PERTH (miningweekly.com) – Takeover target Western Areas has reported a slight drop in nickel production for the three months to March, on the back of a planned shutdown at its Cosmic Boy concentrator, and owing to Covid-19-related productivity issues.

The ASX-listed company produced 3 339 t of nickel in concentrate in the three months under review, down from the 4 025 t produced in the previous quarter. Some 3 412 t of nickel was sold during the March quarter, down from the 4 511 t sold in the previous quarter.

However, the realised nickel price in the March quarter increased to A$18.44/lb, up from the A$13.16/lb achieved in the previous quarter. Western Areas told shareholders that the company had achieved record monthly revenue of A$52-million in March, with operating cashflow for the quarter increasing by A$15.2-million to A$50.1-million, underpinned by the robust nickel price environment.

Meanwhile, development work at the Odysseus mine continued during the quarter, and first concentrate remained on track for the December quarter of this year.

“We are continuing to build on the positive momentum in the development of Odysseus, derisking the construction schedule further during the quarter, and we have received an excellent response from potential offtake partners for Odysseus’ initial production in an evolving and positive nickel price environment,” said Western Areas MD Dan Lougher.

“Further upside at our emerging operations is on the horizon, with the AM6 feasibility study reaching a very advanced stage during the quarter. The strengthening nickel market conditions enabled us to deliver enhanced operating cash flow from Forrestania, with a record revenue result achieved in March.”

Western Areas is currently subject to a takeover offer from fellow listed Independence Group, which is offering Western Areas shareholders A$3.87 a share for their interest in the company.

The directors of Western Areas unanimously recommend that shareholders vote in favour of the revised scheme at the scheme meeting, in the absence of a superior proposal, and a shareholder meeting has been called for June 1.