Commodities, Finance, Lithium, News, Nickel

Nova shines but Forrestania falls short for IGO

IGO Forrestania

IGO enjoyed record sales revenue from its Nova operation in Western Australia during the June quarter, as the company posted its first results from the newly acquired Forrestania project.

The major miner generated $277.9 million of revenue across the three months, which was 13 per cent higher than the previous quarter ($245.5 million).

Nova nickel production of 6509 tonnes (t) was 3 per cent higher quarter-on-quarter (QoQ), enabling IGO to produce 26,675t of nickel for the 2021–22 financial year (FY22), towards the upper end of its FY22 guidance (25,000–27,000t).

Nova produced 2814t of copper in the June quarter, which was slightly higher than the quarter before (2762t) and achieved the lower end of guidance. FY22 copper production from Nova was 11,483t (guidance: 11,500–12,500).

While Nova’s cash costs increased from $1.86 to $2.24 per pound (lb) QoQ, the operation’s FY22 figure of $1.95/lb was better than FY22 guidance ($2–2.40/lb).

IGO’s 49 per cent stake in the Greenbushes lithium project in WA delivered a net profit of $101.8 million during the June quarter, which was 68 per cent higher QoQ. This result was due to 41 per cent higher spodumene concentrate sales and marginally higher spodumene prices across the three months.

While IGO’s established projects performed strongly, the newly acquired Forrestania mine in WA was hit by COVID-related absenteeism, with nickel production 14 per cent lower QoQ.

The major miner said COVID-19 had affected underground equipment, operator availability and mine rescheduling, leading to lower volumes of underground ore.

Nickel sales revenue to Western Areas, which IGO acquired shortly before the quarter ended on June 20, was $71 million, 35 per cent lower QoQ. This came as Forrestania nickel sales decreased from 2722t to 1899t QoQ and the average nickel price fell 7 per cent to $US38,041/t across the three months.

Despite these decreases, IGO managing director and chief executive officer Peter Bradford was pleased with the company’s results.

“We have delivered a strong finish to FY22 with safe and consistent operational performance across the business, combined with stronger metal prices, resulting in another highly profitable quarter,” he said.

“Nova and Greenbushes delivered production and cash costs within or better than guidance, first battery-grade lithium hydroxide was produced at Kwinana, we received a first dividend distribution from the lithium joint venture and we progressed many organic growth opportunities across the business.

“In parallel, we have completed the transaction to acquire Western Areas and have made substantial progress with the integration of Western Areas into IGO.”

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