Independence Group NL

Decent Outlook: Independence Group NL (ASX: IGO) is a leading exploration and mining company in Australia. The company has key spotlight on high-quality assets of scale and longevity, and an evolving strategy to align the business to the structural shift to energy storage. Recently, the company disclosed Q4FY18 results which have been broadly in-line as per expectation and guidance for the full year. As per the release, the production at both Tropicana and Long unit was comfortably within the FY18 full-year guidance range while Nova nickel production for the June 2018 quarter was 3% below the lower end of the guidance range. Recently, the company increased its Fraser Range tenement holdings with the $21 Mn acquisition of Mark Creasy’s Southern Hills tenements, which shows several drill-ready targets. The objective of this deal is to strengthens IGO’s position on the highly prospective Fraser range.

On the financial front, RoE moderately turned around to 0.2% in 1HFY18 from the past six months. The current ratio and Quick ratio stood at 1.57x and 1.12x in 1HFY18 which is broadly in line with Industry median (i.e., 1.78x and 1.18x, respectively). The Group lately issued 3,095,408 ordinary fully paid shares at an issue price of $5.08 per share to equally rank with all existing shares from the date of the share issue under 70% managing interest in the Southern Hills tenements announcement on ASX. As of now, the group focuses on the key objectives, empowering the people, and building confidence to invest in the future generation of mining.


Expected Product Mix Growth for Full Year (Source: Company Reports)

Meanwhile, the share price of IGO has fallen 7.39% in the past six months and down by 2.73% in past one week as at July 24, 2018. The stock climbed up 3.664% on July 25, 2018 with the sector driven positive sentiments in support from base metal rebound. Based on aforesaid facts and expectations, we maintain our “Hold” recommendation on the stock at the current market price of $ 4.810.

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