Nickel miner Western Areas has posted a 20 per cent rise in quarterly production, as the company looks to bolster its Western Australian operations with the development of its Odysseus project.
Western Areas produced 4,236 tonnes of nickel at its Forrestania operations, located north of Kalgoorlie, in the first three months of this year, up from 3,518t in the December quarter.
Managing director Dan Lougher said Forrestania, which includes the Flying Fox and Spotted Quoll mines, had returned to “a more normal level of operation”.
He attributed the growth in production to the re-establishment of higher-grade areas at Flying Fox and higher-grade reporting at Spotted Quoll.
“The company remains focussed on consolidating this positive momentum into the final quarter of FY21,” Mr Lougher said.
Western Areas had also posted an increase in cash plus nickel sales receivables from $111.4 million to $168.6 million.
Its average realised nickel price for the quarter was $10.07 per pound, down from $10.31/lb, with Western Areas attributing the decline to speculation over a potential increase in nickel supply from Indonesia.
Meanwhile, development of the company’s 8.1-million-tonne Odysseus project is progressing as planned, Mr Lougher said, with key concrete foundation works completed during the March quarter.
He said Western Areas was now ready to begin mechanical and electrical installation works.
Odysseus forms part of Western Areas’ Cosmos operations, near Leinster, which it acquired from Anglo-Swiss company Xstrata in 2015.
The mine is expected to bolster Western Areas' nickel production by 13,000t per annum until FY24, after which it is expected to produce 14,600tpa until FY31, according to a definitive feasibility study completed in October 2018.
During the quarter, Western Areas had raised $85 million from a share placement – and announced its intention to raise a further $15 million from share purchase plan – to fund a portion of Odysseus’ $299 million capital cost.
The proceeds are also going towards exploration programs and growth projects at Forrestania and Cosmos.
At 12:28pm AEST, Western Areas was trading 2 per cent higher to $2.28 per share.
