IGO shares dip as investors hear of ‘a pipeline of growth opportunities’ at AGM

The IGO Ltd (ASX: IGO) share price closed 0.69% lower today at $15.86. That’s exactly when the IGO annual general meeting took place in Perth, commencing at 3pm AEDT.

Chair Michael Nossal told investors at the meeting that the nickel and lithium explorer, producer and refiner has “a pipeline of growth opportunities which will deliver value for shareholders for many years to come”.

The IGO share price was down for most of the day. Along with the S&P/ASX 200 Materials Index (ASX: XMJ), which finished down 1.17%.

Though it looked like making a comeback in the final hour of trade, IGO shares couldn’t sustain the rally and closed Thursday in the red.

Let’s take a look at the AGM presentation and see what else Nossal had to say.

IGO share price up 33% in 2022

Alongside most ASX lithium shares, the IGO share price has screamed higher in 2022. That’s largely as a result of rising global demand for lithium to power electric vehicles (EVs).

The miner hit a new 52-week high last Friday at $17.32.

Based on today’s closing share price, IGO is up 33% in the year to date.

This compares to a 39% bump for Pilbara Minerals Ltd (ASX: PLS) shares, a 29% lift for Allkem Ltd (ASX: AKE) shares, and a 125% skyrocket for Core Lithium Ltd (ASX: CXO) shares.

Nossal began his speech this afternoon by paying tribute to the late Peter Bradford, IGO’s CEO and managing director from 2014 until his untimely death last month at age 64.

He said a “significant part of Peter’s legacy is the transformative role he has played in pivoting the IGO business toward future-facing, clean energy metals”.

Nossal expanded:

This transformation has resulted in IGO growing to the ASX100 clean energy metals company we are today, with a world class, integrated lithium business, an expanded nickel business, enviable exploration portfolio and a pipeline of growth opportunities which will deliver value for shareholders for many years to come.

IGO in its best financial position ever

Nossal said the company was doing well financially, noting:

Financially, IGO has never been in a better position. In FY22, IGO generated record earnings and net
profit after tax, strong free cash flow and maintained our commitment to return capital to shareholders by way of dividends. With commodity prices remaining buoyant and a solid production profile ahead, we expect another strong year in FY23.

Nossal said many key project areas “are moving into the exciting phase of drill testing targets”. He added:

We remain convinced of the importance of exploration if we are to deliver the mines of tomorrow and help feed demand for clean energy metals including lithium, nickel, copper, cobalt and rare earths.

What’s next for lithium and nickel?

Acting CEO Matt Dusci gave a presentation that outlined the global supply and demand outlook for lithium and nickel.

IGO reckons “sustained deficits [are] expected to support strong pricing” of lithium, according to the presentation.

IGO notes that lithium demand remains “positive”, despite the global economic slowdown, due to the rise of EV manufacturing worldwide.

The company also said a supply shortage persisted due to “lack of exploration, development timeframes and ESG and permitting hurdles”.

The presentation included research from Macquarie showing the supply/demand imbalance would improve in CY23 before getting significantly worse in CY24 and CY25.

On the flip side, research from Wood McKenzie showed nickel supply was currently higher than demand. However, IGO noted that the research showed new supply would be needed from 2026.

IGO’s priorities for FY23 are to “continue to ensure delivery of growth opportunities within our lithium business” and “maximise our nickel business through group synergies, offtake and operational excellence”.

What else is happening with ASX lithium shares lately?

Lithium shares had a great start to the week on the back of news that China is relaxing its COVID-19 restrictions. This implies an impending boost to economic activity in China, which is the world’s largest importer of lithium.

There was also news that Australia is exploring a lithium mining and processing partnership with Indonesia. According to reporting by The Australian, the deal could make Australia/Indonesia the dominant global supplier of EV batteries.

The post IGO shares dip as investors hear of ‘a pipeline of growth opportunities’ at AGM appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why Core Lithium, Creso Pharma, Nickel Industries, and Perpetual shares are dropping
• ASX lithium shareholders rejoice! Expert tips lithium price to hit $100K
• Allkem share price up on broker upgrade: Analyst says it’s too soon ‘to underweight the sector’
• Why is the Pilbara Minerals share price pushing higher today?

Motley Fool contributor Bronwyn Allen has positions in Allkem Limited, Core Exploration Ltd., and Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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