LISTED mining firm Nickel Asia Corp. (NAC) swung to a profit in the first quarter of this year from a loss in the same period last year on the combined effects of shipments of higher-value saprolite ore from its Rio Tuba and Taganito mines this quarter, coupled with higher prices and a stronger US dollar.
Nickel Asia reported a net income of P377.5 million in the first quarter against a net loss of P300.8 million in the same period last year.
In a disclosure to the Philippine Stock Exchange (PSE) on Friday, Nickel Asia said much lower losses from its equity share in its investment in Coral Bay and Taganito processing plants also facilitated the turnaround, along with lower operating costs and higher prices of cobalt, a by-product of both plants.
It said its net share of the losses from its 10 percent stake in the two plants amounted to P10 million compared to a loss of P226 million in the comparable period in 2016.
NAC said its Rio Tuba and Taganito mines sold an aggregate 3.05 million wet metric tons (WMT) of nickel ore during the first three months of the year, compared to 3.49 WMT a year earlier.
The Rio Tuba mine exported 908,000 WMT of saprolite ore and delivered 950,000 WMT of limonite ore to the Coral Bay processing plant. This compares to sales of 594,000 WMT of saprolite ore and 1.37 million WMT of limonite ore during the same period last year.
The Taganito mine exported 156,000 WMT of saprolite ore and delivered 1.04 million WMT of limonite ore to the Taganito processing plant. This compares to sales of 151,000 WMT of saprolite ore and 1.38 million WMT of limonite ore a year earlier.
Typically, the company experiences low shipment volumes during the first quarter of the year since operations at the Taganaan and Cagdianao mines, both located in northeastern Mindanao, do not commence until the second quarter, the onset of the dry season, NAC said.
Improved prices also boosted revenues. In the first quarter, NAC said it realized an average of $4.66 per pound of payable nickel on its shipments of ore to the two HPAL (high-pressure acid leaching) plants during the first three months of the year, against an average price of $3.85 per pound in the same period last year.
With respect to export sales, the company achieved an average price of $31.34 per WMT, almost double the average selling price of $15.78 per WMT realized during the same period last year. On a combined basis, the average price received for sales of both saprolite and limonite ore in 2017 was $14.31 per WMT, 58 percent higher than the prior year’s $9.03 per WMT.
“We are very pleased with our first quarter results despite the business challenges and tough market conditions we continue to face,” President and Chief Executive Officer Gerard Brimo said.
“We will definitely build on this momentum as we now approach our peak shipment season which starts in the second quarter of the year,” he added.
with JAMES GALVEZ