Nickel miner, Western Areas was another to join the lists of resource companies reporting better results this reporting season.
The WA-based nickel miner posted a full-year profit of $19.3 million, up from a $29.8 million loss in 2015-16 after lifting annual revenue by 2% to $214 million.
That profit though was helped by $25.6 million from the sale of its stake in UK-based Blue Jay Mining and the $7.5 million tenement sale and joint venture agreement with Kidman Resources over several of its Forrestania tenements in WA.
Western Areas said in its release yesterday that 2016-17 saw it return to profitability, with strong free cashflow generation, significant EBITDA improvement over the prior year and a debt free balance sheet which “placed the Company in a strong financial position to fund growth projects.”
The company continued to struggle with a soft nickel prices over the year to June, although since around April May of this year, prices have started creeping higher and currently sit around their highest level for more than six months with the lME futures price above $US11,000 a tonne last week.
The company said it had more than $140 million in the bank at June 30, up from $75 million a year earlier.
CEO Dan Lougher said the company welcomed a return to profitability and the payment of a final dividend to shareholders following a year of significant achievement.
“Following the nickel price hitting a low of around US$3.90/lb in June 2017, the beginning of FY18 has commenced positively with the August 2017 price currently averaging US$4.75/lb,” he said yesterday.
“Pleasingly, strong demand in the high end stainless steel market, particularly in China, has remained robust, whilst the activity in the electric vehicle (“EV”) battery market is growing exponentially.
“We have witnessed the EV supply chain demand first hand with the level of in‐bound enquiry for nickel offtake supply increasing markedly over recent months.”
Mr Lougher said Western Areas is hoping to take advantage of the growing demand for nickel sulphide for electric vehicle batteries with its Mill Recovery Enhancement Project, which is on target for commissioning in the March 2018 quarter.
“We are effectively creating a product for the EV battery supply chain from a specific cut of the live tailings stream that was previously discarded,” Mr Lougher said.
BHP is another WA nickel producer looking to grow into the battery space spending $US43 million on a sulfate plant at its Kwinana refinery, south of Perth).
The company will pay a 2c-a-share final dividend up from nothing a year ago.
