IGO (ASX:IGO) executives highlighted improving safety performance, strong quarterly results from the Nova nickel operation, and an improving quarter at Greenbushes as the company discussed its latest results and operational priorities on a conference call led by Managing Director and CEO Ivan Vella.
Safety and operational execution
Vella said safety performance continued to improve, which he attributed to sustained attention and cultural focus across the business. He linked that progress to operational discipline, particularly at Nova, where the company reported a strong quarter despite the mine approaching end of life.
Nova: strong quarter, end-of-life focus
NOVA was described as delivering “really, really strong” performance in the quarter, with production and costs benefiting from improved execution following what Vella called a “start misfire” in the first quarter that has since been addressed. He said Nova is tracking well against end-of-mine-life guidance and the company has confidence in performance through to the end of the calendar year.
Sales volumes were lower due to shipping plans, with Vella describing the impact as largely timing-related (one fewer ship in the quarter) and not materially concerning. He said the company remains focused on managing costs as the operation ramps down, adding that it is “certainly not looking to carry anything that we don’t need to” as it moves toward closure in 2027.
Greenbushes: production improvement, pricing leverage, CGP3 ramp-up
At Greenbushes, Vella said the December quarter was better than the prior quarter, which had been affected by rain and grades. He said grade improvements are expected to “lift through the second half of the financial year.” When asked later about grades, Vella indicated they were back above 2% and said the existing business should see a lift in production in coming quarters, aside from any contribution from CGP3.
IGO reported a realized price of AUD 850 for Greenbushes in the quarter. Vella said the business benefits from pricing mechanisms closely connected to published price assessments, which he said creates a close link to spot prices and reduces lag from longer-term contractual frictions. Cath, who reviewed financial highlights, also noted that the company runs about a one-month lag with pricing and said the next quarter should reflect higher pricing.
Vella also discussed Greenbushes’ margin profile, citing 64% EBITDA margin for the last quarter and stating that the mine remains a high-margin asset even at the bottom of the cycle. He said the operation’s cash conversion is strong and does not require heavy reinvestment to maintain production.
A central focus for Greenbushes is the ramp-up of Chemical Grade Plant 3 (CGP3). Vella said CGP3 is “fit for start” and producing concentrate this month, with the key task now being a smooth ramp-up. In Q&A, he estimated roughly five months to reach nameplate capacity, targeting the end of the calendar year.
He provided some detail on early commissioning issues, describing them as equipment-related, including mill realignment and resealing. He said the downtime was also used to check motors and pumps and replace some parts to improve confidence in the next phase of ramp-up. He added that feed and staffing were not seen as major risks and that vendor support is in place, but cautioned that early-stage commissioning still carries unknowns.
On CGP3 operating parameters, Vella cited roughly 500,000 tonnes and said design feed grade is similar to CGP2 at about 1.8%. He said the company is targeting higher recoveries than test levels, but did not commit to specific outcomes at this stage.
Life-of-mine optimization and productivity at Greenbushes
Vella said Talison is conducting a significant “life of mine optimization” review with external expertise, reassessing mine design, ore characterization, waste and tailings management, and grade strategy “top to tail.” In parallel, the company is pursuing productivity initiatives spanning mining, plant utilization, recovery, and “value in use,” including whether current product grade and impurity specifications are optimal for both customers and the operation.
As an example of value-unlock opportunities, Vella discussed work evaluating steeper pit walls. He said successful pit wall steepening could materially reduce strip ratio and expose additional high-grade ore, though he emphasized the geotechnical risks and the need for careful management, particularly given the mine’s long operating history.
When asked for timing, Vella said there is no updated expected date for completion of the life-of-mine optimization and noted technical work remains ongoing. He said some elements may begin to emerge in a reserve and resource update later in February, and that topics under review include the role of underground mining and the sequencing of open pit versus underground extraction. He also said “CGP4 is in the mix,” but the optimal timing has not yet been determined.
Kwinana: steady output, cost impacts from shutdown
At Kwinana, Vella said the quarter was broadly in line with prior periods but impacted by a shutdown that reduced available production days. He said the facility finished the last month at about 50% capacity, which he described as the best monthly level seen so far at the refinery. However, he reiterated that the asset has a “very challenged future,” consistent with prior commentary.
In Q&A, management said conversion costs spiked in the quarter largely due to maintenance and the fact that costs are expensed rather than capitalized, while production volumes were lower during the shutdown period. Vella said the company is pressuring both operating costs and capital spending as it works through the 2026 budget for Kwinana and cautioned against treating the quarter as a new run-rate indicator.
Financial highlights: positive free cash flow and stronger net cash
Cath said net sales were down AUD 32 million, largely due to shipment timing from Nova. Nova’s EBITDA increased by AUD 42 million, including value adjustments tied to higher nickel prices in September. She said the share of net profit from the lithium joint venture structure rounded to zero, with positive profit at Greenbushes offset by losses at Kwinana, including IGO’s share of capital expenditures.
Underlying EBITDA improved to AUD 30 million, supported by Nova and mark-to-market movements on investments. She said costs were inflated by a one-off insurance payment. Free cash flow was positive at AUD 13 million, and net cash increased to AUD 299 million.
Capital allocation and distributions
Analysts questioned whether stronger lithium pricing could translate into shareholder distributions. Vella said it was too early for decisions, noting a capital framework at the joint venture level and that any dividends would depend on liquidity needs, cash flow visibility, and broader market conditions. He said the company is not prioritizing de-gearing over distributions, describing both as important considerations within the structured framework.
On broader growth outside lithium, Vella said the company’s approach remains disciplined and return-focused, with a “very high bar” for capital allocation. He said stronger lithium cash generation does not change the criteria for investments in other opportunities.
About IGO (ASX:IGO)
IGO Limited operates as an exploration and mining company that engages in discovering, developing, and operating assets focused on metals to enable clean energy in Australia. It owns and operates a 100% interest in the Nova nickel-copper-cobalt operation located to the east northeast of Norseman in the Great Western Woodlands of Western Australia; a 100% interest in the Cosmos nickel operation located to the north of Leinster in Western Australia; and a 100% interest in the Forrestania nickel operation located to the east of Perth in Western Australia.
