Mount Gibson books $82M loss, looks to overcome with gold for growth

It’s been a tough year for Mount Gibson Iron (ASX:MGX), with the company today reporting a net loss after tax of $82.2 million for FY25, a sharp reversal from the $6.4 million profit it posted a year earlier.

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The big drag? Non-cash impairment charges of $90.4M and the derecognition of deferred tax assets, both tied to weaker iron ore prices at its Koolan Island operation.

“Mount Gibson achieved a reasonable underlying performance in 2024/25, adding to its cash and investment reserves despite the required non-cash impairment charges,” chief executive officer Peter Kerr said.

Group sales revenue dropped to $330.5M, down from $667.7M in FY24, Mount Gibson also reported, with shipments falling to 2.6M wet metric tonnes (Mwmt) of high-grade iron ore (64.5% Fe), compared to 4.1Mwmt the year before.

The average realised price also took a hit, sliding to US$83 per dry tonne, down US$27. As a result, operating cash flow from Koolan Island plunged to $26.5M.

Despite the red ink, there were silver linings: Mount Gibson increased its cash and investments to $484.6M at June 30, up from $463M, thanks to insurance proceeds from a 2022 plant fire and some interest income.

There’s no dividend this time, but the company left the door open to resume its on-market buyback, which was paused in April while it worked on a new venture.

In July, Mount Gibson announced a $50M deal to acquire a 50% stake in the Central Tanami Gold Project in the Northern Territory from Northern Star Resources (ASX:NST). The company called the deal a “transformational step” towards building a new Australian precious metals business.

In guidance, Mount Gibson said it is targeting iron sales of 3.0 to 3.2Mwmt in FY26, at a reduced cost of $80 to $85 per tonne shipped FOB.

MGX has been trading down 6.4% at 36.5cps in afternoon trade.

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