plant (CGP3) contributing 71 kilotonnes. The realised spodumene price surged to US$2,286 per tonne from US$1,668 previously, reflecting a favorable lithium market. This volume and price uplift led to an 80% EBITDA margin for the quarter, up from the FY26 average of 73%.

A June fire at CGP3 caused a seven-week production halt; however, no injuries occurred and Talison’s rapid response mitigated impacts. Production from CGP3 was expected to resume shortly after the report. This incident highlights operational risks in lithium processing, though safety systems proved effective. Recovery at CGP3 will be critical to sustaining higher production levels into the first half of FY27.

Kwinana Lithium Hydroxide Facility Production Reduced by Planned Maintenance

IGO’s 49% stake in the Kwinana lithium hydroxide plant, held via TLEA, saw production drop to 897 tonnes in Q4 FY26 from 3,047 tonnes in Q3 due to a major scheduled shutdown. Kwinana processes Greenbushes spodumene concentrate into lithium hydroxide for batteries and industrial uses.

Such planned maintenance is standard for large-scale processing facilities to ensure safe, efficient operations. The shutdown’s impact on quarterly output underscores how maintenance timing influences production results. Management’s guidance typically incorporates these schedules to contextualize quarterly performance within the facility’s overall operating profile.

Strengthened Group Cash Flow Backed by Windfield Dividend

IGO’s financial position improved significantly in Q4 FY26, with net cash rising by $59.5 million quarter-on-quarter to $386.5 million as of 30 June 2026, supporting a strong balance sheet entering the new fiscal year. Operating cash flow reached $69.2 million, doubling from $34.6 million in Q3, while underlying free cash flow increased 94% sequentially to $69.5 million.

A key contributor was a A$390.0 million dividend paid by Windfield, the joint venture managing Greenbushes operations and cash flows. The dividend resumption signals Greenbushes’ robust cash generation and management’s confidence in sustaining distributions alongside capital reserves for ongoing investment. This reinforces Greenbushes’ status as a premier lithium asset.

Group Sales Revenue Growth Driven by Copper Volumes and Pricing

Group sales revenue rose 18% in Q4 to $141.4 million from $119.7 million in Q3, primarily due to increased copper sales volumes and improved prices, reflecting IGO’s diversified commodity exposure. Full-year FY26 sales revenue totaled $448.9 million, highlighting the group’s strong revenue base. The revenue gains supported the notable free cash flow growth in the quarter.

Revenue increases stemmed from both operational volume growth and favorable commodity pricing, particularly copper, influenced by global economic trends and industrial demand. While detailed copper production and pricing data were not disclosed, improved copper market conditions positively impacted IGO’s valuation during the period.

Significant Safety Performance Improvements with Extended Injury-Free Period

IGO achieved a major safety milestone in FY26, reducing its Total Recordable Injury Frequency Rate (TRIFR) to 3.7 on a rolling 12-month basis as of 30 June 2026, down from 10.2 in June 2025—a 63% year-on-year decrease. The quarterly TRIFR improved 24% from 4.9 to 3.7. Notably, zero recordable injuries occurred over five months through June 2026, extending the injury-free streak beyond 200 days.

Leading safety indicators also advanced, with nearly 11 months without serious potential incidents since September 2025. Management credits these gains to maturity in critical risk management frameworks and strong frontline leadership in safety protocols. The "Taking Control of My Safety" initiative was further embedded during the quarter, including adoption by contracting partners. However, TRIFR at joint ventures Greenbushes and Kwinana remains higher than the group average, highlighting ongoing safety focus areas for IGO’s 49% ownership in TLEA.

Strategic Portfolio Realignment with Nova Divestment and Lithium Focus

The Nova nickel operation sale to Global Lithium Resources Limited represents a pivotal strategic shift, concentrating IGO’s portfolio on core lithium assets and investments. Nova, part of IGO’s portfolio for ten years, generated $158.4 million EBITDA in FY26 but is approaching closure in December 2026, prompting the divestment decision.

The sale, effective post-mining, offers investors clarity on asset transition timing. Choosing Global Lithium Resources Limited as the buyer indicates perceived value in Nova’s remaining mining tenure and infrastructure. This transaction provides shareholders exit value as Nova’s production life shortens, with completion expected in H2 FY27 following final mining activities.

TLEA Joint Venture Capital Expenditure and Kwinana Impairment Accounting

TLEA, a joint venture between IGO (49%) and Tianqi Lithium Corporation (51%), incurred $12.9 million in capital expenditure during Q4, reflecting IGO’s share. This capital was expensed by IGO following the full impairment of the Kwinana asset as of 30 June 2025. Expensing capital aligns with accounting standards when an asset is fully impaired, indicating its book value has been written down to zero based on recoverable value assessments.

The Kwinana impairment affects IGO’s financial reporting and balance sheet interpretation. Although Kwinana continues operating and generating cash flows benefiting IGO, it no longer contributes to reported asset values. This impacts investor evaluation of return on assets and balance-sheet metrics. Management’s continuation of Kwinana operations suggests confidence in positive cash flow generation despite prior investment write-downs.

Capital Structure and Non-IFRS Financial Metrics Overview

IGO reported underlying EBITDA of $117.8 million for Q4 FY26, closely aligned with reported EBITDA of $117.6 million, indicating minimal adjustments. For FY26, underlying EBITDA was $285.9 million versus reported EBITDA of $322.9 million. The difference reflects a $31.9 million gain on sale of Forrestania assets recognized in the prior quarter, excluded from underlying EBITDA per company policy.

Use of underlying EBITDA and free cash flow as non-IFRS measures aligns with industry practice, focusing on operating performance excluding one-off items and impairments. IGO transparently discloses these adjustments, enabling investor reconciliation. FY26 underlying free cash flow totaled $134.0 million, indicating cash generation capacity for dividends, debt reduction, or reinvestment after capital expenditures.