Independence Group (IGO) released September Q results with Nova Ni and Cu production both down 7% QoQ to 6.9kt and 3.2kt respectively, while Tropicana recorded strong production up 9% to 125koz gold (100% basis). Cash increased 27% to $176m and debt decreased 20% to $114m. IGO is moving into a strong cashflow period over the next 12-24 months with Nova hitting full production and mine development abating and Tropicana hitting peak production as grade streaming continues. Argonaut forecasts >$300m free cashflow (FCF) in FY19 before debt repayments. After divesting the Jaguar mine and placing Long on Care and Maintenance, IGO has a much leaner portfolio with a focus of core, high margin assets. Upgrade to BUY from HOLD due share price weakness.
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