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- IGO (ASX:IGO) announces it expects to record a non-cash, pre-tax impairment expense after processing the purchase of Western Areas (WSA) in June last year
- impairment is expected between $880m and $980m in its financial results for FY23
- It is in relation to the reassessment of the accounting value at Cosmos and Forrestania reflecting higher capital and operating costs, challenges to the mine production schedule, and delays in development
- The non-cash impairment will not impact the FY23 EBITDA, it will be recorded in the Company’s FY23 Audited Financial Result
- The project’s review to better understand the risks is expected in the December quarter, with June quarterly results scheduled for the end of July
- Shares were down 4.87 per cent at $15.33 at 12:12 pm AEST
IGO (IGO) has announced it expects to record a non-cash, pre-tax impairment expense after processing the purchase price allocation of Western Areas (WSA) in June last year.
The company expects an impairment of between $880 million and A$980 million in its financial results for the 2023 financial year.
The impairment is in relation to the reassessment of the accounting value at Cosmos and Forrestania reflecting higher capital and operating costs, challenges to the mine production schedule and delays in development.
As a result, guidance provided on the 31st of October 2022 in relation to Cosmos has been withdrawn.
While the non-cash impairment will not impact the FY23 EBITDA, it will be recorded in the Company’s FY23 Audited Financial Result.
The impairment does not include changes in the mark-to-market value of IGO’s shareholding in Panoramic Resources, which is acquired as part of the WSA acquisition.
IGO’s acting CEO, Matt Dusci said he is “disappointed” by the “significant impairment.
“While the project development team has made solid progress to advance Cosmos towards first production, capital and operating cost escalation and unforeseen operational challenges have impacted the value of the Project,” Mr Dusci said.
“As a long-life nickel asset, Cosmos remains important to our nickel business and provides potential downstream optionality via our aspirations to develop an Integrated Battery Materials Facility in Western Australia.”
The review of the project to better understand the risks is expected in the December quarter, with June quarterly results scheduled to be released at the end of July.
IGO was down 4.87 per cent at $15.33 at 12:12 pm AEST.
