A key supplier to BHP (ASX:BHP) and its Kambalda nickel concentrator, part of the battery-focused Nickel West division, Mincor saw $20.3m of receipts from its primary customer in the third quarter after processing and freight charges on deliveries up to November.
The total year to date has hit $31.82m, but MCR saw operating losses of $9.65m in the quarter including $12.3m in outflows from the settlement of mandatory hedges with BNP Paribas for 1101t at an out of the money $21,000/t.
Mincor, which still had $85.5m in the bank at December 31 after an oversubscribed $55m share placement, has pledged to ramp up production from its Cassini and North Kambalda operations in the second half.
It has maintained full year guidance of 8000-10,000t of nickel in concentrate, having delivered 1015t in the December quarter and 1943t for the first half of FY23.
The company, which saw the introduction of new MD Gabrielle Iwanow during the quarter, has now delivered 48% of its hedge book with 24% cash settled and only 2443t of future production for 2023 hedged under its mandatory hedging program.
That should see the company take advantage of higher nickel prices, up 44% in Australian dollar terms during the quarter to $44,908/t, almost double the price in MCR’s 2020 DFS.
“Operational ramp-ups always come with their challenges, particularly in a macro environment that has seen significant cost inflation and labour shortages. That said, the team is doing an incredible job to manage these challenges, and we made substantial progress during the quarter,” Iwanow told shareholders.
“Since commencing with Mincor in mid-November, I have focused on building on the excellent work already undertaken to now accelerate our activities and achieve the guidance we have set in the market.”
Nickel prices have been stoked by low inventories and growing use in electric vehicles, along with a well documented short squeeze that has sapped liquidity in the market and kept prices rangebound at high levels.
LME prices fell 1.9% overnight Friday to US$28,902/t, well above historical norms.
