IGO slashes value of its new nickel mines by 75pc
Critical minerals producer IGO has slashed 75 per cent off the value of two nickel mines it bought for $1.3 billion just one year ago from Western Areas.
Up to $980 million has been written off the value of the Cosmos and Forrestania mines, the company said in a statement on Monday.
Matt Dusci, acting chief executive officer of IGO Trevor Collens
The miner now expects the two assets, located in WA, to attract higher capital and operating costs, cause a blow-out to its mine production schedule, and force development delays at Cosmos.
IGO withdrew guidance for the Cosmos asset, and placed the project under review “to better understand risks and opportunities to the current life of mine plan, capital cost estimates and schedule”.
IGO’s acting chief executive officer, Matt Dusci, described the write-down as “disappointing”. The stock fell 5.5 per cent to $15.24.
“While the project development team has made solid progress to advance Cosmos towards first production, capital and operating cost escalation and unforeseen operational challenges have impacted the value of the project,” Mr Dusci said.
The board and management team added they “acknowledge the quantum of this impairment is significant”.
The review of Cosmos will be completed in the December quarter, the company said. It expects to provide further detail in its June quarterly result, scheduled for July 31.
IGO bought the mines from Western Areas in June last year because it needed an asset with at least a ten-year mine life to warrant an investment in downstream processing.
IGO owns and operates the Nova nickel-copper-cobalt operation, but the nickel reserves have less than five years left, which means they can’t support a downstream investment.
“As a long-life nickel
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