Tag: IGO

Credit Suisse upgrades FY20 and FY21 estimates for earnings per share by 20% and 10%, respectively, on the implementation of higher nickel pricing.

News reports suggest Indonesia is moving ahead with new regulations and bringing forward an export ban for nickel with grade less than 1.7%.

The pre-feasibility study on the nickel sulphate option has been extended to the December quarter in order to “optimise the study”. Credit Suisse suspects the company is likely buying time for nickel sulphide concentrate offtake agreements to be negotiated and replace expiring contracts.

Independence Group and AngloGold Ashanti will proceed with the development of the Boston Shaker underground project at Tropicana, despite the feasibility study falling short of forecasts.

The company has disclosed a -10% decline in grade and -21% metal loss at Nova. Adjusting for the revised reserve, Credit Suisse reduces the target to $3.95 from $4.20.

Independence Group’s Nova mine missed June quarter production guidance due to a processing issue that will be sorted during a scheduled maintenance outage. Nova missed in March, too, but the broker always saw guidance as optimistic and has a forecast at the lower end of the range.

Morgan Stanley upgrades FY18 earnings estimates, driven by better-than-expected first half financials and upgrades to nickel price forecasts.

A strong Dec Q production performance from Tropicana was offset by weakness at Nova, Jaguar and Long, the broker notes. Earnings were lower than expected in the quarter and net debt higher.

Citi analysts have implemented a double step upgrade, to Buy from Sell, on a combination of supportive in-house view on base metals in 2018 and the company update which has Nova ramping up to full production and a mill expansion adding further value.

Independence’ result had been pre-released so no surprises. Better than expected operating cash flow was offset by higher development costs at Nova, the broker notes.

The broker has come away from a Nova site tour confident the ramp-up is progressing well and operations appear to be recovering from a slow start and a slew of production downgrades. The broker nevertheless still feels the ramp-up schedule seems aggressive and there is a risk to FY18 production guidance being met.

The company expects to declare commercial production at Nova from the end of this month. Nameplate capacity is expected to be reached in the first quarter of FY18.

The company will sell the Stockman copper/zinc project in Victoria for $32m and a royalty to a subsidiary of Washington H Soul Pattinson ((SOL)).

Citi has upgraded to Buy from Neutral following share price weakness. Independence Group’s March quarter update proved weaker than expected, but Citi analysts draw confidence from the fact Nova is back on track.

All three of Independence’ operating assets posted positive cash flow in the March Q, Citi notes, despite weak metal prices and a stronger A$. The Nova project is 81% complete and the company has sold its stake in Gold Road ((GOR)).

Following shareholder approval, Independence Group will now complete the acquisition of Sirius Resources ((SIR)) and Deutsche Bank integrates the acquisition into estimates for the first time.

Independence’ March Q production numbers had already been pre-released but the full report shows "impressive" all-in costs, the broker suggests, thanks to Tropicana. The Long mine also beat on costs but Jaguar proved a disappointment.

The company did release some better than anticipated numbers regarding production performance in Q2, but outside Tropicana the assets tend to be of limited lifespan and Morgan Stanley analysts thus find the present premium valuation unwarranted.

Independence as completed its optimisation study for its Stockman copper-zinc project and forecasts an internal rate of return of 18%, with first production possible by Q4 2017.

Production was ahead of guidance in FY14 and the pre-released financials show weaker profits because of write downs. Earnings were in line with the broker’s estimates.

Independence Group’s March-quarter Long Mine production results have outpaced UBS’s forecasts by a hefty 12%. Cash costs were up 4% but, as this was in line with the broker, it proved to be Independence’s day.

A site visit to Tropicana has confirmed to Macquarie the quality of the project. The broker thinks the potential for the project to surprise on the upside is excellent. The broker increases production forecasts by 3%.

A falling nickel price has resulted in some share price weakness but RBS sees this as overdone given the company also offers exposure to gold and copper where prices are looking stronger.

Target $8.59 (was $8.55). The company delivered a solid production result in the December quarter and the broker has lifted its full year estimate accordingly, though with little earnings impact.