IGO puts faith in Nova
Independence Group boss Peter Bradford has promised a big turnaround in the diversified miner’s fortunes this financial year after it swung from a $59 million loss to a $17 million profit in 2016-17.
The ASX-listed miner is tipping a big improvement next financial year on a full-year contribution from the Nova nickel mine 160km east of Norseman, where it spent $166 million in 2016-17 to complete the underground development.
The official opening of the mine, which was the main prize secured in a $1.8 billion takeover of Sirius Resources two years ago, is imminent, with the project tipped to produce 26,000 tonnes of nickel and 10,000 tonnes of copper a year.
Last year underlying earnings rose 9 per cent to $150.5 million, with revenue up one per cent from $417.1 million to $421.9 million on higher realised metal prices for zinc, copper, nickel and gold.
Its 30 per cent stake in AngloGold Ashanti’s Tropicana gold mine contributed half of IGO’s revenue in the period.
It ended the year with $35.8 million in the bank, down 23 per cent on the $46.3 million on hand a year earlier, committing to a 1¢ per share fully franked dividend.
IGO will almost double its greenfields exploration budget to $31 million, largely focused on the substantial ground position it has built up on the Fraser Range around Nova.
Mr Bradford doused talk that the Jaguar base metals mine near Leonora, which has a shorter life than Tropicana and Nova, and where lower-thanexpected production offset higher zinc prices in 2016-17, would be sold.
“Our guys are convinced there are more remaining (resources) to discover,” he said.
“We constantly review our portfolio, all the assets, and we’ll continue to do that going forward. But at this stage there is no view on Jaguar.”
On the other hand, the outlook remains bleak for the Long nickel mine in Kambalda, despite it beating production and cost guidance and generating $32.1 million in earnings.
With ore reserves running low, a fourth-quarter 2018 date has been set for its closure, with production guidance of 54006000 tonnes this year.
Immediate closure costs will come in at about $5-6 million, while it will cost $1-2 million to keep on care and maintenance while IGO searches for “step change” exploration success.