Nickel Mines Releases Quarterly Activities Report
Nickel Mines Limited (ASX:NIC) has released a quarterly operations statement for the quarter ended 30 June 2020. The mining company has highlighted the total production of nickel from its RKEF projects of 10,104 tonnes, increasing its attributable interest to 80 per cent. This represents an increase in attributable interest from 60 per cent to 80 per cent for Nickel Mines.
The company also reports cash, receivables and inventory at the end of the quarter are down 12.4 per cent, to US$193.9 million, from US$221.4 million in the March quarter. Importantly, the release notes that severe weather impacted its operations throughout June. Additionally, the miner states that there are no impacts to its operations arising from Covid-19, as there are no confirmed cases within its operational segments.
As part of the company’s response to the uncertainty surrounding coronavirus, the mining group locked sales contracts for the June 2020 quarter so as to ascertain certainty of the pricing of nickel. Nickel Mines states that the excess nickel produced is to be sold in the September quarter.
Moreover, the group was affected by severe weather conditions such as wet season flooding and an earthquake, production, as a result, was down 8.8 per cent in the March quarter. Nevertheless, production remained above nameplate production.
Nickel Mines highlights the strong relative performance of the business in the June quarter, within the broader context of the Coronavirus pandemic, and its impacts on mining operations globally. The company reports combined production for the Hengjaya Nickel and Ranger Nickel projects of 8,423.9 tonnes.
This provided the group with an underlying EBITDA of US$24 million and an underlying net profit of US$19.9 million. As such, Nickel Mines highlights the robust safety protocols put in place, facilitating the continuation of its operations throughout the pandemic, despite minor inefficiencies arising from social distance guidelines.
Managing Director of Nickel Mines, Justin Werner, proudly promulgates the company’s move to acquire 80 per cent interest in both the Hengjaya Nickel and Ranger Nickel projects. Moreover, Mr Werner also promotes the success of the non-renounceable entitlement offer to raise A$231 million. The Managing Director highlights the importance of this move, in allowing for the company and stakeholders to benefit from the enhanced cash flows and production stemming from it.
Mr Werner also emphasises the success of the business in a short period of time since its initial public offering, becoming a globally significant producer of nickel. In addition to this, the company has a strategic partnership with Tsingshan, the world’s largest stainless steel producer. The collaboration with Tsingshan, as well as its significant holdings in several nickel projects, ensures the company is well poised to capitalise on opportunities moving forward.