Monsters of Rock: Copper, nickel and iron ore miners in the line-up as reporting season’s end draws near
We counted no fewer than 13 gold miners releasing their production results on a crowded morning of March Madness.
You can check the highlights (our version of Optus Sport’s mini-match) below … and they’ll make you feel far warmer and fuzzier than the prospect of watching a Norse God lead the Abu Dhabi royal family and Manchester City to another Premier League title.
They were led by Sandfire Resources (ASX:SFR), which is showing signs its transition from the company that set the world alight with the DeGrussa discovery in WA’s transition into a global copper play will continue to be a bumpy ride.
The firm has refined its metal guidance to 87,000t of copper, 86,000t zinc, 9000t lead, 20,000oz gold and 2.8Moz of silver at C1 costs of US$1.79/lb in FY23 after producing 18,509t Cu, 21,294t Zn, 2269t Pb, 5111oz Au and 700,000oz Ag in the March quarter at US$2/lb.
Most of that came from the MATSA copper operations in Spain, where copper equivalent production rose 10% to 25,000t on higher zinc, lead and silver numbers. It is replacing the DeGrussa mine where mining ended last year and Sandfire is running down oxide stockpiles to eke the last bits of glory from its once Mid-West flagship.
It is hoping to be on a more level footing at MATSA as energy cost issues that plagued Sandfire immediately after picking up the keys last year — unfortunate timing in hindsight with Russia’s invasion of Ukraine about to launch — subside.
Energy costs fell from 20% of the cost base in September to 10% with long-term contracts for “fixed price, carbon emissions free energy” and a big drop in exposure to spot energy expected from 2024.
Meanwhile, concentrate at the first 3.2Mtpa stage of the Motheo copper and silver mine in Botswana is due within days. An expansion to 5.2Mtpa should see SFR’s copper equivalent production rise 25% on FY22 levels to 160,000tpa by FY25.
New boss Brendan Harris, delivering his first quarterly results today, said he’d been impressed with the team and projects.
“Copper’s role in the electrification and decarbonisation of the global economy will become increasingly apparent over time and Sandfire has a foothold in two strategically important copper provinces, being the Iberian pyrite and Kalahari copper belts, as well as a raft of other opportunitis at various stages of maturity,” he said.
“I look forward to continuing the excellent work the team has underway to establish Sandfire as a truly sustainable mining company and global copper producer of significance.”
Shares in AIC Mines (ASX:A1M) lifted more than 1% as it delivered a $4.1m rise in net mine cashflow to $0.5m, with operating cashflow of $11m and net revenue of $33.6m on 2467t of copper sales, 1228oz of gold sales and 23,419oz of silver sales from its Eloise mine in Queensland in the March quarter.
That came despite high rainfall, with the development of the shallow Macy North deposit helping improve trucking rates and production levels improving in March and into April. Processing grades also lifted from 1.8% in the September quarter to 1.97% in December and 2.14% in March, though at all in sustaining costs of $5.76/lb, the cost of production was relatively unchanged.
Lower capex, however, meant all in costs fell from $6.93/lb in the September period to $6.51/lb in December and $6.12/lb in March against an average copper price of $6.09/lb.
A1M has lodged regulatory applications to mine the Jericho deposit picked up in its takeover of Demetallica last year, which it plans to develop over the next couple of years to ramp up production to 20,000t of copper and 10,000oz of gold per annum.
Fellow copper play 29Metals (ASX:29M) ate a 1.75% drop as it revealed the hit to production from a major rainfall event at its Capricorn Copper mine in Queensland, which was suspended on March 8.
Output for the March quarter fell from 8,000t in December to 5,800t across Capricorn and the Golden Grove mine in WA, though zinc output from Golden Grove also fell from 22,000t to 8700t, with gold production falling from 8,100oz to 3000oz and silver production sliding from 532,000oz to 191,000oz.
Despite that AISC dropped from US$4.34/lb of copper sold to US$4.13/lb.
MD Peter Albert said the quarter was always going to be weaker and was impacted by the suspension at Capricorn. Work is planned to help turn around its performance at Golden Grove.
“As outlined in this report, operating efficiencies and cost reductions have been identified and we will be implementing plans to realise improved costs performance in the coming months,” he said.
“The team is focused on the performance improvement required and committed to deliver.
“As flagged on 20 April, we expect to finalise the Capricorn Copper recovery plan shortly, and we plan to provide an update to the market in mid-May. At the same time, we plan to provide an update regarding the outlook for Golden Grove beyond 2023.”
$220m capped cobalt miner Jervois Mining (ASX:JRV) didn’t have too much further to fall after low cobalt prices forced the company to suspend construction at its Idaho cobalt ops in the States.
But the company, which refines cobalt for battery makers in Finland, enjoyed a massive lift today after entering positive cash flow, turning over US$1.3 million after ramping up cobalt sales by 15% to 1558t.
The company is planning to hit positive EBITDA this month, ahead of a study on expanding its refinery business into the USA, where it is planning to leverage support from the Inflation Reduction Act.
Jervois saw revenues fall from US$73m to US$57.6m in the March quarter but swung from a $6m drain in cash to positive cashflow QoQ. JRV did see adjusted EBITDA losses blow out from US$7.1m in Q4 2022 to US$10.4m in Q1 2023, but says it made the decision to process the last of its high priced raw materials bought from suppliers last year before cobalt prices sunk.
The company also says consumer electronics and auto demand will lift in 2024, painting a rosier picture for demand in the years ahead after extreme volatility last year.
Keeping with the battery metals sector, Nickel Industries (ASX:NIC) announced record RKEF production of 26,665t of nickel metal for the March period, including 22,338t of nickel in nickel pig iron and 4327t of nickel in high grade matte. It represents a lift in production of 139% in just one year.
The ASX-listed, Tsingshan backed producer saw record sales of US$487.9m on a 100% basis, up from US$371.2m a quarter earlier, with record quarterly EBITDA of US$100.2m (up from US$90m) on margins of US$3025/t for NPI and US$4947/t for matte.
NIC boasted an impressive US$808m of cash, receivables and inventory at the end of the quarter, up from US$532.6m on December 31, with its margins expanding on the rollout of the new Angel and Oracle RKEF lines.
“With ONI now at 85% of nameplate capacity and recording first sales through receipt of its IUI, we expect, as the associated power plant commissions later in the June quarter, significant further production growth as ONI ramps up to 130% of nameplate capacity consistent with the ANI ramp up,” NIC MD Justin Werner said.
“Commissioning of the power plant and further ramp up of ONI, should continue to significantly reduce ONI’s costs which decreased by 25% over the quarter. As ONI’s costs continue to move in line with ANI, we expect this to translate into similar margins as those currently being achieved by ANI.
“Our decision to invest in the newer lower cost ANI and ONI RKEF lines (8 lines in total) is driving our continued record production and EBITDA.
“The greater margin of these newer RKEF operations can be seen in the US$4,894 tonne margin from ANI across the quarter vs US$1,559 tonne margin from RNI, with these lower cost, higher margin operations anticipated to form 80%+ of our production base moving forward.”
Finally, high grade iron ore miner Champion Iron (ASX:CIA) reported record quarterly production of 3.1 million wet metric tonnes of 66.1% iron ore concentrate from its Bloom Lake complex in Canada, with annual production of 11.2Mt up from 7.9Mt last year.
The doubling of Bloom Lake’s capacity to 15Mtpa is near the end of its ramp up.
However, it unsurprisingly saw a lift in costs from C$60/dmt to C$79/dmt YoY on ramp up costs along with inflationary pressures and contractor costs.
Meanwhile, the Champion Iron board approved additional early funding to accelerate a ~C$500m project to produce a higher grade direct reduction pellet feed, intended to be completed by H2 2025, which will make it a supplier for low emissions DRI steelmaking.