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Mount Gibson Announces Net Profit Result for 2018-19 Financial Year

Mining News - Published on Fri, 23 Aug 2019

Image Source: SteelGuru
Mr Peter Kerr CEO of Mount Gibson said that Mount Gibson has delivered a robust financial result during a year of significant operational transition, with net profit after tax rising to USD 133.4 million, comprising a solid profit before tax from all sites of USD 70.5 million plus the recognition of previously impaired deferred tax assets. Our strong result came as we transitioned from mining operations in the Mid-West to our flagship high grade Koolan Island mine in the Kimberley region, aided by improved iron ore prices and reflecting a firm focus on safety, operational and financial discipline. We also capitalised on improved conditions by commencing a program of opportunistic sales of stockpiled low grade material from the Extension Hill mine site which has again extended the life and financial returns of our Mid-West business. It is therefore very pleasing to reflect this financial performance in the declaration of a fully franked final dividend for the 2018/19 financial year of four cents per share. With a robust balance sheet and our high grade Koolan Island mine now ramping up, Mount Gibson is well placed to generate strong financial returns.

Key Points

1. Total iron ore sales of 3.2 million wet metric tonnes (Mwmt), comprising 2.93 Mwmt of direct-shipping ore (DSO) and 0.24 Mwmt of stockpiled low grade material (2017/18: 3.6 Mwmt).

2. Profit before tax from all operations of $70.5 million (2017/18: $34.8 million before insurance settlement proceeds).

3. Net profit after tax of $133.4 million (2017/18: $99.lm) after recognition of deferred tax assets totalling $62.9 million.

4. Cash, term deposits and liquid investments of $384.5 million at 30 June 2019.

5. Operating cashflow of $59.4 million (2017/18: $34.9 million before insurance settlement) and interest income of $11.6 million.

6. Successful redevelopment of the Koolan Island high grade iron ore operation, with commercial production achieved in the June quarter following development expenditure of $109.1 million during the year, and $17.1 million of associated plant and equipment purchases.

7. Continuation of the Mid-West business through opportunistic sales of stockpiled low grade material from Extension Hill. In addition, the right has been earned to a future income stream based on third party Mid-West rail volumes, capped at approximately $35 million.

8. Declaration of a fully franked final dividend for 2018/19 of 4.0 cents per share, payable either in cash or shares to eligible shareholders through the Company's Dividend Reinvestment Plan.

9. Sales guidance for 2019/20 of 3.7-4.0 Mwmt at an all-in group cash cost* of $70-75/wmt FOB (US$49-53/wmt at A$1.00/US$0.70), providing attractive margins for the Company's high grade Koolan Island iron ore products. Cash costs at Koolan Island are projected to progressively decline over the mine life in line with the mine schedule as the strip ratio reduces each year.

All-in group cash costs are reported FOB and indude all operating, capital, royalties and corporate costs.

Source :

Posted By : Sanju Moirangthem on Fri, 23 Aug 2019
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