A significant increase in valuation of Highlands Pacific Limited (HIG) interest in the Ramu nickel cobalt mine has achieved a net profit of $37.4 million (K115 million) for the 2017 financial year.
This is compared with a prior-year loss of $15.8 million (K48 million) in 2016, as revealed in HIG’s 2017 Annual Report released to the Port Moresby Stock Exchange (POMSOX) last month.
HIG’s achievement follows Ramu achieving record annual production of 34,666 tonnes of nickel for 2017, which was up by 55%, and cobalt production also increased to 51% or 3308 tonnes.
This coincided with a strong rebound in nickel and cobalt prices due to increased demand for battery metals. Nickel has continued to strengthen during 2018 and is now trading at more than US$13,000/t, while cobalt has surged to record levels of US$80,000/t.
This combination enabled Ramu to achieve record earnings in 2017, with Highlands’ share of Ramu’s profit increasing to $3.5 million (K10.7 million), compared with a loss of $5.6 million (K17 million) in the prior year.
HIG ended 2017 with a healthy cash balance of US$6.8 million (K20.8 million).
HIG CEO, Craig Lennon, said they are pleased with the excellent operating performance of the Ramu operation in 2017.
“The outlook for Ramu remains very favourable over the medium term, with ongoing advances in battery technologies and electric vehicle production likely to underpin continued strength in nickel and cobalt prices.
“While many other companies are now aspiring to become producers of battery metals in the coming years, Ramu is already one of the largest producers of cobalt in the world and has a potential mine life of more than 30 years ahead of it.
“Highlands is perfectly placed to benefit from future growth in demand for nickel and cobalt, and we have major exposure to copper and gold through our 20% interest in the giant Frieda River project, as well as our 100% ownership of the exciting Star Mountains exploration project.
“We are entering 2018 with confidence and we look forward to reporting further progress in the development of our projects in the current year,” Mr Lennon said.
Meanwhile HIG will be hosting its annual general meeting on May 17th at the Crowne Plaza Hotel in Port Moresby.