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IGO - IGO Limited

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It is an interesting play by IGO, there must be something in it for them as they have seemed to be pretty astute in the past, but WSA has struggled in recent times due to reduced recovery rates at Forrestania from memory.
It certainly consolidates a lot of the W.A nickel space, really only leaves BHP, IGO and MCR.
 
This has had a good 12 months. MC now $9b.

Lots of very nice earning projected. Transformational year.

I almost bought at the break through $10 but I've been limiting myself to juniors.




 
RESPONSE TO MEDIA SPECULATION

IGO Limited (ASX:IGO) (IGO or the Company) notes recent media speculation that the Company may be
considering an acquisition of the CSA Copper Mine (CSA) from Glencore.
IGO confirms that it is in exclusive discussions with Glencore in relation to a proposed sale of CSA. However,
at this stage, discussions between IGO and Glencore are incomplete and IGO is continuing to conduct due
diligence as part of the ongoing sales process. IGO has made no decision and nor has it entered into any
definitive acquisition agreement with respect to CSA.
IGO regularly evaluates acquisition opportunities against a range of factors and will only pursue an
acquisition if it makes strong strategic and financial sense for its shareholders.
IGO will keep the market informed in accordance with its continuous disclosure obligations, and otherwise
does not intend to comment on such matters.
IGO is not aware of any other matter requiring disclosure under the ASX listing rules and confirms it is in
compliance with ASX Listing Rule 3.1.

DYOR

i do not hold IGO ( but have in the past )
 
I'm feeling good about this. Just wasn't sure about it. SP likely to tank then.

 
Mr Market likes the new deal for WSA. MC over $10b now and with WSA it's going to be huge. If nickel keeps going this is going to be a very profitable company. But, will nickel keep going? It's hard not to see prevailing geopolitical issues and the race to EVs that it doesn't. Could be a number of years before supply and demand equal out somewhat. If nickel settles above $30Kt, producers are going to have to find things to do with their cash flow. Or, the bigger players with a healthy balance sheet might want to add on the ready made ATMs.




 
This should probably support the sp this am. Has gone through a significant correction the past 6 weeks in line with the market recently but a 30% fall is significant. Lithium dropped from 500K to 450K at the same time so that might have contributed. BHP saying that lithium was a short term thing and they weren't going anywhere near it might not have helped either. Probably ran ahead of itself too.



 
Chinese giant Tianqi Lithium Corp can thank Australian nickel and gold miner IGO for helping the Chinese company produce its first net profit in two years.

Tianqi is one of the world’s top lithium producers, but wouldn’t have been in such a position if it hadn’t been for the $US1.4 billion deal with IGO covering the Greenbushes mine and Kwinana refinery in late 2020. The deal saw IGO purchase a 49% stake in Tianqi Lithium Energy Australia for $A1.9 billion.

That left IGO with a 25% interest in the Greenbushes lithium mining and processing operation in Western Australia – the largest operating lithium mine in the world. IGO also got interest in Tianqi’s Kwinana lithium hydroxide plant, located south of Perth.

Tianqi said in a recent filing to the Shenzhen Stock Exchange its net income was 85.8 million yuan ($US13.3 million) for the first half of 2021, up from a loss of 696.6 million yuan a year earlier.

Reuters said the result implies a second-quarter profit of 333.7 million yuan, after a 247.9-million-yuan loss in January-March, marking the three months to Tianqi’s best quarterly result since the fourth quarter of 2018.

Tianqi posted seven straight quarterly losses from mid-2019 after a precipitous three-year plunge in lithium prices – mainly driven by oversupply – left the company short of funds and facing default on billions of dollars in loans.

But the December 2020 deal with IGO saved it from collapse, or as Reuters reported it, Tiangqi “secured a $1.4 billion lifeline investment in its Australian operations from IGO Ltd and has been boosted by a near tripling in lithium carbonate prices over the past 12 months as demand from the EV sector roars back.”

First-half revenues were 2.35 billion yuan, Tianqi said in the filing, up 25.13% from a year earlier....

Lithium Deals Show Aussie-China Ties Not Totally Cut - Sharecafe

Despite China having spent the past year or more monstering Australia and Australian companies, the ties between both countries continue, especially in the strategically important areas of lithium mining and processing.
www.sharecafe.com.au
 
I hold IGO and a great company.

But the local management style with an attitude from HR asking people to work 50 hrs/week with a typical pay of 40 hrs/week unlikely to attract better people .
So unless the work attitude improves, the profit is a short time gain.
 
Wonder what people think about a Put Credit spread on IGO for Nov or Dec.
I get PM if it doesn't drop, and may be interested in actually being assigned at $12.
..... Say $12/$10 Put spread. Delta for the Nov17 is 0.23, and 0.26 for Dec15.
Any thoughts ?

Gunnerguy
 
I've been waiting for another decent correction in this SP to add, but I find myself skimming some off the top instead... Could be on the radar for a RIO if they pursue their battery theme. BHP have stated they're not chasing lithium at the moment so time will tell if they've got that one correct, much like their exit from Colombian coal.

 
This has been a champion since July. MC now over $12.5b. Got no idea how to value it to know if it's getting expensive, or not. I suppose the main theme here is Li and Ni and if the perceived future demand is going to remain it might keep going up. If QoQ EBITA and net profit keep going up at 50-100% maybe it's got some room to grow. Waiting for another pull back to add some more but I might be missing the boat.




 
Page 3 of The west this morning has a story about part of the powerplant at IGOs nova mine burning down.

They are suggesting the mine will be offline for the rest of the year.

Share price monday should be interesting. Presumably they have very good business interruption insurance so this may work to their advantage over the long-run. (As it did for koolan island and mgx)

Hundreds of workers evacuated from WA mine site after fire

www.9news.com.au
 
Thanks mate.
It is a startling story but sad for mining business
 

Oh dear, that will cause a knee jerk for sure. Nova is contributing about 1/3 at the moment so that will be a hit depending on how long it's down for. If only they had windmill back up.
 
Might be a buying opportunity, sounds like a very hybrid system, so if the control room went up it could be a complex repair.
Maybe hire a few self contained skid mounts.

Solar expansion at WA mine to deliver 100% renewables in daylight hours

Remote power generation specialist Zenith Energy will build upon its renewable energy options at Western Australian miner IGO’s Nova nickel site to demonstrate it is possible to use 100% renewables to meet the demands of an operational mine site.
www.pv-magazine-australia.com

Independence to go solar at Nova

Zenith Energy will build a solar plant to add its existing diesel power station.
thewest.com.au
 
Last edited:

I'm not sure how far advanced they with that solar array. I assume it goes into the control room.

From 30 Aug sustainability report.

(edit: much more advanced than I thought)

 
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