Atlas capital raising falls short of target
Australian junior iron ore miner Atlas Iron has raised A$86 million ($64 million) from existing shareholders, contractors and new investors as part of its restructuring plan, it said on Tuesday July 20.
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The figure is short of its target of A$180 million ($134 million).
Md David Flanagan, however, said he was “delighted with the immense vote of confidence” in the company amid volatile iron ore prices, according to the statement,
“This raising will strengthen our balance sheet considerably, giving us a measure of further protection against iron ore price volatility and enable the company to take advantage of opportunities as they rise,” Flanagan said.
“When this is combined with our new, lower cost base, which we are continuing to optimise, I am confident Atlas has a bright future,” he added.
Iron ore prices have been on a rollercoaster ride over the past three months. Metal Bulletin’s 62% Fe iron ore index slumped to record low of $44.59 per tonne cfr China on July 8 after rebounding almost 40% since April. It stood at $52.30 per tonne cfr on July 20.
Atlas has restarted mining at all three iron ore mines in Western Australia’s Pilbara region – Wodgina, Abydos and Mt Webber – and it is set to reach a production rate of 14-15 million tpy by the end of this year.
The miner has previously said its forward pricing strategies, use of iron ore derivatives and weakening Australian dollar would provide some “insulation” against falls in iron ore prices.
Its break-even costs was at about $50 per tonne cfr China based on full cash costs.