Nickel Mines share price lifts following record quarter

Why is the Nickel Mines share price rising today?

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Key points

  • The Nickel Mines share price is surging 6% today 
  • The company released its latest quarterly results today 
  • Nickel Mines achieved a record EBITDA from operations, partly due to higher nickel prices 

The Nickel Mines Ltd (ASX: NIC) share price is leaping today following the release of the company’s quarterly results. The ASX nickel producer’s share price is currently $1.22, a 5.8% gain. For perspective, the S&P/ASX 200 Index (ASX: XJO) is up 1.17% today.

Let’s take a look at the news Nickel Mines has for ASX investors today.

Nickel Mines share price jumps on quarterly results

Highlights included:

  • Record US$81.7 million EBITDA from operations, up 18.7% on the December quarter
  • 11,166 tonnes of 100% nickel produced, up 10.7%
  • Record Rotary Kiln Electric Furnace (RKEF) EBITDA of US$72.8 million, up 19.7%
  • US$7,386 per tonne of nickel sold, a 22.5% increase on the US$6,028 per tonne sold in the December quarter
  • Sales revenue increased 4.4% to $195.4 million
  • Underlying cash generation from operations of US$81.3 million, up 19.9%
  • Hengjaya Mine production down 4.3% to 1,073,525 wet metric tonne (wmt)
  • Final dividend of $0.02 per share declared.

What else happened during the quarter?

Underpinning this result were record sales from the Hengjaya and Ranger Nickel projects in Indonesia. A total of 10,089 tonnes of nickel was sold from these projects alone.

Nickel Mines is also exploring the Angel Nickel project, where sales are expected to start in the June quarter.

The revenue increase was driven by an US$823 per tonne jump in the realised price of nickel. Higher nickel prices were due to rising nickel ore costs and strong demand from the global stainless steel market. The Russia-Ukraine conflict and a global nickel short squeeze created supply issues.

The company signed its biggest ever Nickel pig iron (NPI) contracts in March and April from the Hengijaya Nickel and Ranger Nickel projects.

Operating cash costs at Hengjaya Nickel and Ranger Nickel fell during the third quarter. This was in stark contrast to the previous five quarters when prices increased.

Nickel Mines commissioned three Angel RKEF lines during the third quarter.

Nickel Mines also completed the take-up of a 10% interest in the Oracle Nickel Project.

Management comment

Commenting on the results, managing director Justin Werner said:

The March quarter was a milestone quarter for both the Company’s RKEF and mining operations with numerous production and financial records set.

With increasing production from both our RKEF and mining operations, underpinned by strong and stable operating margins, we are well positioned to deliver an exceptionally strong financial performance for our shareholders over the next 12 months.

What’s next?

Nickel Mines also advised the ASX today that the Australian Foreign Investment Review Board has no objection to Shanghai Decent owning up to 22% of Nickel Mines.

Nickel Mines predicts production and EBITDA will more than triple in the next twelve months.

The company described Indonesia, where the company’s flagship projects are located, as the “epicentre of new nickel supply”.

Nickel Mines share price snapshot

The Nickel Mines share price has leapt by 13% in the past 12 months. It has fallen 16% year to date. For perspective, the S&P/ASX 200 Index (ASX: XJO) has returned about 4% over the past year.

Nickel Mines has a market capitalisation of about $3 billion based on the current share price.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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