Koolan Island’s high-grade ores have tripled Mount Gibson Iron’s cash reserves to $442 million in the past year amid a volatile price climate.
Koolan Island’s high-grade ores have tripled Mount Gibson Iron’s cash reserves to $442 million in the past year amid a volatile price climate.
The remote Kimberley island miner moved 4.1 million tonnes of iron ore in the 2023-24 financial year, up 36 per cent on the previous year.
The value of those shipments spiked from $451 million in 2022-23 to $668 million in 2023-24.
Koolan Island’s 65.3 per cent grade ores attracted an average price of $US110/tonne.
Mount Gibson chief executive Peter Kerr said the company was maximising its cash flow from the mine while pursuing resources investment opportunities.
About $18.5 million has been invested into other commodity companies Mount Gibson considers may present opportunities.
Mount Gibson’s share price is down 40 per cent since January, which has prompted the Kimberley iron ore miner to buy back up to 5 per cent of its shares over the next year.
At 34 cents per share on Wednesday morning, that would represent a commitment of about $20 million.
“The board has approved the commencement of an on-market share buyback of up to five per cent of the company’s issued shares, reflecting confidence in the company’s outlook as it seeks to maximise cashflow from the remaining two-to-three-year life of the Koolan Island operation,” Mr Kerr said.
“This underlying value is not presently reflected in the company’s share price, making a buy-back an effective value-accretive capital management initiative.”
Unit cost for shipping Koolan Island ore decreased slightly to $74/t.
The company’s ore attracts a premium due to its higher grade, but the Koolan Island mine is likely to be depleted within the next three years.
Mining at the western end of the pit has wrapped up, with the focus of the final years of operation to shift to the eastern side.
Mount Gibson is hoping to sell up to 3 million tonnes of ore in the current financial year at an increased unit cost of $100/t.
That cost increase is largely due to capital work to reconfigure the pit’s haul ramp and remediate the footwall.
A tertiary crushing circuit is commissioning on site to process oversized material from the eastern end of the pit.
