IGO has improved its 2021 cost guidance for the Nova nickel-copper-cobalt operation in Western Australia despite recording slightly lower production.
The company produced 6816 tonnes of nickel and 3035 tonnes of copper at Nova in the March quarter, compared with 7024 tonnes and 3171 tonnes in the December quarter, respectively.
The company expects production to improve ahead of the 2021 financial year’s final quarter.
IGO stated the lower production was expected, and the company was expecting to achieve the upper end of its production guidance for the 2021 financial year (21,750 tonnes of nickel and 9375 tonnes of copper).
IGO managing director and chief executive officer Peter Bradford said the cash costs at Nova were only $1.83 per payable pound of nickel produced for the March quarter.
Bradford said this was due to strong by-product pricing.
“We are proud to deliver another strong set of operating and financial results for the March quarter, a period in which our operations continued to generate strong cash flows and we progressed the evolution of our portfolio to align with our strategic focus on clean energy metals,” Bradford said.
“Operationally, the Nova team continued to drive strong outcomes, with metal production for the quarter in line with guidance while cash costs continued to benefit from strong by-product pricing.
“Quarterly cash costs of $1.83 per payable pound of nickel position Nova to be below the bottom end of cost guidance for the full year.”
IGO also secured funding for its $US1.4 billion ($1.85 billion) lithium transaction with Tianqi Lithium, thanks to the sale of its share in the Tropicana gold mine in Western Australia.
The company’s 30 per cent interest in Tropicana is set to be sold to Regis Resources for $903 million.
IGO’s agreement with Tianqi, which was announced in December last year, gives IGO a 49 per cent interest in Tianqi’s Australian lithium assets.
This includes a 25 per cent interest in the Greenbushes lithium mining and processing operation, and a 49 per cent interest in the Kwinana lithium hydroxide plant, both located in Western Australia.
“…We have progressed the transaction with Tianqi Lithium Australia announced in December 2020,” Bradford said.
“The outstanding conditions precedent to settlement are expected to be completed in the coming weeks, and we remain confident that the transaction will close during the June 2021 quarter.”