The Independence Group NL (ASX: IGO) share price has been a big mover today following the release of its half-year results. Its shares dropped upwards of 8% in morning trade before recovering slightly.
At the time of writing, the miner's share price is lower by 4.5% to $4.02.
Today's decline may come as a surprise to shareholders considering Independence reported net profit after tax of $20.2 million, compared to a $77.8 million loss in the prior corresponding period.
Whilst the result was reasonably strong and the company delivered an impressive all-in sustaining cost of $1,070 a tonne, its production guidance for FY 2017 is likely to have disappointed some investors.
Although the miner's Tropicana, Long, and Jaguar mines look set for another solid year, issues at its Nova mine are a concern.
Underground development at Nova is currently behind plan, resulting in potential delays to its ore production ramp up. As a result its FY 2017 Nova guidance could be halved, with production being deferred to FY 2018.
In April, when its mining contractor Barminco is expected to be operating at design development rates, the company intends to update the market on its FY 2017 guidance.
Is it a buy?
Whilst the delays at Nova are disappointing, I believe this has now been priced into its current share price.
Better late than never, Nova will commence production eventually and add close to 30,000 tonnes of nickel, 13,000 tonnes of copper, and 1,000 tonnes of cobalt to the company's annual production from FY 2018 onwards.
So investors that are bullish on gold and base metal prices moving forward might want to consider Independence group because of its low all-in sustaining costs and valuable assets.
Unfortunately I'm not bullish on gold prices in the long-term, so I won't be making an investment today. But I'll happily admit that like Northern Star Resources Ltd (ASX: NST) and St Barbara Ltd (ASX: SBM), Independence is a great option for investors if the gold price remains at current levels in the long-term.
