PERTH (miningweekly.com) – Nickel miner Western Areas has reported a turbulent six months for the period ending December, with volatile nickel prices impacting revenues and profits.
Revenue for the six months to December fell to A$123.6-million, compared with the A$132.4-million in the previous six months, while net profits after tax declined from A$8.3-million to A$150 000 in the same period.
Earnings before interest, tax, depreciation and amortization declined from A$47.5-million to A$30.5-million.
Sales volumes for the first half of 2019 was up to 10 404 t of nickel, compared with the 9 935 t sold in the second half of 2018, however, nickel prices over the period declined from $6.38/lb to $5.40/lb, with realised prices declining from A$8.29/t to A$7.45/lb.
Western Areas MD Dan Lougher said on Wednesday that the company had made excellent progress towards its growth objectives during the six months under review, significantly increasing ore reserves at Cosmos post the completion of the definitive feasibility study (DFS) at the Odysseus project, and announcing a decision to mine and moving into the mine development phase of the project.
“By maintaining focus on Western Areas’ core operating assets at Forrestania, another consistent production outcome has been achieved in line with plan. Maintaining stable and predictable operations remains a key performance indicator, which allows us to receive the full benefits of favourable nickel price movements as the occur.”
Lougher said that the refurbishment of the mine decline at Odysseus has now started, with construction poised to start.
Odysseus will cost some A$299-million to develop and would produce an average 13 000 t/y of nickel-in-concentrate over an initial mine life of ten years. The DFS estimated a net present value before tax of A$418-million and an internal rate of return of 28%.
The company will spend some A$24-million to A$28-million in 2019 on early works for the Odysseus project.
Meanwhile, Western Areas’ targeted production for the full 2019 has remained unchanged at between 20 500 t and 22 000 t of nickel-in-concentrate.