IGO reports strong results, but costs set to rise

Independence Group has reported a 44 per cent leap in full-year net profit on the back of strong production from its Nova nickel mine and Tropicana gold joint venture project.

IGO’s profit rose to $76 million, and its revenue increased by 2 per cent to a record $793 million.

Its full-year dividend also reached a record, at 10 cents per share, after it declared a final dividend of 8 cents per share.

IGO’s nickel production at Nova for the 2019 fiscal year was 30,708 tonnes, outperforming its previous guidance of between 27,000t and 30,000t.

However, last month IGO said production at Nova was expected to remain flat this fiscal year, but costs were set to rise.

Its 30 per cent-owned Tropicana produced 518,172 ounces, in line with its guidance of guidance of between 500,000oz and 550,000oz.

Its all-in sustaining costs were at $951/oz.

Last year, the AngloGold Ashanti-operated mine produced 467,100oz, and this fiscal year Tropicana is expected to produce between 450,000oz and 500,000oz of gold.

AISC are expected to increase to be between $1,090/oz and $1,210/oz.

The company increased its cash on hand by 151 per cent to $348.2 million over the period and trimmed debt by 40 per cent to $85.7 million.

Managing director Peter Bradford said the company was well positioned to take advantage of robust nickel and gold prices.

“(High prices) together with our consistent, reliable production of low cost, high grade products, puts Independence in a solid position for the year ahead,” he said.

IGO is spending $66 million on exploration, predominately around its Nova operation.

Shares in IGO were up 1.53 per cent to trade at $5.31 each at 3.30pm AEST.