Gindalbie writes down Karara

Iron ore explorer Gindalbie Metals has detailed a $586 million loss for the financial year, which was previously flagged on the back of a write-down of its 48 per cent stake in the Karara project.

“The investment in Karara is carried at nil due to Gindalbie recording an impairment loss of $592 million,” Gindalbie said in a report.

Gindalbie said a loan to Karara Mining of $39 million was also written off.

“The directors of Gindalbie have identified inherent uncertainties regarding the potential future funding requirements of Karara,” the company said in the report.

In August, Gindalbie flagged a $640 million hit to its investment in Karara Mining after it completed a review of its assets.

The company cited capacity restrictions, a lower than forecast iron ore price and a higher than expected Australian dollar as key factors behind the project’s impairment.

Karara had invested more than $1 billion in the project, including a dedicated 16mtpa export facility at Geraldton port, utilities connections and an 85 kilometre rail line.

Gindalbie’s share price closed 17.9 per cent lower at 3.2 cents per share.