Mid-tier nickel miners Western Areas and Mincor Resources have released positive quarterly results on the back of lower costs and improved production, with Mincor also defying the industry trend by saying it would increase its exploration spending.
Western Areas said cash costs were at a three-year low of $2.23 per pound of nickel-in-concentrate, 14 per cent better than estimated, and has foreshadowed a likely reduction in its full-year cost guidance.
“Whilst the company will update full year guidance metrics with the release of the half-year financial results in February, Western Areas can confirm that it expects there will be a significant improvement in unit cash cost guidance for the year,” the company said in a statement.
Western Areas said free cashflow for the quarter was $17.3 million (pre-dividend), 25 per cent better than forecast.
It also held $178.7 million cash at bank, $8.8 million more than expected.
The company said its quarterly production was 7 per cent above its estimate, despite the tonnage mined being 9 per cent lower than forecast.
“This was offset by average mined grade at both Flying Fox and Spotted Quoll being above our estimate by 8 per cent,” Western Areas said.
Mincor also showed promising results for the December quarter, with quarterly production of 2,469 tonnes of nickel-in-ore generated at cash costs of $5.07 per pound.
The company said it would increase its exploration spending budget by 40 per cent to $14 million due to high levels of exploration success at its Kambalda nickel project south of Kalgoorlie.
“Mincor remains on track to meet or better its production and cost targets for the 2015 financial year,” the company said.
Mincor’s capital costs were nearly $2.2 million lower at $9.6 million for the quarter, while cash at bank was increased to $53.6 million, up from $49.9 million in the September quarter.
Shares in Western Areas closed 3.2 per cent higher at $3.54 per share, while Mincor’s share price climbed 1.58 per cent to 64 cents per share.
