Mount Gibson Iron has touted the June quarter as a “key transition period” thanks to the ramp up of its Koolan Island iron ore asset.
With Q2 now having come to a close, Mount Gibson Iron (ASX:MGX,OTC Pink:MTGRF) has touted the quarter as a “key transition period” thanks to the ramp-up of its Koolan Island iron ore asset.
In a quarterly report, the company described how Koolan Island became its primary longer term source of production and revenue, with the project making Mount Gibson Australia’s “highest grade producer of direct shipping hematite iron ore.”
“The ramp-up at Koolan Island contributed high grade ore sales of 0.4 million wet metric tonnes (Mwmt) in the quarter, resulting in full year direct shipping ore (DSO) sales for the company of 2.9 Mwmt, within guidance,” Mount Gibson CEO Peter Kerr said in a statement.
“As volumes from Koolan Island continue to build, Mount Gibson is capitalizing on buoyant iron ore prices, which many commentators believe could continue for an extended period. The positive conditions have also enabled us to monetize some of the remnant lower grade stockpiles at our Mid West business.”
The operation rebegan iron ore sales in April following two years of redevelopment and refurbishment work. Near the end of the month, a cargo ship with 72,000 wmt of hematite iron ore set sail for customers in China, marking the project’s first shipment since the work began.
Koolan Island operations froze in 2014 when a seawall fell apart and the asset’s main pit became flooded; Mount Gibson later approved redevelopment and production resumption at the project in April 2017.
Along with the 0.4 Mwmt sold from Koolan Island during the June quarter, an additional 0.1 Mwmt was shipped to customers in early July. According to Mount Gibson, shipping rates from the project are growing to 0.2 to 0.3 Mwmt per month.
The aforementioned 2.9 Mwmt in high-grade DSO sales for the 2018-2019 financial year fell in line with company guidance of 2.7 to 3.3 Mwmt, and, in combination with low grade sales from Mount Gibson’s other operations, brought in revenue of AU$240 million.
Mount Gibson’s stock price grew 0.54 percent on Monday (July 15) to close at AU$0.92 per share on the ASX.
As of 4:35 a.m. EDT, iron ore was up 0.77 percent and trading at US$121.18 per tonne.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.