Mount Gibson Iron released results from its fourth quarter, stating that on track to meet its iron ore production targets.
Mount Gibson Iron (ASX:MGX,OTC Pink:MTGRF) released results from its fourth quarter, stating that on track to meet its iron ore production targets despite tropical cyclone Blake interrupting operations during January.
Highlights are as follows:
- Iron ore sales of 1.4 million wet metric tonnes (wmt) in the quarter, comprising 0.7 million wmt of high-grade direct shipping ore (DSO) from Koolan Island and 0.7 million wmt of low-grade material from Extension Hill in the Mid-West. Iron ore sales totalled 2.8 million wmt for the half year, comprising 1.4 Mwmt from each site.
- Quarterly sales revenue* of AU$106 million free on board (FOB) and AU$224 million FOB for the half.
- Group operating cashflow of AU$14 million for the quarter and AU$39 million for the half year. Operating cashflow at Koolan Island was impacted by the deferral of two shipments to 2020 following the previously-reported disruption in October caused by a tear to the primary overland conveyor belt. Repairs were completed in early November and normal shiploading operations resumed at that time.
- Cash and liquid investments of AU$398 million at December 31, 2019.
- Group unit cash costs* of AU$69 per wmt FOB for the quarter, and AU$72 per wmt for the half year, in line
with guidance. Koolan site cash costs were AU$84 per wmt for the quarter, above internal targets and reflecting the October shipping interruption, and Mid-West cash costs were on plan at AU$42 per wmt FOB.
- Mid-West low grade sales program extended to April 2020, with the potential for further extensions.
- Group sales guidance for 2019/20 increased ~30 percent to 4.8-5.3 million wmt at an unchanged all-in group cash cost of AU$70-75 per wmt FOB. This comprises Koolan Island sales of 2.7–3.0 million wmt (unchanged) at a site cash cost of AU$77-82 per wmt FOB reflecting performance to date, the waste stripping schedule and recent wet weather impacts, and Mid-West sales of 2.1-2.3million wmt at a site cash cost of AU$40-45 per wmt (unchanged).
Peter Kerr, CEO, commented:
Mount Gibson has reported another steady quarter of operating cashflows, in which shipments of high grade Koolan Island ores increased. Importantly, we achieved our target of four shipments per month from Koolan Island in both November and December, which underpinned our group operating cashflow of AU$14 million for the quarter. Our Mid-West low-grade sales program also achieved its target and has now been extended well into 2020, resulting in our group ore sales guidance increasing for the 2019/20 financial year.
Although cyclone-related heavy rainfall has interrupted mining operations at Koolan Island in January, a degree of wet season interruption is factored into long-range planning and ore sales guidance for Koolan Island remains unchanged for the current financial year. Mount Gibson is well placed to deliver on its production targets and benefit from continued positive iron ore market conditions