'Active' quarter for IGO

IGO had a busy March quarter as it moved to complete its entry into the lithium market and exit from the gold market.
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IGO's Nova nickel-copper mine in WA's Fraser Range

The company still expects its US$1.4 billion deal with Tianqi Lithium to complete in the current quarter, as well as the recently announced A$903 million sale of its 30% stake in the Tropicana gold mine to Regis Resources.

For the March quarter, revenue from the Nova nickel-copper mine and Tropicana stake was $186 million, as well as underlying EBITDA of $93 million and an EBITDA margin of 50%.

Net profit after tax jumped 378% to $41.9 million, including $23.5 million of foreign exchange gains relating to the Tianqi deal.

Cashflow from operations was $71 million, while underlying cashflow was $51 million.

Nova, which outperformed in the March quarter, generated underlying EBITDA of $93 million and underlying free cashflow of $69 million.

Nova produced 6816 tonnes of nickel and 3035t of copper.

Cash costs were just $1.83 per pound of nickel, down from $2.10/lb in the previous quarter.

Year-to-date production is sitting at 21,115t of nickel and 9484t of copper, against year-to-date guidance of 20,250-21,750t of nickel and 8250-9375t of copper.

Year-to-date cash costs of $2.07/lb are well below the original guidance of $2.40-2.80/lb.

IGO now expects full-year costs to be in the range of $1.80-2.10/lb.

CEO Peter Bradford said Nova was tracking to meet the upper end or beat full-year guidance.

Tropicana produced 83,393 ounces of gold (on a 100% basis) at all-in sustaining costs of $2120 an ounce, which Bradford said was within plan.

Costs were high due to lower gold sales and a higher quarter-on-quarter draw from lower grade stockpiles.

Year-to-date production of 301,503oz is within guidance of 285,000-322,500oz, and costs of $1698/oz are below year-to-date guidance of $1730-1860/oz.

Bradford said March was a quieter quarter for exploration due to Australia's hot summer.

A number of Nova near-mine targets were tested, but did not return mineralisation.

Bradford said the company had not given up hope.

"These are high-grade orebodies - they're just really small and hard to find," he said.

The March quarter saw IGO added to the S&P/ASX 100 index and S&P Sustainability Yearbook.

"Both of these reflect the maturity and increasing global relevance of the business," Bradford said.

Shares in IGO rose 1.9% to $7.41, just shy of early January's high of $7.52.