In morning trade today, shares of diversified mining company, Independence Group NL (ASX: IGO), were soaring 3.5% higher following a positive third quarter update.
In an announcement to the ASX, Independence Group said its third quarter production was in-line with guidance with all mining operations performing strongly during the period.
At the low-cost Tropicana gold mine (where Independence Group has a 30% ownership interest), gold production was 122,953 ounces for the quarter entered 31 March 2015. This has pushed up its year-to-date total production to 380,495 ounces – at the higher end of previous guidance of 360,000 to 382,500 ounces.
Year-to-date production at the company's Long nickel operation stood at 7,860 tonnes at the end of the period, which was also at the higher end of its previous guidance range of 7,125 tonnes to 7,875 tonnes.
Additionally, Independence Group's Zinc and Copper operations at Jaguar were at the higher end of guidance.
Managing Director, Peter Bradford said, "All three operations are maintaining good and steady production and are expected to meet or better our guidance for the full year, which was revised upwards in our announcement on 18 February 2015."
Should you buy Independence Group shares?
Operationally, Independence Group has been on a strong run in recent years posting continued production growth more often than not. Today's announcement was no exception and bodes well for the group to post a strong profit result later in the year.
Up 33% in the past 12 months – compared to an 8% return from the S&P/ASX200 (Index: ^AXJO) (ASX: XJO) – shares in the company trade at a forecast price-earnings ratio of just 11.5 and dividend yield of 2.8% fully franked. Pleasingly, with low costs and a robust pricing environment, it is also growing its cash balance whilst simultaneously paying down debt.
Although investing in the resources sector is not for the risk-averse, those partial to trying their hand in this space should certainly find a spot for Independence Group on their watchlist.
