Mount Gibson cautiously withdraws sales guidance

Mount Gibson Iron has withdrawn its sales and cost guidance for the 2020 financial year amid uncertainties surrounding the global COVID-19 situation.

Despite the withdrawal, the company has reported that ore production is expected to improve over the coming months to June.

Mount Gibson’s production at its flagship Koolan Island operation in the Kimberley region of Western Australia dropped in the March quarter to 545,000 wet metric tonnes, 29 per cent lower than in the preceding period.

The company sold one million tonnes of iron ore during the March quarter, including 440,000 tonnes of high-grade direct shipping ore (DSO) from Koolan Island and 590,000 tonnes of low-grade material from Extension Hill in the Mid West region.

Mount Gibson’s sales during the first nine months of the 2019-2020 financial year stood at 1.8 million wet tonnes from Koolan Island and 1.9 million wet tonnes from Extension Hill.

Mount Gibson’s Extension Hill operation has also been reinvigorated thanks to renewed market interest in lower grade material, as the company commenced shipments of previously uneconomic stockpiled material in early June last year.

The company said it had finalised sales arrangements for the Extension Hill to support the mine until at least the middle of this year, with further extensions to the program remaining uncertain at this time.

Since early March, when restrictions were imposed on mining operations in Western Australia to control the virus spread, Mount Gibson has continued its iron ore operations on Koolan Island and Extension Hill by implementing stringent safety measures, including pre-travel screening of the staff and extending rosters to minimise travel.

The increased travel and operating constraints have, however, resulted in additional costs, the company said.

Mount Gibson chief executive Peter Kerr said the company was well-placed financially to maintain steady production in the coming months, with production and sales expected to improve in the June quarter.

“Mount Gibson remains strong, stable and well positioned to weather the prevailing uncertain COVID-19 economic environment,” he said.

“Even with the recent weather and COVID-19 challenges, we were able to finish the quarter with solid cash and investment reserve,” he added.

Mount Gibson expects improved ore production and sales from Koolan Island in the June 2020 quarter, subject to there being no further interruptions related to COVID-19 requirements.

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