Mount Gibson Iron has reported a positive restart to production at the Koolan Island operation in Western Australia, marking a “key transition period” for the company.
The June quarter involved Mount Gibson turning its attention to Koolan Island as the company’s long-term source of production and revenue, with direct shipping ore commencing from the site in April.
Koolan Island returned high grade sales of 400,000 wet metric tonnes in the June quarter for Mt Gibson, with a further 100,000 wet metric tonnes shipped in early July.
Shipping rates from the site have increased to three to four Panamax shipments, or 200,000 to 300,000 wet metric tonnes per month.
Mount Gibson chief executive officer Peter Kerr said activity at Koolan Island had established the company as “Australia’s highest-grade producer of direct shipping hematite iron ore.”
“As volumes from Koolan Island continue to build, Mount Gibson is capitalising on buoyant iron ore prices which many commentators believe could continue for an extended period,” he said.
The positive conditions of the iron ore market has also allowed Mount Gibson to monetise some of the remnant lower grade stockpiles at its Extension Hill operations in the Mid West region.
“We look forward to a good start to the new financial year as Koolan Island’s production and cashflow builds, enabling the company to create further returns to its shareholders,” Kerr said.
The ramp up at Koolan Island highlights a strong financial year for Mount Gibson, which achieved sales of high-grade direct shipping ore in line with its guidance, totalling 2.9 million wet metric tonnes.
This coincided with low grade sales from its Mid West operations for total annual sales of 3.2 million wet metric tonnes and revenue of $240 million (free on board).
Mount Gibson’s Extension Hill operation has been reinvigorated thanks to renewed market interest in lower grade material, as the company commenced shipments of previously uneconomic stockpiled material in early June.
The company reported that shipments of the stockpiled material were expected to continue to the December quarter this year, with additional sales dependent upon iron ore prices at the time.