Nickel producers Western Areas and Panoramic Resources are looking to increase annual production amid a rebound in the price of the industrial metal.
Western Areas reported March quarter nickel concentrate production of 6,344 tonnes.
The company maintained its full year production guidance of 27,000 tonnes of nickel in ore and 25,000t of nickel concentrate, which was revised up in February.
However, the company said today that there was further potential for “outperformance on production and cost metrics”.
The nickel price has increased as much as 24 per cent since January 1 to its year-to-date high of US$8.35 per pound on April 25.
Supply side fundamentals have driven the rally in the nickel price including Indonesia’s ban on nickel laterite ore exports and concerns over Russian nickel exports due to the Ukrainian political crisis.
Western Areas said the majority of the nickel price rise was in March and cash flow benefits would be seen in the June quarter, provided the price remained buoyant.
Western Areas, which operates the Spotted Quoll and Flying Fox mines, raised $106 million during the March quarter with the proceeds earmarked for paying down debt and bolstering its balance sheet.
The company has two tranches of convertible bonds, with a combined valued of $220 million and a 6.4 per cent coupon rate, that mature over the next 16 months.
Meanwhile, Panoramic Resources reported record quarterly nickel concentrate production of 5,731 tonnes for the three months to end March, a 6 per cent increase from the December quarter.
Panoramic increased annual production guidance to between 21,500 and 22,000 tonnes of contained nickel, which would be a record for the company if achieved.
The company has hedged about 20 per cent, or 1,150t, of nickel production for the remainder of the financial year.
As well as its nickel assets, the Savannah and Lanfranchi mines, the company is also developing gold and platinum group metals assets.
