Independence (ASX:IGO) result meets downgraded guidance

Stock

Independence Group (ASX:IGO) $4.37 as at 29/08/2018

Event

Nickel / gold miner Independence Group (ASX:IGO) posted a bumper FY18 profit thanks to contributions from their new Nova nickel project. The stock had fallen steadily over the past few months thanks in part to a weak resources sector, but also due to the high expectations the market had held for the nickel mine. The market was forced to rebase earnings for the year at the 3rd quarter fearing numbers were too high, but a solid 4th quarter has helped the full year numbers beat the streets expectations, likely helped by higher grade nickel production in the quarter despite production numbers falling short of previous guidance.

Currently about a third of IGO’s sales are generated by gold through the Tropicana mine, however this number is falling as the company moves more towards nickel and copper. Production guidance was solid, driven by the Nova projects higher than expected run rate.

Independence Group (IGO) Chart

Market Matters Take/Outlook

We like the diversified exposure received from IGO, especially when looking for copper and nickel exposure. Both commodities have seen their fair share of weakness recently and we are looking for signs that the tide is turning. IGO has turned disappointing announcements throughout the year into a good result and we believe that their projects have turned a corner. View reports on resource stocks here.  View the full report here ‘Boral (BLD) the standout on the reporting front today (BLD, IGO)’