IGO has enjoyed a jump in its net profit after tax (NPAT) in the December quarter as its Nova operations in Western Australia surpassed expectations.
Nova topped its quarterly guidance for nickel and cobalt production, while also proving its economic viability, beating out its cost guidance for the three months. This led to a group NPAT of $52.3 million, 36 per cent higher than the September quarter.
Nova produced 6889 tonnes of nickel in the December quarter, amounting to 13,876 tonnes of nickel for the six months to December 31. IGO’s half-year guidance for Nova nickel production was between 12,500 and 13,500 tonnes.
The operation produced 259 tonnes of cobalt in the December quarter on its way to trumping its half-year guidance for cobalt production by 12 tonnes (achieving 512 tonnes compared to the 450-500 tonne guidance).
Nova copper production dropped by 139 tonnes quarter-on-quarter, but the operation’s half-year copper figure (5906 tonnes) still reached guidance (5750 to 6250 tonnes).
The major miner achieved cash costs of $1.73 per payable pound (lb) of nickel at Nova for the quarter, leading to a second-half cost average of $1.86/lb – down from the $2-2.40/lb guidance set out for the six months.
IGO said this result “was due to higher by-product prices ($0.24/lb), higher nickel production ($0.03/lb) and lower unit production costs ($0.09/lb), partially offset by higher offsite costs ($0.06/lb)”.
IGO’s Greenbushes lithium joint venture mine in WA produced approximately 259,000 tonnes of spodumene concentrate for the December quarter, amounting to a half-year figure of circa 526,000 tonnes.
This comes as the lithium price continues to increase. IGO says it expects to sell chemical grade spodumene at an average of $US1770 ($2529) per tonne across the first half of 2022. In the second half of 2021, this price was $US592 per tonne.
IGO acquired Western Areas in December as the company continues to transform its capacity in the critical minerals space.
Through a scheme implementation deed (SID) of $3.36 per Western Areas share, the transaction valued Western Areas at $1.096 billion.
As part of the transaction, IGO will control the Forrestania mine in WA, one of the country’s highest-grade nickel mines.
Subject to necessary approvals, IGO hope to complete the transaction in April 2022.