Mount Gibson first half profits rise 24% to $27.4m

West Perth-based Mount Gibson Iron Ltd has announced a net profit after tax for the first six months of the financial year of $27.4 million, a 24 per cent increase on the previous corresponding period.

Revenue was up 27 per cent to $69 million.

The full text of a company announcement is pasted below

Mount Gibson Iron Ltd is pleased to announce a net profit after tax of $27.4 million for the 6 months ended 31 December 2006, an increase of $26 million on the previous 6 months to the end of June 2006.

Ore mined increased 340 per cent whilst ore sold increased by 144 per cent compared with the 6 months ended 30 June 2006.

Mount Gibson's Managing Director, Luke Tonkin said "We are particularly pleased with the progress of the Company during the last 6 months in which a large number of strategic objectives have been realised. Mount Gibson has been able to demonstrate a significant increase in production from Tallering Peak in line with forecast 3 Mtpa rates, progressed Extension Hill Hematite to feasibility whilst demonstrating the project's potential to provide significant financial returns, divest in and receive payment for the Extension Hill Magnetite Project which would have diluted shareholders and exposed Mount Gibson to significant debt, and Mount Gibson hassuccessfully completed the acquisition of Aztec Resources Limited which provides Mount Gibson with a high quality asset that delivers an increase in production, increase in mine life, reduction in operating costs, significant exploration upside and mitigates the geographical and infrastructure risks of the Mid West".

Mr Tonkin also said "Mount Gibson has built a significant reserve base which will underpin our publicly released strategy of achieving 10 Mtpa production rates by 2010, delivering significant cash flows and earnings in the near term against a backdrop of strong iron ore prices. Strong cash flows and earnings creates the foundation for the future growth of the Company and ensures Mount Gibson is in a strong position to take advantage of any identified or presented accretive opportunities.

Over the next 6 months Mount Gibson will focus on consolidating production at Tallering Peak, establishing production from Koolan Island and continuing to prepare Extension Hill Hematite for production in 2009."