Nickel miner Western Areas has had a slight share price uplift on the release of its September quarter results and annual report.
Its shares closed today at $4.34, up 2.8 per cent.
Western Areas reported lower cash costs of production and net cash of $45 million versus $10 million last quarter.
Its September quarter cash costs for nickel in concentrate production, excluding royalties, smelting, and refining costs was $2.50 per pound, down 11 cents on the previous quarter.
Mine production was 133,543 tonnes of ore at an average grade of 5 per cent for 6,660 tonnes of nickel, which was 380t more than the previous quarter.
Mill production was 6,511t in concentrate, 175t of nickel ahead of last quarter.
While the price for nickel fell from $US8/lb later in the quarter to $US7/lb, Western Areas said this was partially offset by a weaker Australian dollar.
Its annual report revealed underlying net profit after tax for the year was $32.6 million compared with $5.6 million last year.
Western Areas said its quarterly result was boosted by higher than expected mined grades from its Flying Fox mine used in blending, increased lower cost material also used in blending from its Spotted Quoll mine and attention to cost management, including cost reductions provided by its long-time contractor Barminco.
Last month it finalised a $190 million contract extension with the underground mining contractor for two years with an option for one or two more years.
Analysts were largely positive about the September quarter results, describing them as ‘solid’.
Argonaut Securities said it was the 17th consecutive quarter Western Areas had achieved at or near nameplate production.
Western Areas said it was tracking well against guidance figures of $2.70-$2.80/lb unit cash costs of production and 25,000-27,000t of nickel in ore mined.