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Business|Financial|PROJECT
Business|Financial|PROJECT
business|financial|project

IGO warns of massive impairment on Western Areas assets

Image shows a truck at a Western Areas operation

Photo by Bloomberg

17th July 2023

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Battery metals miner IGO has flagged a non-cash, pre-tax impairment of between A$880-million and A$980-million for the 2023 financial year.

The impairment relates to the reassessment of the accounting value at Cosmos and Forrestania, which was acquired as part of the takeover of Western Areas last year, to reflect higher capital and operating costs, challenges to the mine production schedule and delays in development at Cosmos.

IGO has also withdrawn its October guidance for Cosmos.

The company said on Monday that the non-cash impairment would not impact the full-year earnings before interest, taxes, depreciation and amortisation, and would be recorded in the company’s audited financial results.

“Recording a significant impairment against the Western Areas assets is disappointing. While the project development team has made solid progress to advance Cosmos towards first production, capital and operating cost escalation and unforeseen operational challenges have impacted the value of the project,” said IGO acting CEO Matt Dusci.

“A detailed independent review of the project development strategy and mine plan has now commenced and will provide a comprehensive assessment of the risks and opportunities for Cosmos. We will keep the market updated as this review progresses.”

This review is underway and expected to be completed in the December quarter and will result in a revised plan which will detail how IGO will drive optimum value from Cosmos.

“As a long-life nickel asset, Cosmos remains important to our nickel business and provides potential downstream optionality via our aspirations to develop an Integrated Battery Materials Facility in Western Australia,” Dusci added.

Edited by Creamer Media Reporter

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