- Mount Gibson Iron (MGX) reports lower cash and investments of $142 million in its quarterly report, down from the $250 million it finished at in the previous quarter
- The company said the reduction reflected the ongoing investment at Koolan Island, limited ore sales while the waste stripping and upper footwall programs continued, and the suspension of production at Shine
- Total ore sales of 0.3 milliom wet metric tonnes (Mwmt) were reported in the December quarter, comprising 0.1 Mwmt from Koolan Island and 0.2 Mwmt from Shine in the Mid-West
- MGX has completed an upgrade of the Koolan Island processing plant which will ensure the crushing circuit is capable of processing significantly increased high grade ore tonnages scheduled from this year onwards
- Shares are trading 5.56 per cent down today at 42.5 cents each
Mount Gibson Iron (MGX) reports lower cash and investments of $142 million in its quarterly report, down from the $250 million it finished at in the previous quarter.
The company said the reduction reflected the ongoing investment at Koolan Island, limited ore sales while the waste stripping and upper footwall programs continued, and the suspension of production at Shine.
Total ore sales of 0.3 million wet metric tonnes (Mwmt) were reported in the December quarter, comprising 0.1 Mwmt from Koolan Island and 0.2 Mwmt from Shine in the Mid-West.
Iron ore prices were volatile in the December quarter which reflects restrictions imposed in China in steel making
The December quarter average Platts 62 per cent Fe price was US$110/dmt compared with US$163/dmt in the preceding quarter. The price weakened to US$87/dmt in November before recovering to US$119/dmt at period end.
Operating cash outflow was $89 million which was lower than the previous quarter.
The company expects shipments and ore quality will rise from Koolan Island during the March and June quarter this year towards the Ore Reserve grade of 65 per cent Fe, with the sales target for Koolan Island for the 2021/22 financial year being 1.7 million wet metric tonnes.
MGX completed the upgrade of the Koolan Island processing plant last month. This will ensure the crushing circuit is capable of processing significantly increased high-grade ore tonnages scheduled from this year onwards.
Chief Executive Officer Peter Kerr said the results were to be expected.
“As previously indicated, production and sales were limited in the December quarter as we focused on the key operational investment programs at Koolan Island to prepare for rising high grade sales in the June half-year and thereafter,” he said.
“While this investment in Koolan Island and the ramp-down of the Shine operation in the Mid-West drew on our cash reserves as expected, we are now gearing up for substantial operational and financial improvements in the next two quarters and following years.”
MGX advises that a number of personnel have moved from Shine to Koolan island to alleviate COVID-19 shortages but it continues to be a significant challenge to operational execution.
Shares were trading 5.56 per cent down today at 42.5 cents each at 11.53 am AEDT.