In­de­pen­dence Group

After cel­e­brat­ing one year since its Nova mine en­tered com­mer­cial pro­duc­tion in Septem­ber, In­de­pen­dence Group has its sights firmly set on key met­als used in re­new­able en­ergy tech­nolo­gies and elec­tric ve­hi­cles, with fur­ther ex­pan­sion and ex­plo­ration proje

The Australian Mining Review - - NEWS - AMY BLOM

IN­DE­PEN­DENCE Group (IGO) would con­tinue to pri­ori­tise ex­plo­ration work at its Nova op­er­a­tion and the sur­round­ing Fraser Range, fol­low­ing a strong start to FY19.

Ac­cord­ing to its Septem­ber quar­terly re­port re­leased on 29 Oc­to­ber, IGO in­creased net cash to $62 mil­lion and achieved metal pro­duc­tion guid­ance at Nova, about 160km north­east of Norse­man, and at Trop­i­cana gold mine, 330km north­east of Kal­go­or­lie.

The WA-based miner had a 100 per cent in­ter­est in Nova, which be­gan pro­duc­tion in June 2017, and a 30 per cent in­ter­est in Trop­i­cana, with An­gloGold Ashanti hold­ing the re­main­ing 70 per cent.

Mr Brad­ford said first quar­ter re­sults for the 2019 fi­nan­cial year demon­strated the qual­ity of the two as­sets, which un­der­pinned the fund­ing of its ex­plo­ration pro­gram to drive fu­ture growth.

“Our on­go­ing $51 mil­lion com­mit­ment to dis­cov­ery in FY19 is tar­get­ing met­als im­por­tant for re­new­able en­ergy and elec­tric ve­hi­cles,” Mr Brad­ford said.

“This work pri­ori­tises ex­plo­ration at Nova and the Fraser Range with the ob­jec­tive of find­ing ad­di­tional nickel-cop­per-cobalt dis­cov­er­ies like Nova.

“Our ex­plo­ration team has suc­cess­fully stepped up our ac­tiv­ity level in line with in­creased com­mit­ment to ex­plo­ration in FY19 and the ex­cite­ment of the team, fanned by the prospect of dis­cov­ery, is in­fec­tious.”

The Nova min­ing lease has been the sub­ject of the largest 3D seis­mic pro­gram ever un­der­taken in Aus­tralia, with Mr Brad­ford de­scrib­ing the Fraser Range as “ex­tremely fer­tile.”

Ac­cord­ing to IGO, a pre­lim­i­nary re­view of data ear­lier this year iden­ti­fied nu­mer­ous tar­gets that war­ranted fur­ther in­ves­ti­ga­tion and drilling at Nova.

More tar­gets were ex­pected to be iden­ti­fied as the data in­te­gra­tion and in­ter­ro­ga­tion con­tin­ued, while two tar­gets were ad­vanced to drill sta­tus, with the first of these to be drilled in Q2 FY19.

Fur­ther green­fields ex­plo­ration was car­ried out across the Fraser Range, in­clud­ing Wi­d­ow­maker and An­dromeda dur­ing the quar­ter, with as­say re­sults pend­ing.

The Spec­tremAir air­borne EM sur­vey at Lake Mackay in the NT con­tin­ued dur­ing the quar­ter, in­clud­ing the ‘ high pri­or­ity’ Blaze prospect area,

The air­borne sur­vey was ex­pected to be com­pleted in Q2 FY19, in­clud­ing an area funded by the NT Gov­ern­ment un­der the geo­physics and drilling col­lab­o­ra­tion pro­gram.

On 25 Oc­to­ber, IGO and Prodigy Gold an­nounced a farm-in and ex­plo­ration joint ven­ture for the Lake Mackay project, trig­gered by IGO com­plet­ing its ini­tial $6 mil­lion earn-in ex­pen­di­ture, with IGO hold­ing a 70 per cent in­ter­est.

Prodigy Gold manag­ing direc­tor Matt Briggs said the es­tab­lish­ment of the JV of­fered both com­pa­nies the op­por­tu­nity to build on an al­ready strong re­la­tion­ship fo­cussed on de­liv­er­ing a sig­nif­i­cant new min­eral dis­cov­ery.

“This fo­cus is fur­ther un­der­lined by an in­au­gu­ral JV bud­get of $4.6 mil­lion for the re­main­der of FY19, which pro­vides for our largest-ever com­mit­ment to RC drilling on the project,” Mr Briggs said.

“Ex­plo­ration dur­ing the quar­ter con­tin­ues to pro­vide en­cour­age­ment.

“Eight new geo­chem­i­cal anom­alies were iden­ti­fied plus 39 air­borne EM anom­alies for on-ground EM fol­low up.

“The EM re­sults build on the sur­face work al­ready un­der­taken al­low­ing the ex­plo­ration team to pri­ori­tise tar­gets for fol­low-up in­ves­ti­ga­tion which can only in­crease our chances of mak­ing a ma­jor dis­cov­ery.”

Lake Mackay was con­sid­ered prospec­tive for gold and base met­als, as well as nickel sul­phide min­er­al­i­sa­tion.

Adding Value

In ad­di­tion to its ex­plo­ration pro­grams, IGO was work­ing to fur­ther evolve the down­stream pro­cess­ing po­ten­tial from its broader Nova as­sets to pro­duce nickel and cobalt sul­phates for elec­tric ve­hi­cle (EV) bat­ter­ies.

Speak­ing at 2018 Aus­tralian Nickel Con­fer­ence in Perth on 23 Oc­to­ber, Mr Brad­ford said the strat­egy could de­liver IGO the po­ten­tial for higher paya­bil­ity, premier prices and higher con­cen­tra­tion re­cov­er­ies.

“EV lithium ion bat­ter­ies cath­odes with higher nickel con­tent are the key to en­abling higher en­ergy den­sity, and that broad­ens our op­por­tu­nity for Nova to emerge as a sta­ble sup­plier of min­er­als crit­i­cal to clean en­ergy stor­age,” Mr Brad­ford said.

Ac­cord­ing to IGO’s Septem­ber quar­ter re­port, strong gold pro­duc­tion from Trop­i­cana was also ex­pected to con­tinue through up­grades to pro­cess­ing ca­pa­bil­i­ties, which Mr Brad­ford said were on track to be com­pleted by the end of 2018.

“The value en­hance­ment ac­tiv­i­ties at Nova and Trop­i­cana were pro­gressed broadly in line with plan,” Mr Brad­ford said.

“This in­cludes the Nova nickel sul­phate pre-fea­si­bil­ity study, as well as the in­stal­la­tion of the se­cond ball mill at Trop­i­cana and the pre-fea­si­bil­ity study for the Bos­ton Shaker un­der­ground at Trop­i­cana, both of which are on track for com­ple­tion this quar­ter.

“IGO is a busi­ness which can achieve trans­for­ma­tional or­ganic growth over the com­ing years through the po­ten­tial for both down­stream pro­cess­ing and dis­cov­ery.”

De­sign and civil works on the se­cond ball mill have been com­pleted and me­chan­i­cal in­stal­la­tion was pro­gress­ing.

Struc­tural me­chan­i­cal and pip­ing in­stal­la­tion was well un­der­way, with the ma­jor­ity of plant tie-ins com­pleted dur­ing the sched­uled Oc­to­ber shut­down.

The new ball mill would en­able pro­cess­ing through­put rate to be in­creased by about 5 per cent and gold re­cov­ery to be im­proved by up to 3 per cent to about 92 per cent.

Im­proved gold re­cov­ery would be achieved by the ad­di­tional milling ca­pac­ity al­low­ing a finer grind, which would re­sult in bet­ter lib­er­a­tion, and there­fore, a bet­ter gold ex­trac­tion rate.

At Nova, IGO com­pleted a num­ber of trade-off stud­ies dur­ing the quar­ter to de­ter­mine the fi­nal process flow­sheet to be car­ried for­ward into en­gi­neer­ing as part of the pre-fea­si­bil­ity study.

It also com­pleted a plant trial to pro­duce an op­ti­mal, high-grade nickel con­cen­trate feed for down­stream pro­cess­ing.

Ac­cord­ing to IGO, the trial was suc­cess­ful, al­low­ing the miner to col­lect three tonnes of higher-grade nickel con­cen­trate with re­duced sul­phur con­tent, specif­i­cally op­ti­mised for the down­stream pro­cess­ing project, which would be used for ad­di­tional pre-fea­si­bil­ity and fea­si­bil­ity met­al­lur­gi­cal test work.

The Septem­ber quar­ter also saw IGO ex­e­cut­ing key strate­gic con­tracts at Nova, in­clud­ing re­new­ing and ex­tend­ing Barminco’s un­der­ground min­ing con­tract for four years with a two year ex­ten­sion op­tion.

On 23 Oc­to­ber, IGO an­nounced it had fi­nalised an agree­ment with Zenith En­ergy to con­struct a so­lar pho­to­voltaic (PV) fa­cil­ity at Nova, which Zenith would build, own and op­er­ate.

First power sup­ply from the fa­cil­ity was ex­pected in the Q1 FY20.

It would be the first fully in­te­grated com­mer­cial hy­brid diesel/so­lar PV fa­cil­ity in Aus­tralia.

Mr Brad­ford said IGO be­lieved in the green en­ergy fu­ture and was com­mit­ted to re­new­able en­ergy sources as it strove to re­duce its car­bon foot­print.

“The de­vel­op­ment of this in­no­va­tive hy­brid so­lu­tion will also im­prove our cost struc­ture with tar­geted re­new­able power in­ser­tion of up to 50 per cent de­mand via the so­lar PV fa­cil­ity,” Mr Brad­ford said.

Fi­nan­cial Re­sults

Mr Brad­ford said while cash costs at Nova had been higher than guid­ance, this was im­pacted by lower metal pro­duced and lower by-prod­uct metal pric­ing.

“We ex­pect cash costs to trend lower in sub­se­quent quar­ters on the back of higher quar­terly metal pro­duc­tion,” Mr Brad­ford said.

Nova nickel pro­duc­tion for the quar­ter was 6854 tonnes, while its cop­per pro­duc­tion was 2019 tonnes.

Gold pro­duc­tion on a 100 per cent ba­sis at Trop­i­cana was 125,100oz, while gold sold at IGO’s 30 per cent share was 35,143oz.

De­spite higher nickel con­cen­trate sales from Nova and higher Trop­i­cana gold sales, to­tal rev­enue for Q1 FY19 was lower than the pre­vi­ous quar­ter at $167.4 mil­lion due to softer base metal prices and lower cop­per con­cen­trates sales.

Rev­enue was also im­pacted by the Long op­er­a­tion go­ing into care and main­te­nance in the pre­vi­ous quar­ter, and the sale of the Jaguar op­er­a­tion.

How­ever, net cash was higher than the prior quar­ter at $108.1 mil­lion, largely as a re­sult of strong cash gen­er­a­tion from Nova and Trop­i­cana.

In more good news for IGO, con­fi­dence in Aus­tralia’s nickel sec­tor was on the up, ac­cord­ing PCP Cap­i­tal Group prin­ci­pal Liam Twig­ger.

Speak­ing at the 2018 Aus­tralian Nickel Con­fer­ence, Mr Twig­ger said there had been a con­tin­u­a­tion of im­prove­ment in sen­ti­ment for the Aus­tralian nickel sec­tor over the last 12 months, and that value seemed to be build­ing.

“This is in ad­di­tion to fur­ther con­sol­i­da­tion op­por­tu­ni­ties in the Kam­balda re­gion and Fraser Range, and a con­tin­ued strong push into the bat­tery met­als space by the likes of Nickel West with its nickel sul­phide strat­egy, Western Ar­eas with its MREP, and In­de­pen­dence Group with nickel sul­phate hex­ahy­drate,” Mr Twig­ger said.

“The Aus­tralian nickel sec­tor re­mains in great shape, not only for to­day, but also for the fu­ture.”

“EV lithium ion bat­ter­ies cath­odes with higher nickel con­tent are the key to en­abling higher en­ergy den­sity, and that broad­ens our op­por­tu­nity for Nova to emerge as a sta­ble sup­plier of min­er­als crit­i­cal to clean en­ergy stor­age.”

Nova at night.

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