Independence Group’s Nova Mine Misses Yearly Expectations

While a preliminary metal production report shows that Independence Group (ASX:IGO) boosted nickel production by 23 percent in the June quarter, that same report indicates that full-year production at its Nova nickel-copper–cobalt mine has missed the mark.

In a statement released on the ASX, Independence explained that Nova’s nickel production quarter-on-quarter was up, hitting 7,344 tonnes, but that full-year metal production was 3 percent lower than anticipated at 22,258 tonnes. This missed the company’s guidance range of 23,000 to 27,000 tonnes.

The company attributed the lacking results to a semi autogenous grinding (SAG) mill liner issue, which impacted processing plant availability and productivity in the second half of June. This issue resulted in an approximate 800-tonne shortfall in nickel production. However, Independence said the SAG mill liners are currently being replaced and won’t cause a continued problem.

Despite the shortcomings at Nova, production from the company’s Long nickel project and Tropicana joint-venture gold project were on target, all of which are located in Western Australia. Independence shares Tropicana with AngloGold Ashanti (ASX:AGG), which has a 70-percent stake in the JV.

Tropicana saw production rates of 114,252 ounces during the June quarter and 477,139 ounces for the full-year, which hit the company’s guidance range of 440,000 to 490,000 ounces. At Long, nickel production came in at 1,533 tonnes for the quarter and 5,855 tonnes for the year, making the company’s range of 5,400 to 6,000 tonnes.

“We achieved a big step up in metal production rate at Nova during the June 2018 quarter, driven by better than nameplate mining and processing rates and higher overall grade, which absorbed downtime and lower productivity in the second half of June due to the SAG mill liner issues,” Independence’s managing director and CEO Peter Bradford said in a statement.

“Both Nova and Tropicana are poised for a strong 2019 financial year, with continuing business excellence projects at both operations poised to deliver improved productivity and value.”

Independence’s Nova project is wholly-owned by the company and located in the Fraser Range of Western Australia. The site was discovered in July 2012 and commercial production began in July 2017, with the mining rate now reaching 1.5 million tonnes per year.

In spite of the production rate news, Independence’s stock price closed 2.85 percent higher to hit AU$5.05 at the end of trading on the ASX on Monday (July 9).

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.