PERTH (miningweekly.com) – Critical minerals producer IGO has marked another record quarter of results in the three months to June, with nickel production up 14% quarter-on-quarter and spodumene production up 11% in the same period.

“We are pleased to have recorded another strong set of underlying financial results for the quarter, with quarterly record earnings before interest, tax, depreciation and amortisation (Ebitda) of A$636-million and record underlying free cash flow of A$381-million,” said acting CEO Matt Dusci.

Underlying Ebitda for the quarter was up 19% on the previous quarter, and reached over $2-billion in the full year ended June, while free cash flow increases by 34% on the previous quarter and reached $1.09-billion in the full year.

Sales revenue for the quarter also increased by 2%, to A$240.6-million, bringing full-year revenues to over A$1-billion.

IGO on Monday reported that spodumene production in the fourth quarter ended June had reached 395 000 t, up from the 356 000 t produced in the third quarter, bringing full-year production to 1.49-million tonnes, which was above the guided 1.35-million to 1.45-million tonnes.

Lithium hydroxide production for the quarter reached 142 000 t, down from the 963 000 t produced in the third quarter, bringing full-year production to 1.88-million tonnes.

“Greenbushes continues to perform above expectations, with a record quarterly production result driving full-year production to 1.49-million tonnes on a 100% basis, which was above our guidance range. Despite a modest increase in the cost of goods sold, Ebitda margins at Greenbushes remain more than 90%, demonstrating the world-class nature of this asset,” said Dusci.

“At Kwinana, the ramp-up of Train 1 experienced ongoing technical challenges following the scheduled shutdown during the quarter, which resulted in a lower-than-expected quarter of production. Tianqi Lithium Australia is now working towards reaching approximately 50% production capacity rate by the end of 2023,” he added.

For 2024, IGO has set a spodumene production target of between 1.4-million and 1.5-million tonnes, with the company to spend between A$850-million and A$950-million on development and sustaining capital expenditure.

A further A$35-million to A$45-million will be spent on Train 1 at Kwinana during the 2024 financial year.

Meanwhile, nickel-in-concentrate production for the quarter ended June reached 9 549 t, up from the 8 358 t produced in the previous quarter, bringing full-year production to 34 846 t, which was in line with the guided 33 500 t to 37 500 t.

“Within the nickel business, Nova delivered a strong final quarter, with metal production improving compared to the prior quarter. Full-year nickel production ended the year just below the bottom end of guidance, while cash costs were within guidance range. Forrestania also finished the year well, with production and costs in line with guidance.

“As announced post-quarter end, IGO will record an impairment charge against the assets acquired from Western Areas in our full year audited results. The impairment charge, expected to be between A$880-million and A$980-million, is very disappointing and reflects changes to capital costs, operating costs and mine production schedule challenges at the Cosmos project and underperformance at Forrestania.

“We have recently commenced an independent review of the Cosmos project and expect to update the market on completion in December 2023. The project steering committee has implemented an additional approval process for all capital expenditure and commitments for the project while we progress works on the shaft, process facility, materials handling and advance underground development,” said Dusci.

IGO is targeting a nickel production of between 21 500 t and 23 500 t for the 2024 financial year, with copper production targeted at 8 500 t to 10 000 t, and cobalt production at 700 t to 800 t.

“Finally, during the quarter we announced the appointment of Ivan Vella as the company’s next MD and CEO. Vella will commence with IGO in early December 2023, and we are looking forward to working with him as we continue delivering our strategy to become a globally relevant producer of products critical to the clean energy transition,” said Dusci.