IGO released March Q results with strong production from Nova, but lower production at Tropicana Gold (30% IGO). Nova produced 8.0kt Ni and 3.8kt Cu at cash costs of A$1.96/lb (Ni +7%, Cu +15%, costs -19%) and Tropicana produced 103.9koz gold at an AISC of A$1,303/oz (gold -22%, AISC +37%). IGO finished the quarter with $464m cash and $57m debt after generating $49m group free cashflow. IGO is in the process of cornerstoning an equity raise by New Century Zinc (NCZ) and has agree to invest up to $27m for up to 18.4% of outstanding shares. We see the Company using its strong balance sheet to undertake further M&A. BUY recommendation with a revised target price of $5.40ps (from $6.85).
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