Rain fails to dampen BC Iron sales

BC Iron has beaten iron ore sales guidance from its Nullagine joint venture for the March quarter despite lower than anticipated production in the period.

BC Iron, which owns 75 per cent of Nullagine with the balance held by Fortescue Metals Group, said iron ore sales from the operation totalled 1.22 million wet metric tonnes for the three months ending March.

This was up from sales target of 1.13M wmt.

The nearby Bonnie Downs weather station experienced its fourth largest rainfall for the month of January in the past 100 years, according to BC Iron.

The wet weather affected the company’s load and haul activities and it was forced to utilised ore stockpiles as supplemental crusher feed.

Total ore mined for the quarter was 0.95 million dry metric tonnes, down 22 per cent from the same time last year when the company mined 1.21M dmt.

The bad weather also increased waste mining and pushed up C1 cash costs for the March quarter to about $54/wmt.

Despite the higher costs, the company reaffirmed Nullagine’s C1 cash cost guidance of between $46 and $50/wmt for the financial year, but added this was likely to come in at the higher end of the range.

BC Iron said the average iron-ore price it achieved for the quarter was US$102/dmt.  However, the company noted that the price of iron ore had stabilised at the end of the quarter to between US$110 and US$120/dmt.

The company reaffirmed its sales guidance of between 5.8 and 6.2M wmt for the financial year ending June.

The company cut it capital expenditure budget to $15 million, down from $20 million, after deferring projects including resealing a private haul road and grade control drilling at Bonnie East.

At the end of the March quarter the company had $148 million in cash and $65 million in outstanding debt.

BC Iron said it had awarded Viento Group an overburden removal contract as part of the company’s mine optimisation plan.

Viento will remove about 250,000 cubic metres of overburden from BC Iron’s Outcamp 3 site.