Iron ore price rise helps Atlas

A higher iron ore price has helped Atlas Iron post operating cash flow of $58 million in the December quarter, as the company maintained that it would reach a net cash position by the middle of the year.

The company’s iron ore fetched a price of $66 per wet tonne in the three months to December, up more than 22 per cent on the September quarter.

But cash costs were also up, by 10 per cent, to $55 thanks to higher freight rates and revenue based payments to contractors.

Shipments were down about 2.5 per cent from September, at 4 million tonnes.

Atlas managing director Cliff Lawrenson confirmed the company was on track to be in a net cash position by mid-year.

“Atlas capitalised on higher iron ore prices by shipping 4 million tonnes for the period and keeping C1 costs steady,” Mr Lawrenson said.

“This performance resulted in strong cash flow, which in turn enabled Atlas to strengthen its balance sheet by making a $A54m debt repayment in early January 2017.

“Atlas is well-positioned to continue this performance in the March 2017 quarter due to hedging contracts in place for many of this quarter’s shipments at prices equivalent to those realised in the December 2016 quarter.”

Former interim managing director Daniel Harris has returned to his previous role as a non-executive director, while company secretary Tony Walsh has resigned his directorship.

Shares in Atlas fell 4.2 per cent to 4.6 cents each at the close of trading.