14-Sep-2024: Update: I haven't looked at IGO in detail for a few years. I used to hold them, and made money on them in prior years but have been out for a couple - and their share price has been declining progressively since mid-July 2023 (last year) when they were almost $16/share to a recent low of $4.71 (intra-day on Wednesday - 11-Sep-2024 - i.e. Wednesday of this past week). They closed yesterday at $5.39, i.e. close to a 3-year low (they were last down at these levels in late 2020).

There have been some headwinds, including:

1. IGO's then CEO & MD, Peter Bradford, sold their 30% of Tropicana - a world-class gold mine in WA - for a very attractive price (to Regis Resources - RRL) and took IGO further into battery metals via lithium JVs with Chinese company Tianqi Lithium Corporation (Tianqi), and lithium has since collapsed, highlighting that Tianqi have the best end of that deal, at IGO's expense;
2. Peter Bradford unfortunately passed away in October 2022 and their new CEO/MD, Ivan Vella was eventually announced as Peter's replacement but didn't take over the top job until December 2023, so there was a leadership vacuum there for a while dispite there being people filling the CEO role on an interim basis between Bradford and Vella;
3. IGO's other main commodity, Nickel, also went off a cliff, in terms of price, and IGO's prior acquisition of Western Areas - which came with its Forrestania nickel concentrate producing operation plus their Cosmos nickel development project - turned out to be a very bad move - as with the benefit of hindsight, they overpaid and failed miserably in terms of DD because the book value of those assets were subsequently written down by hundreds of millions of dollars. In short, the WSA acquisition was a disaster for IGO. The MD/CEO of Western Areas up until the sale, Dan Lougher, turned up as the new boss at gold miner St Barbara shortly after the WSA sale to IGO, and Dan oversaw the divestment of all of SBM's Leonora assets to Genesis Minerals (GMD), and then retired once more, after a very short stint at SBM. In that case, GMD got the better end of that deal by a good margin, but SBM were in a very poor negotiating position because of their debt and the fact that they were about to breach banking/lending covenants (on June 30, 2023) if they didn't complete that divestment for cash and pay off that debt. But this point is about the nickel price collapsing right after IGO paid top dollar for Western Areas, another nickel miner;
4. Apart from the lithium price being so low, the lithium hydroxide plant in Kwinana (just south of Perth in WA) that IGO own a stake of alongside Tianqi is only running at a fraction of its nameplate capacity due to numerous issues; and
5. IGO's return on expenditure on exploration has been fairly dismal as well.

So, they held a strategy day on Thursday (12th Sept) and here's their presso from that: IGO Strategy Day Presentation.PDF

In short, they are still committed to battery metals, but want to get into copper now, even if it means buying a minority stake in an overseas copper project.

The market was somewhat impressed clearly, as IGO's SP rose +6.8% on the day, to $5.48, but then slipped back a little (-1.64%) to $5.39 on Friday. It probably pays to put that +6.8% rise on Thursday into the context that they'd just hit their lowest share price since late 2020 the previous day ($4.71 intraday on Wednesday 11th Sept), so the base they were coming off was mightly low.

The MoM poddy lads discussed this IGO strategy day presentation for around 17 minutes on Thursday: https://www.youtube.com/watch?v=2T1TA53yD-k&t=2024s

I'm not tempted - IGO is a $4 billion company that was a $12.4 billion company on 7-Oct-2022 when their share price was $16.38 and they had the same number of shares on issue (757,267,813 shares), so they are now a reasonably large ship that may be hard to turn around, especially as they're tethered to these JVs, including the major one with Tianqi, the Chinese lithium "major" who can't get their lithium hydroxide plant to run @ Kwinana. AND they want to do more deals like that, except in copper. Hopefully not with a Chinese company this time.

Not a company I'm following now, but I did have another look at them based on the MoM coverage of IGO's strategy day, and... yeah, nah, not for me now. Not this year anyway.

17-July-2023: Impairment-of-Western-Areas-Assets.PDF

I sold out of IGO today on the back of that announcement. I reinvested that money into MinRes (ASX: MIN), who are Iron Ore and Lithium instead of IGO's Nickel and Lithium.

This smacks of a reset to me. Peter Bradford, IGO's highly regarded CEO and MD passed away suddenly in October (2022) - see here: https://thewest.com.au/business/mining/igo-boss-peter-bradford-dies-suddenly-c-8561534 and here: https://www.swtimes.com.au/business/mining/ceo-of-miner-igo-peter-bradford-has-died-c-8567054 ...and IGO have had their chief operating officer (COO) Matt Dusci also performing the role of acting chief executive (CEO) while they searched for a more permanent replacement for Peter.

On 13th June, IGO announced that Ivan Vella - who has worked for RIO (Rio Tinto) in Mongolia (at Oyu Tolgoi) and within their Aluminium business globally - would be IGO's next CEO and MD: Ivan-Vella-appointed-as-CEO-and-Managing-Director.PDF

Today, Matt Dusci has announced that IGO intend to write down the carrying value of the Western Areas nickel assets by almost $1 billion (a non-cash pre-tax impairment expense of between A$880M and A$980M), which is a BIG write-down considering that IGO paid A$1,263 million ($1.26 billion) for all of WSA last year - see here: https://themarketherald.com.au/igo-asxigo-increases-takeover-offer-of-western-areas-asxwsa-2022-04-11/

They are writing down somewhere between 70% and 77.6% of the purchase price only a year after they acquired the business.

And the previous head (MD and CEO) of nickel miner Western Areas (WSA), Dan Lougher, turned up as the CEO and MD of gold miner St Barbara (SBM) after IGO acquired WSA, only to quickly sell off Gwalia and all of their WA assets to Genesis Minerals and then retire on June 30th. He was originally slated to retain a director position on the SBM Board, but it appears he has left completely and SBM are renewing their Board (details not yet announced other than the Chairwoman, Kerry Gleeson and the MD, Andrew Strelein, who was an internal promotion). I've now sold all of my SBM and IGO shares.

The following paragraph from today's "Impairment" announcement also has me concerned:

"IGO’s Board and Management team acknowledge the quantum of this impairment is significant and have engaged a group of leading independent consultants to assist with a comprehensive review of the Cosmos Project to better understand risks and opportunities to the current life of mine plan, capital cost estimates and schedule. This review is underway and expected to be completed in the December Quarter and will result in a revised plan which will detail how IGO will drive optimum value from Cosmos. The Company expects to be in a position to provide further detail of this review in the June Quarterly Results, scheduled to be released on 31 July 2023."

It seems like they are resetting valuations and expectations lower, i.e. clearing the decks for the incoming new CEO/MD (Ivan Vella) so he can earn his incentives in future years. And such "reset" periods can be rough for shareholders in my experience.

I had invested in IGO assuming that their nickel assets (Nova and the WSA assets they recently acquired) were solid, and my main interest was in their lithium assets, because they are vertically integrated and value adding. IGO own 49% of their JV with Tianqi Lithium Corporation (51%) whose WA lithium assets comprise of a 51% stake in the Greenbushes Lithium Mine (49% owned by Albermarle Corporation) and 100% ownership of the Kwinana Lithium Hydroxide Refinery.

IGO could still play out well for investors from here, but I'm sensing there could be more bad news coming in the near term, as in this calendar year. That update with the June Quarter results (due late July) will perhaps make things a little clearer.

For now, I'm out of IGO. I did not own them here on SM, just in my largest RL portfolio, and I've swapped that capital into MinRes (MIN) now. Mineral Resources has come back about 22% from just over $90/share to just over $70/share over the past 6 months, and while I usually wait for the trend to change, as MIN can trend the same way for quite a while and then change direction and trend in the opposite direction for quite a while too, I reckon Chris Ellison is management worth backing right now, with the FY23 full year results not too far away. As MIN's largest shareholder (with 22.3 million of their 194.5 million shares on issue, or around 11.5% of the company) Chris tends to make decisions from the POV of a business owner, not just a business manager. He is usually on the better side of the deals he makes, even when the other side is a massive global corporation like Albemarle. Chris Ellison usually gets the better of all of them in the end. In my SMSF I've helf MIN now for a few years, and done very well out of them, and they're now back in my other RL portfolio as well. I'll have to add them back in to my SM portfolio as well at some point, once I sell something to make way for them.

But happy to step out of IGO and watch from the sidelines for a little while.

From DLI presentation - Resources Rising Stars

DELTA LITHIUM LIMITED (ASX:DLI) - Ann: Investor Presentation - Resources Rising Stars, page-1 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Quality Lithium Grade upto: 1.77% Resource size: Unknown.

A look at lithium in Australia:

To add SYA average Lithium Grade: 1.20%, Size:100Mt ( at Quebec - across 2 mines )

29/5/23 - IGO Has 25% ( St George 75% holding )holding in Mt Alexander Lithium Grade peak value of 1.77% and 1.49% , Size: unknown.

LTR & Albermarle still deciding on - Kathleen Valley ( Orange )

Production up on Spodumene (5% up), Lithium Hydroxide (200% up).

Production on Nickel concentrate down 26% due to fire

Announced 14 cent dividend

Credit Suisse: 12% estimate price cut to $11.60

JP Morgan: 3% estimate cut down to target of $13.70

Looks like the uncertainty in this market has really baffled everyone. But I suppose they all provide some sort of uplift from current levels.

From Wall St Journal Commentary:

Investors paid too much attention to the immediate outlook for lithium pricing when IGO released its 4Q report on Wednesday, says Jefferies. "A significant focus on pricing metrics, while relevant in the short term, missed the point that the formula under which they are calculated is up for renegotiation in September 2022," analyst Mitch Ryan says in a note. "Given the broader market dynamics, and tenor of offtakes currently being signed, we would expect that the contract is moved closer to a rolling market price as part of the negotiations by year end." Jefferies retains a buy call and A$15.50/share price target on IGO, which settled at A$9.98 on Wednesday.

20-May-2022: Tianqi Lithium delivers first battery-grade product - Australian Mining

The Kwinana lithium plant in Western Australia. Image: Tianqi Lithium

Tianqi Lithium delivers first battery-grade product

[20-May-2022, AustralianMining.com.au]

The first batch of battery-grade lithium has been produced by Tianqi Lithium Energy Australia (TLEA) from its plant in Kwinana, Western Australia, the first time the material has been produced in Australia in commercial quantities.

TLEA said it was a significant milestone for Australian mining as the sector expands to meet rapidly growing demand for rechargeable batteries, primarily from the electric vehicle and energy storage system industries.

TLEA’s Kwinana plant has successfully met internal certification processes, with the onsite laboratory confirming that battery-grade specification has been met on 10 tonnes of lithium hydroxide, produced consistently over several days. Samples have been sent for independent verification.

The next step in the plant’s ramp-up process is customer qualification, which will be completed over the next four to eight months. During this time, the plant will continue to focus on stable, consistent, and reliable production of battery-grade lithium.

Chief operating officer Raj Surendran said the company was pround to demonstrate that Australia could value add to its minerals onshore, enhancing its reputation as a critical contributor to the production of batteries for electric vehicles and energy storage.

“This is an exciting time for our shareholders, suppliers and service providers who have contributed to the construction and ramp-up of the Kwinana plant, and our employees who have worked so hard to turn the dream of producing battery-grade lithium hydroxide in Australia into a reality,” he said.

TLEA is a joint venture between one of the world’s top producers of lithium chemicals for electric vehicle batteries, Tianqi Lithium Corporation (51 per cent), and Australian miner IGO Limited (49 per cent).

TLEA owns the first lithium hydroxide plant in Australia and the largest in the world to be built and operated outside of China.

“More than 900 jobs were created during the construction phase of the plant, which is now being operated by about 200 people, as well as providing business opportunities for our numerous suppliers, many of whom are locally based,” Surendran said.

Lithium hydroxide produced at the Kwinana plant will be containerised and exported from the Port of Fremantle to customers around the globe.

Surendran said the first train will now continue its ramp up towards its nameplate capacity of 24,000 tonnes of battery grade lithium hydroxide per annum.

Lithium hydroxide is a lithium-based compound derived from spodumene, a lithium-bearing pegmatite mineral. Spodumene is sourced directly from the Greenbushes mine 250km south-west of Kwinana (Albemarle 50 per cent, Tianqi Corporation 25 per cent, IGO Ltd 25 per cent).

--- --- ---

Disclosure: I have held IGO in the past. I am not currently holding IGO shares. So far today, IGO is up 61cps (+5.5%) to $11.70 on the back of this news and a sharp rise in the nickel price overnight of almost 9%. IGO's revenue is still mostly from nickel sales at this point (from production out of their Nova mine in WA), but they have recently moved into lithium as well.

31/8/21

IGO results

The IGO Ltd (ASX: IGO) share price will be one to watch today when it releases its full year results. According to a note out of Goldman Sachs, its analysts expect the battery materials miner to report revenue of $913 million and underlying EBITDA of $475 million. The latter will be a modest 3.2% increase year on year.

IGO Limited (IGO, formerly Independence Group NL) is a mineral exploration company focusing on nickel, copper and zinc mining in Australia. The Company's focus is on Nova nickel-copper-cobalt operation and its portfolio of exploration projects in Western Australia, Northern Territory, South Australia and Greenland.

Disc' no holding, watching

IGO ENTERS S&P/ASX 100 INDEX IGO Limited

(ASX: IGO) (IGO or the Company) is pleased to announce that S&P Dow Jones Indices has advised that IGO joined the S&P/ASX 100 Index, effective 3 February 2021 following an out of cycle index rebalance.

Managing Director and CEO, Peter Bradford, commented “Today’s exciting milestone makes IGO a more attractive investment proposition for global investors looking for exposure to a unique business aligned to the clean energy metals future along with a strong ESG focus.”

09-Dec-2020:  IGO invests in Global Lithium JV with Tianqi

plus:  IGO / Tianqi Lithium JV Presentation

[I hold IGO shares, but not for lithium exposure.  I will be reviewing my IT (Investment Thesis) in the light of this move.  I note that MIN (MinRes, Mineral Resources) have gone gangbusters since they offloaded the majority of their lithium assets and shut down Wodgina.  They seemed to get into lithium at just the right time, and they also moved on at just the right time.  I'm not sure if this acquisition is a net positive or negative for IGO yet.]

Further Reading:

https://www.igo.com.au/site/investor-center/our-value-proposition

https://www.igo.com.au/site/investor-center/presentations-and-speeches

https://www.igo.com.au/site/our-business/about-igo

24-Nov-2020:  IGO inclusion in the DJSI Australia

IGO INCLUSION IN THE DOW JONES SUSTAINABILITY INDEX AUSTRALIA

IGO Limited (ASX:IGO) is pleased to announce that it has been included as an index component of the 2020 Dow Jones Sustainability Index (DJSI) Australia. This inclusion ranks IGO amongst the top performing Australian mining companies for corporate sustainability and environmental, social and governance (ESG) reporting.

IGO is ranked in the 84th percentile of all Metals and Mining industry participants and is assessed as being among the top 30 per cent of sustainable businesses within the ASX200 listed companies. The Company achieved scores in the 90th percentile or higher in a range of categories, including environmental reporting, social reporting, mineral waste management, operational eco-efficiency and occupational health and safety.

IGO Managing Director & CEO Peter Bradford, said:

“IGO’s continued inclusion in the DJSI Australia reflects the Company’s continued commitment to sustainability in line with our purpose of Making a Difference and our strategic imperative to be Proactively Green. Our alignment to the clean energy future is complemented and driven by our Proactively Green sustainability framework, as we continue to integrate consideration of ESG and economic aspects across our business. We are committed to voluntary ESG and sustainability disclosure – disclosure that sees us transparently speak to what we have done well but what we could have done differently – and are proud of being recognised as a sustainability leader and included in the DJSI Australia.”

Manjit Jus, Global Head of ESG Research and Data, S&P Global, said:

"We congratulate IGO Limited for being included in the DJSI Australia. A DJSI distinction is a reflection of being a sustainability leader in your industry. With a record number of companies participating in the 2020 Corporate Sustainability Assessment and more stringent rules for inclusion this year, this sets your company apart and rewards your continued commitment to people and planet."

--- ends ---

[I hold IGO shares.]

19-Nov-2020:  2020 AGM Presentation and CEO's Address

plus:  Chairman's Address to Shareholders at 2020 AGM   and   IGO Commences Exploration Activities on BOA's Fraser Range tenements

I also note that all resolutions put to shareholders at the AGM today were carried almost unanimously.  The "against" votes in all cases (including for the remuneration report) were less than 1% - see here.

[I hold IGO shares.]

29-7-2020:  June 2020 Quarterly Activities Report

and:  June 2020 Quarter Presentation

NOVA AND TROPICANA DELIVER ON PRODUCTION AND COST GUIDANCE FOR THE FULL YEAR

Key Points

• Underlying free cash flow1 of A$56M for the Quarter and A$311M for the year, bringing cash to A$510M along with investments of A$108M and debt of A$57M at 30 June 2020.
• Revenue and other income for the Group of A$231M and underlying EBITDA of A$113M, generating a Group EBITDA margin of 49%.
• Nova production for FY20 above guidance for all metals, at a cash cost of A$2.41 per payable pound of nickel. FY20 nickel production at 30,436t.
• Tropicana gold production was in line with the prior quarter at 102,007 ounces, with the FY20 full year gold production within guidance at 463,118 ounces.
• Tropicana Cash Costs and All-in Sustaining Costs for the Quarter were A$953 per ounce and A$1,440 per ounce respectively, with an EBITDA margin of 56%.
• Nova and Tropicana achieved underlying free cash flow of A$65M and A$15M for the Quarter and A$321M and A$85M for FY20, respectively.
• Strategic exploration joint venture and partnership agreements finalised with Metals X and Antipa, consolidating our belt scale land position in the Paterson Province.
• COVID-19 effectively managed through Quarter to safeguard our people and the community while maintaining business continuity. Although we have scaled back restrictions in line with State Government advice our response readiness remains at a heightened level.

Peter Bradford, IGO’s Managing Director & CEO said:

“I am proud to report that despite the ongoing challenges presented by the COVID-19 pandemic, our teams have continued to deliver in a way that has shown resilience, professionalism and most of all, care for one another. Our unique culture continues to be one of our greatest strengths and has been a key enabler for the strong operational and financial performance during the Quarter, and indeed the entire 2020 financial year.

“At Nova, full year production of all metals exceeded the top end of guidance for the second year in a row. This was achieved within our guided cost range and has underpinned the generation of A$311M of free cash flow for shareholders over FY20.

“Tropicana performed consistently during the Quarter, resulting in a full year production result which was within guidance range. The focus for the AngloGold Ashanti team is on the successful commissioning of the Boston Shaker Underground Mine, which is expected to reach commercial production in the September 2020 quarter.

“On the growth front, our exploration teams have been busy drill testing high priority targets in the Fraser Range and preparing a work program for the newly consolidated Paterson Project where we are targeting Tier-1 copper discoveries. We maintain our strong conviction that our exploration strategy will deliver significant organic growth opportunities for shareholders and we look forward to what our FY21 program of work will deliver.”

--- click on link above for the full report - and the associated presentation ---

[I hold IGO shares]

30-Apr-2020:  March 2020 Quarterly Activities Report

Also:  March 2020 Quarter Presentation

IGO is one of my two preferred nickel plays.  The other one is WSA - Western Areas.  I don't currently hold either of them.  I tend to trade them, and I feel that copper is going to rise before nickel will coming out of this economic downturn, so I'm holding off on nickel exposure right now.  I do have shares in South32 (S32) however, which do produce nickel as well as other metals. Unfortunately, by the time the metal price moves, it can sometimes be too late to jump on the producers of that metal, because the market is foward looking and often the price of the producers actually rises before the metal prices rise, based on what the market is predicting is going to happen rather than what has already occurred.  However I'm just not currently that bullish on nickel that I want to invest in nickel producers over other opportunities I see today in the market - coz I see LOTS of opportunities, far more than I have dollars to invest in all of them actually...

02-Aug-2019:  Nova Site Visit Presentation

02-Aug-2019:  Tropicana Gold Mine Site Visit Presentation

June 2018:  Independence Group (IGO) is a smaller miner who currently mine nickel, copper, cobalt, gold, zinc and lead.  IGO own 30% of the high grade Tropicana gold mine that is 70% owned by (and operated by) AngloGold Ashanti (AGG), but the main game for IGO is their 100% owned Nova nickel/copper mine (which also produces cobalt).  All of IGO's 100% owned assets (which excludes the 30%-owned Tropicana gold mine) produce battery metals.  Nova is a world-class, low-cost nickel mine, and there is enormous exploration potential throughout the Nova-Bollinger system and surrounding area (IGO's tenements), which could extend the life of the Nova mine even further.  Nova was constructed and commissioned in the past couple of years, so is a very new mine that is only just hitting their straps now.

Good management, paying down their construction-related debt fast, just sold their aging Jaguar copper-zinc-silver mine to CopperChem, a wholy owned subsidiary of Washington H Soul Pattinson (SOL) for $73.2m, heaps of further potential upside at Nova-Bollinger, producing battery metals: nickel, copper, cobalt.

http://www.igo.com.au/IRM/content/default.aspx

AMEC Convention 2018 Presentation by Independence Group (IGO) 14-June-2018

Disclosure:  I hold IGO shares.

MiningNews.Net: IGO Excited by Creasy Find