Murchison Metals has narrowed its full year net loss after stronger iron ore prices boosted sales revenue, and has scaled back activities at its troubled Oakajee port project in the Mid West.
The company's net loss for the 12 months to June 30 was $16.6 million, compared to a net loss of $21.6 million for the previous financial year.
Murchison’s 50 per cent owned joint venture, Crossland Resources, which owns and operates the Jack Hills iron ore mine, delivered a net profit of $2.6 million, compared to a net loss of $8.6 million the previous year, on the back of an increase in sales revenue.
Murchison said the net loss reflected its focus on feasibility studies for Oakajee and an expansion of its Jack Hills mine - projects that are on rocky ground as its cash reserves dwindle and an April debt refinancing deadline approaches.
It invested a total of $70.2 million on the projects over FY2011; $26.4 million on Oakajee and $43.8 million on Jack Hills.
Murchison has conceded it does not have enough money to fund its share of the near $6 billion port, which is one of Australia's biggest planned infrastructure projects.
Murchison said it was scaling back spending and short-term work programs for Oakajee and the Jack Hills expansion, while a solution was being sought for various commercial woes.
The Perth-based company and its Japanese joint venture partner, Mitsubishi, have not been able to secure foundation customers for Oakajee and are evaluating several options to bring them on board.
Would-be Oakajee foundation customer Sinosteel in June mothballed its $2 billion Weld Range iron ore project in the Mid West region, casting a cloud over the future of planned port.
Murchison says options to secure customers range from revised tariff models to a broader restructure of the joint venture.
Premier Colin Barnett this week returned from a trip to China, where he encouraged Chinese involvement in Oakajee, but said the matter was still being debated.
Mr Barnett also said China was still unhappy about missing out on the original tender process for Oakajee.
Murchison managing director Greg Martin in July said the miner would consider all options to fund Oakajee, including selling the Jack Hills iron ore project.
"The strategic review is ongoing and Murchison is currently engaged in confidential and incomplete discussions with a number of parties," the company said on Wednesday in a statement.
"There can be no assurances that a transaction will emerge which is either capable of being recommended to shareholders or otherwise enacted by the company."
Shares in Murchison closed down 2.5 cents, or 4.59 per cent, at 52 cents - its lowest finish since January 30, 2009.
