Western Areas a nickel sector sentiment guide

WESTERN Areas will continue to be a key barometer measuring confidence in Australia’s junior nickel space over the next 12 months as it proceeds somewhat cautiously to reopen the Cosmos mining camp as its second production hub and expand production by 60% or more by 2023. Right now its market value reflects the wary optimism among company leaders and investors alike apparent at last week’s Australian Nickel Conference.

Western Areas a nickel sector sentiment guide Western Areas a nickel sector sentiment guide Western Areas a nickel sector sentiment guide Western Areas a nickel sector sentiment guide Western Areas a nickel sector sentiment guide

Western Areas targeting nickel production this year of 20,500-22,000t at Forrestania in Western Australia

Underpinned by continuing strong output and margins at its mainstay Forrestania operations in Western Australia, and the A$150 million or so of cash it has in the bank, debt-free Western Areas' growth strategy is built on the remnant resources and evident exploration upside at the former Glencore-owned Cosmos assets it bought three years ago, and of course further consolidation of higher nickel prices.

The company has guided for FY2019 output of 20,500-22,000 tonnes at unit cash costs of A$2.80-3.20/lb at Forrestania (21,060t at $2.63/lb in FY2018), with rising costs offset by a better forecast nickel price.

Its continuing strong operating performance and the improved market outlook for nickel - and particularly low-cost sulphide nickel miners, a shrinking class of pr...