PERTH (miningweekly.com) – Critical minerals company IGO has posted record financial results for the quarter ended March, with net profits after tax increasing 22% quarter-on-quarter.

The ASX-listed company on Friday reported that spodumene production during the third quarter ended March had declined by 6% on the previous quarter, from 379 00 t to 356 000 t, on the back of lower throughput at the Greenbushes operation, in Western Australia.

However, the Greenbushes operation reported record sales revenue of A$2.8-billion during the quarter under review, a 23% increase over the second quarter, despite spodumene sales volumes declining by 13%, as the operation benefitted from higher quarter-on-quarter contract prices and a favourable sales mix in respect of higher grade spodumene with the prior quarter.

Lithium hydroxide production during the quarter was up 65%, from 585 t in the second quarter, to 963 t as production ramp-up of Train 1 at the Kwinana lithium hydroxide refinery continued in the third quarter, and plant performance improved steadily.

Total nickel-in-concentrate production for the quarter was also up by 16% on the previous quarter, to 8 358 t, while copper-in-concentrate production was up by 29% to 2 524 t.

Sales revenue in the quarter declined by 7%, to A$235.7-million on the back of lower sales volumes from Forrestania as a result of lower trucking availability, however, profits after tax increased by 22% to A$412.3-million.

“It has been another strong quarter demonstrating the financial strength of the company. Our results include earnings before interest, tax, depreciation and amortisation (Ebitda) of A$533-million and net profit after tax of A$412-million, both of which are quarterly records for IGO, as well as significant progress on various growth projects across the business,” said acting CEO Matt Dusci.

“Production from Greenbushes was marginally lower quarter on quarter, however strong lithium prices drove record revenue and Ebitda, with Ebitda margins exceeding 90%. Higher costs, as previously guided, reflect lower production and the impact of some inflationary pressures.

“The ramp-up at Kwinana is making steady progress, with production increasing quarter on quarter as the site team diligently works through rectification works necessary to achieve our ramp-up plan. The next milestone will be a shutdown planned for this coming quarter which will address rectifications relating to materials handling equipment which are required to achieve improved throughput,” said Dusci.

“Results from our nickel business were mixed. Nova has recovered well from the power station fire in December and remains on track to deliver within our restated guidance range, despite some ongoing operational difficulties related to power reliability. Meanwhile, Forrestania experienced ore availability and trucking issues, which affected both production and sales.

“From a growth perspective, the Cosmos development project is progressing toward first production, which we expect to achieve in the September quarter. Additionally, we recently announced the allocation of land by the Western Australian government at Kwinana for our proposed integrated battery material facility, marking an important milestone in IGO’s downstream nickel strategy.”

Key project schedule dates at Cosmos remain in line with guidance, with commercial production still scheduled to be near the end of the September 2023 quarter and completion of the shaft and shaft infrastructure at the end of the December 2023 quarter.

While Cosmos has also experienced significant cost pressures, the total project cost estimate is maintained in the range of A$795-million to A$825-million, resulting in a forecast project cost to complete as at April 1 of between A$253-million and A$283-million, on an incurred basis.

Meanwhile, IGO on Friday flagged a non-cash impairment on the assets acquired via the Western Areas transaction in its 2023 full-year accounts.

“While we are not yet in a position to advise the quantum or range of this impairment, we are working diligently to complete these estimates and will update the market during the June quarter,” Dusci said.