Atlantic chairman and managing director Michael Minosora has predicted a doubling in production volumes this month, as the vanadium and iron ore miner moves toward breakeven on its operating cash flow.
Mr Minosora said he anticipated operating cash flow breakeven by the first quarter of next year, and cash flow breakeven after financing costs within the next three to nine months.
The company’s improved financial outlook is based upon a rapid increase in ferrovanadium production and ongoing iron ore shipments.
Mr Minosora was commenting after yesterday’s release of a special purpose financial report for its subsidiary Atlantic Vanadium Holdings, which owns Midwest Vanadium, the owner of the Windimurra vanadium project.
The financial report included a qualified opinion from the company’s auditor, Ernst & Young, which Mr Minosora said was similar to what had been published in earlier reports.
The company’s production of ferrovanadium has risen from negligible levels in July to 106 tonnes in November, after a number of operational issues at its process plant were addressed.
Mr Minosora said production would increase to 200-300t in December and 250-350t in January.
He anticipates a steady increase in monthly production to 500t by the middle of the 2014 calendar year.
Ernst & Young was more cautious in its audit report, however.
"As the production assumptions are impacted by the effectiveness of process improvements to the Windimurra vanadium project and the rate at which the plant can be ramped up to nameplate production levels, which are currently uncertain, we are unable to obtain sufficient appropriate audit evidence to assess the reasonableness of the director's production assumptions,” it said.
Mr Minosora said that, with good progress at its operations, he expects the company will be readily able to raise further funding if required.
Atlantic has lined up high-interest debt funding for Midwest Vanadium from its biggest shareholder, Droxford International, on several occasions this year.
Atlantic suspended its shares from trading on the ASX last week pending the appointment of new directors.
Its shares last traded at 19 cents.
