IGO has announced it will record a non-cash impairment of A$275m-A$295m in its FY24 results. The impairment relates to the carrying value of its exploration assets, primarily, Sliver Knight and Mt Goode. IGO has now taken +A$1.4b in impairments over the past two years relating to the Western Areas acquisition and nickel exploration. We do not incorporate a development of either these assets in our base case forecasts for IGO. The impairment follows a comprehensive review of the Exploration Business, which is ongoing. We note that IGO retains an exploration equity portfolio with a market value of ~A$35m. The pending closure of Nickel West is unlikely to impact IGO, as the offtake agreement with BHP expires at the end of 2024 and Forrestania is set to close in the next few months. We are reiterating our BUY rating on IGO but lower our price target 4% to A$7.70 due to recent declines in spot lithium prices.
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