Tumbling nickel prices impact IGO revenues
PERTH (miningweekly.com) – Falling nickel prices have seen the revenues of metals miner Independence Group decrease during the December quarter.
Nickel production at Nova was down slightly in the December quarter, at 7 513 t of contained nickel, compared with the 7 724 t produced in the September quarter, while both copper and cobalt in concentrate production also declined slightly to 289 t of contained copper and 279 t of contained cobalt, compared with the 3 289 t and 279 t respective production in the September quarter.
Independence on Thursday noted that the quarterly production at Nova was impacted by lower tonnes through the mill, due to the phasing of planned maintenance shutdowns, offset by slightly higher grades.
However, the miner has reported that revenue from the Nova operations fell to A$133-million in the December quarter, compared with the A$184.2-million in the previous quarter, driven by the lower nickel prices.
The nickel price for the quarter averaged A$20 404/t, compared with the A$25 205/t in the first quarter of 2020, equating to a A$25.9-million unfavourable nickel price variance. As a result of the lower nickel price, Nova’s second quarter results also included a A$7.3-million negative revaluation of the first quarter’s nickel receivables.
Meanwhile, the Tropicana gold joint venture (JV) delivered 133 932 oz of gold during the December quarter, up from the 123 320 oz delivered in the previous quarter, with Independence’s share amounting to 38 612 oz.
The gold JV generated A$77-million in revenue for Independence, with average gold prices reaching A$1 986/oz.
“Production at Nova and Tropicana beat guidance in the December quarter and the first half of 2020, reflecting the quality of both operations and the dedication and effort of the Nova and Tropicana teams,” said Independence CEO and MD Peter Bradford.
“Looking ahead, we expect Nova to end 2020 with production towards the top end of the guidance, while Tropicana production for 2020 is expected to be below the mid-point of the guidance as a result of lower grades scheduled in the second half.”
For the full 2020, Nova’s nickel production has been estimated at between 13 500 t and 15 000 t, and its copper production at between 5 500 t and 6 250 t, while the Tropicana asset is expected to deliver between 225 000 oz and 250 000 oz.
Meanwhile, Bradford told shareholders that the company was continuing to assess a number of potential merger and acquisition opportunities to deliver near-term production growth and a pipeline of development assets.
“We have demonstrated a disciplined approach to operational, financial and strategic matters and are resolute that any merger and acquisition undertaken by Independence must deliver a return to our shareholders.”
Bradford’s comments come just days after the company’s A$312-million takeover offer for nickel miner Panoramic Resources lapsed.
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