Iron ore miner Mount Gibson Iron has declared its maiden interim dividend, despite production problems at its mines and a slump in interim profit.
The company has posted a net profit of $121.2 million for the half-year to December 2011, down from $140.0 million in the previous corresponding half.
Revenue was down 1.4 per cent to $376.9 million, as a result of a fall in tones sold being partly offset by higher iron ore prices.
The company’s ability to declare an interim dividend of two cents per share, costing $21 million, was aided by the build-up of cash reserves in recent years to $421 million.
One of the challenges faciug the company is using that money to acquire or develop new long-life assets.
Acting chief executive Jim Beyer said it was a “satisfactory result during a transition period of operational challenges at each of the mines”.
“We look forward to completion of the rail un-loader and shed facilities at the Geraldton Port during the coming half-year, which will allow Mount Gibson to ramp-up production and ship at the rate of 6mtpa through Geraldton.”
The operational problems coincided with dramatic boardroom changes, which included managing director Luke Tonkin and former chairman Craig Readhead resigning as directors.
Chairman Geoff Hill said the company was aiming to conclude the search for a new independent director soon, following the appointment of two independent directors during the half year.
At an operational level, the company said its Tallering Peak mine in the Mid West had a disappointing production performance for the half-year with decreased material movement and tonnes sold falling 29.2 per cent.
It said overall performance was hampered by labour skills shortages in key production areas.
This was further compounded by very tight working areas in advancing the cutback along with delays associated with pitwall areas requiring unplanned ground support.
Ore production at Koolan Island was down 16.6 per cent after Mount Gibson commenced owner mining in the September quarter.
The failure of an existing customer to furnish scheduled vessels early in the quarter prompted Mount Gibson to reduce activity at the site until an amicable agreement was negotiated with the customer .
Mine production was further restricted by delays to scheduled equipment delivery, the company said.
