Atlas Iron will record a non-cash impairment of up to $100 million in its full-year results after rising costs led to an operating loss in its third quarter.
The iron ore miner says it will make an impairment of between $75 million and $100 million, but warns the final figure will not be known until it audits its books for reporting to market in August.
Atlas says it has been adversely affected by discounts applied to lower-grade iron ore and rising sea freight and fuel prices, although any impairment for the 12 months to June 30 reporting period will have no impact on cash flow or its debt obligations.
The company has increased its full cash cost guidance from $54 to $58 per wet metric tonne to between $58 and $59/wmt.
The production guidance remains unchanged at 9 million to 10 million tonnes of iron ore.
The news comes with the company in the midst of a $280 million takeover offer from Mineral Resources.
A small group of shareholders has reportedly threatened to vote against the deal, claiming the offer undervalues Atlas.
Atlas said it remained on track to export its first shipment of lithium direct shipping ore in June.
Shares in Atlas were up 3.1 per cent at 3.3 cents each at 12pm AEDT.
