Nickel Asia Corp. (PSE: NIKL) has announced that the company’s estimated value of shipments in 2017 rose by 9% to PhP14.45 billion from PhP13.23 billion in 2016. Although shipment volumes were lower compared to the prior year, the increase in revenues was due to higher average prices, in part the result of a change in the ore mix to higher value ore, and a more favorable Peso to US dollar exchange rate.
The estimated realized price on 9.64 million WMT of ore sales to Japanese and Chinese customers in 2017 averaged $24.46 per wet metric ton (WMT) compared to an average of $20.77 per WMT on 11.69 million WMT of ore sales realized in 2016.
With respect to low-grade limonite ore sold to both the Coral Bay and Taganito processing plants, which are linked to LME prices, the company realized an average of $4.67 per pound of payable nickel on 8.06 million WMT sold in 2017. This compares to an average price of $4.39 per pound of payable nickel on 7.56 million WMT sold in the prior year.
On a per mine basis, the company’s Taganito mine accounted for 43% of total shipments during this period. The mine shipped 3.05 million WMT of saprolite ore and delivered 4.59 million WMT of limonite ore to the Taganito HPAL plant, or a total combined shipment of 7.64 million WMT. The comparable figures for last year were 2.34 million WMT of saprolite ore and 5.66 million WMT of limonite ore, including 4.11 million WMT delivered to the Taganito plant, or a combined shipment of P8.0 million WMT.
The Rio Tuba mine accounted for 33% of total shipments, which consisted of 2.11 million WMT of saprolite ore and 3.64 million WMT of limonite ore, including 3.47 million WMT of ore delivered to the Coral Bay HPAL plant or a total of 5.76 million WMT. The comparable figures for last year were 2.27 million WMT, 3.88 million WMT and 3.45 million WMT, respectively, or a total of 6.16 million WMT.
Shipments from the company’s Hinatuan and Cagdianao mines were likewise lower during the year due to a late start of shipments as a result of prolonged heavy rains. Total shipments from Hinatuan amounted to 2.45 million WMT compared to 3.03 million WMT in 2016, while the Cagdianao mine shipped 1.85 million WMT versus 2.07 million WMT in the prior year year.
On an aggregate basis, the company sold 17.70 million WMT of nickel ore from its four operating mines in 2017 at an average price of $16.19 per WMT compared to 19.25 million WMT at an average price of $14.51 per WMT in 2016. The realized Peso / U.S. dollar exchange rate for ore sales was PhP50.42 compared to PhP47.38 in 2016.
“The change in our ore mix coupled with better prices and a more favorable exchange rate on our sales, all of which are denominated in U.S. dollars, more than offset lower volume of shipments experienced during the year,” says Gerard H. Brimo, president and CEO of the company. “With the outlook for nickel showing improvement this year, we are hopeful for an even better performance in 2018.”