THE WEST AUSTRALIAN
Tuesday, 22 January 2013 08:17
Despite a small drop in nickel production and an increase in costs, Western Areas managing director Dan Lougher said everything was running smoothly at the nickel miner's WA operations.
Speaking after the release of the company's quarterly report yesterday, Mr Lougher said costs were still below the company's $3 a pound guidance level and the small drop in production was because of intricacies in the grade and mining process.
The company mined 6957 tonnes of nickel over the quarter, down from 7504t during the September quarter. Cash costs, which excluded royalties, were $2.89/lb - up from $2.49/lb.
Patersons Securities called the quarterly results "solid", with production 22 per cent above its estimate. RBC Capital Markets said although it expected production to be lower in the second half, there was "strong chance" Western Areas would beat its production guidance for the financial year.
Mr Lougher said the company's recent $65 million capital raising, of which $45 million was to pay off debt, would allow it a buffer to act on any potential joint venture investments or acquisitions.
The company allocated the $15 million parcel of its share purchase plan yesterday, after it received applications for $26.5 million.
After a tumultuous year following the lethargic nickel price, Western Areas will be holding out for a bump in prices for the metal this year. Yesterday nickel was trading at $17,550/t. Western Areas ended 4¢ down at $4.37.
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