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Summary
- Base Metals are showing some steam with prices of copper and nickel climbing the price ladder swiftly on the London Metal Exchange and on the global front.
- The surge in base metals prices has finally led towards the revival of many suspended copper and nickel prospects across the continent, including the Nifty Copper operation of Metals X Limited (ASX:MLX).
- Not just the revival, the surge in the price has also prompted many ASX miners such as Independence Group NL (ASX:IGO) to fast track and expand exploration programs across various prospects including the Fraser Range, Nova, and Tropicana.
- Such fast track production impetus along with various performance improvement across such prospects are now transcending into higher production with production at IGO’s Nova operations beating FY20 production guidance and production at IGO’s Tropicana meeting expectations.
Base metals are back in action with copper and nickel prices climbing swiftly and supporting ASX-listed metals and mining stocks.
While gold and iron ore along with some other precious commodities such as palladium remained top- performing commodities of the year so far, base metals prices have started moving up the ladder, leading to a sentiment splash in ASX-listed base metals stocks such as Independence Group NL (ASX:IGO).
To Know More, Do Read: Commodity Stocks Making Their Way To The Top
The surge in base metals prices has prompted many ASX-listed mining companies to rethink on their halted projects. For example, recently, Metals X Limited (ASX:MLX) completed the identification of a large open-pit at its previously suspend Nifty Copper operations and improved the scoping measures of the prospect, while IGO was recently wafting steam in its exploration program at the Fraser Range prospect and more recently kick started the ground activities in West Kimberley Joint Venture
To Know More, Do Read: Metals X Updates Nifty Resources While Independence Expands EL at Fraser Range
Independence Group NL (ASX:IGO)
The Company announced a preliminary metal production report for the June 2020 quarter.
Also Read: Nickel Rush- IGO Rejuvenates West Kimberley JV, MLX Inks Farm-in and Unveils Long-Life Open Pit
Nova Production Exceeds Production Guidance While Tropicana Meets Expectations
The Company managed to produce 7,181 tonnes of contained nickel and 3,210 tonnes of contained copper from its Nova operations during the June 2020 quarter, leading to a yearly production of 30,436 tonnes of contained nickel and 13,772 tonnes of contained copper.
Nova operations demonstrated a strong year of performance with all major metals production including nickel, copper, and cobalt, surpassing the upper range of the FY20 production guidance.
- The yearly or FY20 production from Nova of both nickel and copper managed to surpass the upper range of the FY20 production guidance, which was between 27,000 to 30,000 tonnes for nickel and between 11,000 to 12,500 for copper.
- The cobalt production for FY20 reached 1,142 tonnes with the production of 277 tonnes in June 2020 quarter, surpassing the upper range of the FY20 guidance of 850 to 950 tonnes.
Also Read: Copper- An Emerging Gold for ASX Copper Stocks; Long-dated Spreads in Contango
Furthermore, the Tropicana prospect (30 per cent stake) of the Company also witnessed a year of strong performance with the gold production from the prospect meeting the guidance range.
The gold production during the June 2020 quarter stood at 102,007 ounces (on a 100 per cent basis), leading to a yearly production of 463,118 ounces of gold, which remained well within the production guidance range of 450,000 to 500,000 ounces of gold.
Market Reaction and Prevailing Sentiments
The stock of the Company is presently under a recovery mode with prices recouping from $3.270 (intraday low on 23 March 2020) to the present high of $5.420 (intraday high on 9 June 2020), which marks a price appreciation of ~ 65.74 per cent.
However, post reaching the recent high of $5.420, the stock fell and entered a consolidation, and is presently trading at $5.050 (as on 9 July 2020, AEST: 2PM).
IGO Daily Chart (Source: EODHD/Others Eikon Thomson Reuters)
On following the daily chart, it could be seen that post breaking below its short-term trendline, the stock took the support around the minus 2 standard deviation of the 20-day simple Bollinger band and surged to breach the resistance trendline, which should now act as immediate support for prices.
- Furthermore, IGO is currently trading above the 200-day exponential moving average with 9-day EMA crossing 20-day SMA from below, reflecting that the short-term trend for the stock is now an uptrend.
- The current resistance for the stock is around its 200-day EMA. Also, the plus 2 SD of the Bollinger is overlapping with the 200-day EMA, suggesting that the current resistance is a decisive resistance for the medium-term.
IGO Daily Chart (Source: EODHD/Others Eikon Thomson Reuters)
On further applying plus and minus Directional Index on the daily chart, it could be seen that the plus DI has crossed the minus DI from below, which coupled with a slight positive indication from 12,24,9 MACD indicator is reflecting that bullish sentiments are currently taking roots.
Additionally, the 14-day Average True Range is now sloping upwards, which coupled with an above mean RSI suggests that the price action might be able to seed bullish sentiments over a short-run.
