The IGO Ltd (ASX: IGO) share price is on the move on Monday morning.
At the time of writing, the battery materials focused mining company's shares are up 4% to $10.03.
Why is the IGO share price storming higher?
Investors have been bidding the IGO share price higher this morning following the release of its first quarter update.
For the three months ended 30 September, IGO's Nova production was within guidance, with nickel, copper, and cobalt production of 6,889 tonnes, 3,023 tonnes, and 253 tonnes, respectively. In addition, Nova's cash costs of $1.99 per payable pound was better than guided to.
In respect to its financials, IGO's sales revenue was 29% lower quarter on quarter to $189.2 million. This was driven by the divestment of the Tropicana Gold Operation on 31 May 2021.
It was a similar story on the bottom line, with IGO's net profit after tax falling 90% quarter on quarter to $46 million. This was due to the previous quarter including a post-tax gain on the sale of the Tropicana Operation of $385 million.
At the end of the period, IGO's total cash stood at $552 million. This is an increase of $24 million since the end of June and does not include its undrawn debt facilities of $450 million.
Management commentary
IGO's Managing Director and CEO, Peter Bradford, commented: "We are pleased to have commenced FY22 strongly with a solid quarter of safe performance from Nova. In parallel, good progress was achieved within the lithium joint venture, with key growth projects being advanced during the first reporting period following the successful completion of IGO's investment in the lithium joint venture with Tianqi Lithium Corporation."
"At the Greenbushes Lithium Mine, Chemical Grade Plant 2 has been commissioned, Tailings Retreatment Plant construction activity was progressed with commissioning expected in early 2022, and the EPCM contract for the design and engineering for Chemical Grade Plant 3 was awarded to Lycopodium Limited."
"At the Kwinana Refinery commissioning of Train 1 has been progressed with a key milestone achieved during August with the first lithium hydroxide produced," he added.
Mr Bradford notes that the above developments come at a time when lithium demand is increasing strongly, driving prices higher. This could bode well for the company's future and the IGO share price in 2022.
The IGO share price is now up 49% in 2021.
