PERTH (miningweekly.com) – Critical minerals miner Independence Group (IGO) has reported record underlying earnings before interest, taxes, depreciation and amortisation (Ebitda) on the back of a 34% increase in revenue for the full year ended June.

During the 2022 financial year, IGO generated revenues of A$903-million, up from the A$672-million generated in the previous 12 months, with underlying Ebitda increasing from A$475-million to a record A$717-million in the same period.

Net profit after tax was down 40% on the previous financial year, from A$549-million to A$331-million, owing to a one-off after-tax gain recognised on the sale of IGO’s interest in the Tropicana gold project of A$385-million in the previous year.

The net profit from continuing operations, which excluded the operating results and gain on sale of Tropicana, increased by A$214-million, reflecting the outstanding operating performance of the company’s operations, IGO told shareholders.

“Our Nova operation continued to deliver consistent production and, with the benefit of higher commodity prices, delivered record financial outcomes across all key financial metrics,” said MD and CEO Peter Bradford.

“This strong performance from Nova enabled the opportunity to expand our nickel business during the 2022 financial year with the successful completion of the Western Areas acquisition in June 2022. This transaction was a natural consolidation of the Western Australian nickel sector, delivering synergies and a stronger portfolio of nickel assets to IGO, which enables further work towards the development of a nickel downstream business for IGO.”

The acquisition of Western Areas through a scheme of arrangement was completed in June for a cash consideration of A$3.87 per Western Areas share, resulting in total consideration of A$1.26-bilion.

This transaction delivered a portfolio of operating and development stage mines, including the Forrestania operation, which comprises the Flying Fox and Spotted Quoll underground mines and the Cosmic Boy processing facility, the Cosmos project, which comprises the Odysseus underground mine development, plus a substantial broader exploration portfolio to IGO

“In parallel, we embedded ourselves into the lithium joint venture with Tianqi Lithium Corporation. This fully integrated lithium business saw significant activity and growth during the year, with commissioning of two new concentrators at Greenbushes resulting in the delivery of record operating and financial results for Greenbushes in 2022. In parallel, the first train at the Kwinana lithium hydroxide refinery was commissioned and produced first battery-grade lithium hydroxide in May 2022,” Bradford said.

“Separately at Kwinana, early works commenced towards the recommencement of construction for the second train. The lithium business contributed A$177-million of net profit and A$71-million of dividends to IGO in the first year of our ownership, which far exceeds our expectations at the time of commitment to the investment, primarily due to the subsequent astronomical growth in spodumene prices.”

Bradford said that IGO’s high-quality nickel and lithium businesses, combined with its portfolio of belt scale exploration projects focused on discovery of nickel, copper, lithium and rare earths, gave IGO a great platform to leverage off the growing demand for clean energy metals that are needed to meet the transition away from fossil fuels.

“Our focus over the coming year will be to continue to consolidate our transformative growth over the past two years, to build lithium capacity at Greenbushes and the Kwinana refinery, and bring Cosmos to first nickel production. In parallel, we remain committed to further growth to continue to deliver a globally relevant diversified portfolio of clean energy metal products, and to do this with a combination of exploration and disciplined mergers and acquisitions,” he told shareholders.

Looking ahead to 2023, IGO has set a nickel production target of between 34 500 t and 39 500 t, while copper production is targeted at between 11 000 t and 12 000 t, and cobalt production at between 900 t and 1 000 t.

Spodumene production is targeted at between 1.35-million and 1.45-million tonnes from the Greenbushes operation.