IGO LIMITED Nova achieved key milestones during the Quarter including construction completion, commissioning, first production, practical completion and first shipment of concentrates.
Tropicana gold production, cash costs and all-in sustaining costs for the Quarter and year to date were all better than guidance.
Tropicana annualised process plant throughput rate for the Quarter lifted to 7.6Mtpa, benefiting from the completion of the expansion project in October 2016.
Tropicana value enhancement initiatives, including Long Island studies, progressed and unlocked a 58% increase in Ore Reserves and over a 75% increase in the Life of Mine Net Present Value. Further value is expected to be unlocked in the next stage of work due for completion mid CY17.
Long delivered a consistent Quarter with production and cash costs better than guidance. Year to date production and cash costs were both better than guidance.
Jaguar zinc and copper production was lower due to lower grades and lower underground production. Full year guidance remains unchanged.
FinancialUnaudited underlying EBITDA of A$43.7 million and unaudited NPAT of A$10.2 million.
Balance sheet remains strong with net debt of A$90 million and A$200 million of undrawn debt facilities.
Corporate and ExplorationFraser Range consolidation around Nova completed with the acquisition of Windward Resources Ltd and joint venture agreement with Sheffield Resources Ltd.
Peter Bradford, Managing Director and CEO of IGO said:
"The December quarter saw many significant milestones being achieved at Tropicana and Nova and good progress being achieved elsewhere. Once again, our team at Long delivered an excellent quarter.
"Tropicana continues to deliver excellent results, with gold production, cash costs and all-in sustaining costs all ahead of guidance, while the Long Island optimisation study continues to demonstrate significant upside to ore reserves and mine life.
"At Nova, the commissioning of the processing plant has proceeded extremely well but, as anticipated, is currently constrained by supply of ore. We expect that sufficient underground development will have been completed around mid CY17 in order to ramp up underground ore mining to a consistent 125,000 tonnes per month, at which point we will be able to consistently feed the processing plant.
"At Jaguar, and as indicated during the previous quarter's results presentation, production was weaker during the December quarter however, we expect this to improve during the second half and have left full year guidance unchanged."
FINANCIAL AND CORPORATEUnits | 2Q17 | 1Q17 | 2Q16 | |
Financials (unaudited) | ||||
Revenue and Other Income | A$M | 128.5 | 94.8 | 98.4 |
Underlying EBITDA | A$M | 43.7 | 38.1 | 29.9 |
Profit (Loss) After Tax | A$M | 10.2 | 10.1 | (28.1) |
Cash and refined bullion | A$M | 109.6 | 249.3 | 59.6 |
Debt | A$M | 200.0 | 271.0 | 200.1 |
Net Cash from Operating Activities | A$M | 17.6 | 8.1 | 17.0 |
Product revenue:
Tropicana gold sales for the Quarter increased 47%, primarily due to a stronger quarterly production result, combined with additional sales of gold doré that was unsold at the end of the September 2016 quarter.
Jaguar revenue was 49% higher during the Quarter resulting from higher zinc concentrate shipments during the Quarter. The result includes three 10kt zinc concentrate shipment sales resulting in 12,197 payable tonnes, which was 208% higher than the previous quarter. In addition, a 5kt copper shipment sailed in December 2016.
Long delivered another solid quarterly production result of 1,256 payable nickel tonnes.
During the Quarter, the Company repaid A$71 million of debt, reducing the Company's outstanding debt to A$200 million. In addition, the Company cancelled a further A$79 million of its Term Loan Facility. IGO's facilities now comprise A$200 million in drawn term debt and a A$200 million revolving credit facility (undrawn). The term debt is scheduled to be repayable semi-annually over seven equal instalments commencing in September 2017 and ending September 2020, though the Company retains flexibility to repay debt earlier.
Cash from operating activities for the Quarter increased by A$9.5 million to A$17.6 million2(refer commentary and waterfall chart below).
A strong Jaguar cash flow result included sales receipts from a 10kt copper shipment totalling A$20.7 million, which was shipped and recognised as revenue in the previous quarter. In addition, a 5kt copper shipment of December 2016, referred to above, was receipted during the Quarter. The three 10kt zinc shipments for the Quarter are inclusive of a
1 Based on London Metal Exchange average prices and RBA published foreign exchange rates for the September 2016 and December 2016 quarters.
2 Note: Quarter 1 Cash from Operating Activities includes a restatement of expenditure of A$1.3 million to Investing Activities.
shipment delayed from the September quarter, which contributes to the higher operating cash flows for the Quarter.
Tropicana gold sales were 12,415oz higher for the Quarter, in part due to the sale of gold doré previously built up at the end of the previous quarter (net draw on unrefined bullion stockpiles for the Quarter was 8,432oz).
Long's operating cash flows Quarter on quarter were consistent at A$7.8 million, however excluded A$2.6 million that related to the Quarter and were received in January 2017.
The Company paid two significant stamp duty amounts to the Western Australian State Government during the Quarter. These comprised A$52.5 million for the interim assessment of Sirius Resources Limited's Nova acquisition (in September 2015) and a A$5.7 million payment in relation to the completed duties assessment for the Company's acquisition of Jabiru Metals Limited (Jaguar Operation) in 2011. Grounds for objection to the Jabiru payment have been lodged with the relevant department.
A$M Cash flow from Operating Activities Variance
80
700.3 1.50.4
60
50
49.3
40
30
58.2
20
10
- (1.9)
21.3
0.2
9.5
(10)
Long Tropicana Jaguar Exploration
& New Business
Corporate Interest
Received
Stamp Duty payments
Other Variance
Profit after tax for the Quarter was negatively impacted by an after tax A$3.9 million expensing of the A$5.7 million Jabiru Metals Limited stamp duty payment referred to above.
FINANCIAL SUMMARY (unaudited) | 2Q17 (A$M) | 1Q17 (A$M) | 2Q16 (A$M) |
Tropicana | |||
Revenue | 63.4 | 43.2 | 63.2 |
Underlying EBITDA | 32.3 | 20.5 | 37.0 |
Cash Flow from Operating Activities | 35.9 | 12.9 | 30.8 |
Free Cash Flow | 26.1 | 4.8 | 26.2 |
Long | |||
Revenue | 18.4 | 20.1 | 14.7 |
Underlying EBITDA | 10.1 | 10.4 | 3.1 |
FINANCIAL SUMMARY (unaudited) | 2Q17 (A$M) | 1Q17 (A$M) | 2Q16 (A$M) |
Cash Flow from Operating Activities | 7.8 | 9.7 | 1.5 |
Free Cash Flow | 7.2 | 9.5 | 0.8 |
Jaguar | |||
Revenue | 45.7 | 30.8 | 19.5 |
Underlying EBITDA | 11.4 | 16.5 | (0.5) |
Cash Flow from Operating Activities | 43.6 | (6.2) | 2.5 |
Free Cash Flow | 38.4 | (10.8) | (1.1) |
Nova | |||
Revenue (capitalised to Project) | 3.4 | - | - |
Underlying EBITDA | - | - | - |
Cash Flow from Operating Activities | - | - | - |
Free Cash Flow | (47.2) | (45.1) | (58.4) |
New Business | |||
Underlying EBITDA | (5.7) | (4.9) | (6.1) |
Cash Flow from Operating Activities | (5.6) | (5.9) | (4.2) |
(5.9) | (6.3) | (8.8) | |
Corporate & Other | |||
Revenue | 0.6 | 0.9 | 1.0 |
Underlying EBITDA | (4.4) | (4.4) | (3.9) |
Cash Flow from Operating Activities | (6.8) | (5.1) | (5.5) |
(64.7) | (5.4) | (17.5) |
Cash Flow for the Quarter | 2Q17 (A$M) | 1Q17 (A$M) | 2Q16 (A$M) |
Cash at beginning of Quarter | 249.3 | 46.3 | 131.3 |
Tropicana Operations Free Cash Flow | 26.1 | 4.8 | 26.2 |
Jaguar Operations Free Cash Flow | 38.4 | (10.8) | (1.1) |
Long Operations Free Cash Flow | 7.2 | 9.5 | 0.8 |
Nova Project Development | (47.2) | (45.1) | (58.4) |
New Business and Exploration (greenfields & brownfields) | (5.9) | (6.3) | (8.8) |
Corporate and Other Free Cash Flow | (6.5) | (5.4) | (5.5) |
Acquisition and New Business Integration Costs | (58.2) | - | (12.0) |
Proceeds from Sale of Investments | - | 1.5 | - |
Payments for Investment in Windward Resources Ltd (net of A$4.5 million cash acquired) | (16.6) | - | - |
Payments for Other Investments/Mineral Interests | (4.2) | (1.5) | - |
Net Finance/Borrowing Costs | (2.0) | (6.0) | (0.6) |
3 New Business Free Cash Flow for the December 2015 quarter excludes acquisition costs relating to Sirius Resources Ltd
4 Corporate & Other Free Cash Flow for December 2016 quarter includes stamp duty payments totalling A$58.2 million made during the Quarter. The December 2015 quarter includes Acquisition and New Business Integration costs of A$12.0 million.
Independence Group NL published this content on 25 January 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 24 January 2017 22:36:07 UTC.
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