Mount Gibson Iron has geared up for the restart of the Koolan Island operation with a robust performance in the 2018 financial year.
The company’s results, released today, revealed total iron ore sales of 3.6 million wet metric tonnes, gross profit of $48.7 million and net profit of $99.1 million from continuing operations.
Each was a noticeable improvement on the previous financial year.
The company’s financials bode well following what company chief executive officer Jim Beyer called “a period of challenging market conditions and significant operational transition”.
Mount Gibson is going through a series of changes as it is prepares for high-grade production at Koolan Island, off the northern Kimberley coast, Western Australia.
It is also simultaneously winding down its Mid West operations, with the final stages of mining at Extension Hill’s Iron Hill deposit taking place.
Mount Gibson’s profits were up $12.2 million on the 2017 return of $36.5 million, a year-on-year (YoY) increase of just over one-third (33.4 per cent).
The YoY boost to net profit after tax was even higher for 2017–18, with the $99.1 million figure representing a massive 377 per cent increase over 2016–17’s $26.3 million posting.
Mount Gibson has attributed this to insurance settlement proceeds acquired in July 2017 from a claim related to a wall collapse at Koolan Island, which accounted for $64.3 million of this.
The company is nearing completion of a restart to operations on Koolan Island, which saw a mine closure in November 2014 following extensive flooding. Koolan Island hosts reserves of 21Mt (a 50 per cent increase on 2016–17), at 65.5 per cent grading. The mine’s mine life was also recently extended to 2023.
Its long-term aim is to grow profits through new acquisitions and developments while also reducing costs.
“With a robust balance sheet and our high-grade Koolan Island project advancing rapidly towards the scheduled commencement of ore sales in the March 2019 quarter, Mount Gibson is ideally placed to capitalise on the structural change in iron ore pricing in favour of higher quality products to generate strong cashflow and create additional value for shareholders well into the next decade,” said Beyer.