Western Areas has boosted its monetary place within the 2019 monetary yr off the again of a better nickel value and elevated gross sales from the Forrestania operations.
The corporate’s flagship asset delivered one other dependable yr of manufacturing consistent with steering, resulting in elevated nickel gross sales of 21,483 tonnes within the 2019 monetary yr.
This, coinciding with a latest surge within the nickel value led to a very robust second half, resulted in elevated income of $268.7 million and a 20 per cent uplift in internet revenue after tax to $14.2 million for the complete yr.
Outfitted with $144.three million money available on the yr finish, Western Areas revealed it was effectively positioned to proceed investing in development and funding the Odysseus mine growth.
Having accomplished the undertaking’s definitive feasibility examine throughout the yr and confirming a ‘choice to mine’, Western Areas has ramped up growth on the website.
This consists of the mill restoration enhancement undertaking, which regardless of decrease than anticipated manufacturing charges, has allowed for the manufacturing and sale of a brand new premium high-grade nickel sulphide precipitate product.
Western Areas reported the brand new product was in demand with clients as a consequence of its suitability for direct feed into nickel refineries, bypassing the standard smelter course of and subsequently attracting increased payability charges.
The corporate has, nonetheless, remained modest in regards to the nickel market regardless of the latest improve in value and the influence of this on earnings and cashflow.
In its report, Western Areas acknowledged that it “recognises that the nickel market stays unpredictable, at time being influenced by each political and macro-economic components.”
Regardless of this, Western Areas stays assured that the basic outlook in each the medium and long-term is optimistic, as a consequence of chrome steel demand persevering with to develop and the brand new electrical automobile battery market shifting in direction of utilizing increased nickel content material batteries.
The corporate additionally highlighted the reported discount in London Metallic Trade warehouse nickel shares, which it acknowledged confirmed the nickel provide deficit was actual and sustained.
Western Areas managing director Dan Lougher mentioned the corporate was inspired by the advance within the nickel value and its optimistic influence on the monetary outcomes and earnings.
“Robust cashflow from our working property allows each continued funding in natural development initiatives, similar to Odysseus, and the upkeep of affordable returns to shareholders,” Lougher mentioned.
“We proceed to deal with working our Forrestania property as safely and effectively as potential, whereas additionally getting into the thrilling growth section of the Odysseus mine at Cosmos.”