Mount Gibson’s iron ore sales plunge 47% in March quarter

Australia's Mount Gibson Iron shipped just 1.1 million wet metric tonnes (wmt) of iron ore during the March quarter, almost half the amount it sold a year earlier, the company said on Friday April 24.

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This was in line with Mount Gibson’s sale guidance of 4.8-5.2 million tonnes for the financial year of 2015, however, according to a filing with the Australian Securities Exchange on Friday.

Volumes were also down by 13% from 1.2 million wmt in the December quarter.

Limited mining operations commenced in the Acacia East pit at Koolan Island during the period, all other non-essential activities have been suspended since the failure of the main pit seawall in late November 2014, Mount Gibson said.

The company said its Extension Hill mine remained positive cash flow in the March quarter on strong lump sales, with reduced cash cost averaged A$47.80 ($37) per wmt during the period.

“Mount Gibson continued to focus on capital preservation and cost reduction initiatives in the March quarter as iron ore prices declined further to their lowest point since the global financial crisis,” ceo Jim Beyer said.

It has cut 67 positions or 19% of its total headcount during the March quarter, and the remaining Acacia East workforce on Koolan Island will be redundant in the June quarter.

The miner achieved an average realised price of $47 per dry metric tonne (dmt) on fob basis for its standard Extension Hill iron ore fines in the first quarter, compared with $60 per dmt in the previous quarter.

Total iron ore sales revenue for the March quarter totalled A$60 million ($46 million), down from A$72 million ($56 million) in October-December.

The March quarter average for Metal Bulletin’s 58% Fe Premium Index stood at $53.81 per tonne cfr, down 19% from the December quarter.

Last December, The miner mothballed its Koolan Island mine indefinitely following a flooding incident in the mine’s main pit. It expect to determine its preferred action on finalised technical evaluation and assessment in mid-2015.

As at March 31, Mount Gibson has A$324 million ($251 million) cash and term deposits.