Diversified miner IGO has generated positive free cash flow in the December quarter, underpinned by strong performances at its Nova nickel/copper/cobalt mine and the Greenbushes lithium operation, both in Western Australia. 

The ASX-listed company on Wednesday reported net sales of A$32-million for the second quarter of 2026, while underlying earnings before interest, tax, depreciation and amortisation (Ebitda) improved to A$30-million. Free cash flow was positive at A$13-million, lifting net cash to A$299-million.

CEO Ivan Vella said the company’s performance reflected operational discipline and improving safety outcomes, particularly at Nova, which is approaching the end of its mine life in 2027.

“The results from Nova have been really, really strong through the last quarter,” Vella said, noting that a focus on safety, productivity and cost control was delivering results.

Nova’s Ebitda increased by A$42-million during the quarter, supported by by-product credits and improved production performance, while the operation continued to track in line with its end-of-life guidance.

At Greenbushes, production improved on the previous quarter following weather-related disruptions earlier in the financial year. Realised spodumene prices lifted to about $850/t, reflecting strengthening market conditions.

“The lithium market is very buoyant now,” Vella said in a conference call, adding that Greenbushes’ pricing structure provided close exposure to spot market movements.

The mine remains one of the lowest-cost hard-rock lithium producers globally, delivering Ebitda margins of more than 60%.

“We are actually continuing to strengthen our position as the lowest cost lithium rock producer in the world by a long shot,” Vella said.

However, IGO acknowledged ongoing challenges in ramping up its CGP3 lithium processing plant at Greenbushes. First ore was processed late last year, with initial commissioning issues requiring remedial work in January.

Vella told analysts that the plant was producing concentrate, but that the ramp-up phase remained critical.

He cautioned that it was still early in the commissioning process, despite progress to date.

“There is plenty of unknowns, so you have to be very careful not to get too excited one way or the other,” he said.

The company expects to provide a more detailed update on CGP3’s performance at its half-year results.

In addition to the ramp-up, IGO continues to undertake a comprehensive life-of-mine optimisation and productivity review at Greenbushes, focusing on mine design, pit wall steepening, waste management and processing efficiency.

The review is aimed at unlocking additional value and extending the life of the operation.

“We have got an overall review of the entire mine,” Vella said, describing the process as “significant” and supported by external technical experts.

The company is also targeting improvements in mining fleet utilisation, plant reliability and recovery rates to support long-term cost reductions.

At its Kwinana lithium refinery, production remained in line with prior quarters but was affected by maintenance shutdowns, which lifted unit costs. Management said these costs were not indicative of longer-term trends.

Looking ahead, IGO expects CGP3 to reach full production by the end of the calendar year and is finalising its 2026 budgets. No major base metals exploration programmes are planned, with capital allocation remaining focused on core assets.

Vella reiterated the company’s disciplined approach to growth and investment.

“We do not want to heavily dilute our business,” he said, adding that any future investments would need to meet strict return thresholds.

While higher lithium prices have improved cash-generation prospects, Vella said it was too early to consider changes to dividend policy.

“This is the time when Greenbushes really shines,” he said, highlighting the combination of rising prices, improving grades and expanding processing capacity.