27/08/2020 - 11:00

IGO posts record $155m profit

27/08/2020 - 11:00

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IGO has reported a record profit for FY20 and is signaling first gold production at the Boston Shaker underground mine for the September quarter.

Peter Bradford attributed IGO's strong financial results to solid nickel and gold production in fiscal 2020. Photo: Attila Csaszar

IGO has posted a record profit for the full financial year and is signaling first gold production at the Boston Shaker underground mine (as part of its Tropicana operations) for the September quarter.

IGO’s net profit after tax surged 104 per cent in the 12 months to June 30 to record $155 million, while revenue also rose to $892 million, up 12 per cent on FY19.

Underlying earnings were up 35 per cent to $460 million.

Managing director Peter Bradford attributed the growth to solid production across its portfolio.

“Our performance was primarily driven by the continued strength of the Nova operation, which exceeded production guidance for FY20, while Tropicana also consistently generated strong free cash flow for the business,” Mr Bradford said.

The Nova mine in the Fraser Range produced 30,436 tonnes of nickel in FY20, beatings IGO’s forecast of between 27,000t and 30,000t, along with 13,772t of copper compared to its guidance of 11,000-12,500t.

Meanwhile, gold production at the Tropicana joint venture reached 463,118 ounces in FY20, meeting guidance of 450,000-500,000oz despite being 11 per cent lower on the prior year.

IGO, which has been developing the Boston Shaker underground mine at Tropicana since May last year, said it remained on track to begin commercial production in the forthcoming September quarter.

The company has a 30 per cent stake in Tropicana, while its JV partner AngloGold Ashanti has a 70 per cent, operated interest.

Mr Bradford said IGO would focus on growth opportunities, including a $65 million exploration commitment for FY21.

“Our established, belt-scale land positions have been strategically selected to maximise success and we have clear and defined work programs for the coming year,” he said.

“Our mergers and acquisitions strategy remains focused on growing the business by identifying and securing interests in high-quality, long-life mineral assets which meet our investment criteria.

“Both of these growth strategies prioritise commodities aligned to our strategy focused on the metals required to enable a green energy future.”

Mr Bradford previously said IGO, which withdrew from a $216 million takeover bid for Panoramic Resources earlier this year, would pursue further M&A deals. 

IGO ended FY20 with a net cash balance of $453 million. It has declared a final, unfranked dividend of 5 cents per share, bringing the total FY20 dividend payout to 11 cents ($65 million).

Shares in IGO were up 3 per cent at 12:51pm AEST to trade at $4.61 each.

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