PERTH (miningweekly.com) – Metals miner IGO has reported a strong financial quarter and first half of 2022, with the company continuing to advance its acquisition of fellow listed Western Areas.
Nickel production from the Nova operation reached 6 987 t during the second quarter ended December, up slightly from the 6 889 t delivered in the first quarter, while copper production declined from 3 023 t to 2 884 t in the same period.
Spodumene production from the Greenbushes operation, also in Western Australia, increased from 268 000 t to 259 000 t.
IGO reported sales revenue of A$188-million for the quarter from the Nova operation, which was in line with the A$189.2-million generated in the first quarter, with the company reporting an underlying earnings before interest, tax, depreciation and amortisation (Ebitda) of A$122.9-million.
For the half-year, revenue increased by 21% on the previous corresponding period, to A$378.4-million, with net profit up 67% on the previous period, to A$90.7-million.
“It is fantastic to report another safe and strong quarter, and half-yearly result, which highlights our consistent delivery and focus on growing our clean energy metals business. Importantly, we have done this safely, and we continue to prioritise the safety and wellbeing of all our stakeholders as we transition into the next phase of Covid in Western Australia,” said IGO MD and CEO Peter Bradford.
“Nova continues to perform well, with production and cash costs ahead of guidance for the quarter and half-year. Nova has also benefited from strengthening commodity prices, with nickel, copper and cobalt all rising strongly over recent months.
“Likewise, we have seen significant strengthening of benchmark pricing for spodumene and lithium chemicals, which will inform higher contract pricing in the March and June 2022 quarters.
“Within the lithium joint venture, Greenbushes has delivered robust operating performance and good progress on the expansion projects. The tailings retreatment plant is well advanced and expected to be commissioned in the March 2022 quarter, and chemical grade plant 3 front end engineering design progressed in accordance with schedule.
“At Kwinana, the team continued to transition the lithium hydroxide refinery from batch to continuous operations and remains on track to deliver first battery grade lithium hydroxide by March 2022,” said Bradford.
During the quarter under review, IGO entered into a scheme implementation deed with nickel miner Western Areas, under which IGO will acquire 100% of the share capital of Western Areas by way of a scheme of arrangement, subject to shareholder approval and in the absence of a superior proposal.
Under the terms of the scheme, Western Areas shareholders will receive A$3.36 per Western Areas share in cash, which represents a 35.5% premium to the company’s undisturbed share price of A$2.48 per Western Areas share on 18 August 2021.
“We are excited about the recently announced acquisition of Western Areas. This acquisition is on strategy, delivering IGO with an expanded nickel portfolio in Western Australia, and access to additional people with significant operational, technical and commercial skills and experience in nickel,” Bradford said on Monday.