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MGX RESOURCES LIMITED Earnings Release 2005
65331_rns_2005-07-26_e1e19aa8-57a3-436c-b14d-41a6e9574cc9.pdf
Earnings Release
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Mount Gibson Iron Limited ABN 87 008 670 817
First Floor, 7 Havelock Street West Perth 6005, Western Australia
PO Box 55, West Perth WA 6872
Telephone: 61-8-9426-7500 Facsimile: 61-8-9485 2305 E-mail: [email protected]
VIA: WWW.ASX.ONLINE.COM
27 July 2005
No. Pages $= 2$
The Manager Company Announcements Australian Stock Exchange Limited Level 10, 20 Bond Street SYDNEY NSW 2000
MOUNT GIBSON IRON PRODUCES STRONG PROFITS FROM ITS FIRST SUBJECT: FULL YEAR OF OPERATIONS AT TALLERING PEAK
Mr Brian Johnson, Managing Director of Mount Gibson Iron Limited (ASX Code: "MGX"), today announced the Company's first full year of profits from its iron ore operations at Tallering Peak, for the year ended 30 June 2005.
| Net Profit after Tax | \$23.6 million |
|---|---|
| Net Profit before Tax | \$23.6 million |
| Operating Profit | \$28.9 million |
| Income | \$77.4 million |
| Iron Ore Sales | 1.84 million tonnes |
The above consolidated results are unaudited.
The benefit of the substantial price rise for iron ore on 1 April 2005 is reflected in operating profit of \$12.7 million from the Tallering Peak operations for the last quarter, on ore sales of 415,000 tonnes (approximately \$30 per tonne).
The Company expects to sell 2.5Mt of hematite ore in 2005 – 06, and 3.0Mt in 2006 – 07 from its Tallering Peak operation, through to at least December 2011.
With improving rail operating efficiency and a recent commitment by the track network owner to upgrade the track to cope with planned tonnages, commencement of mining of hematite at the Group's second mine at Mt Gibson will be brought forward to the first quarter of 2007.
Initial production at Mt Gibson will be at 1.5Mtpa taking total production to 4.5Mtpa within eighteen months.
Mr Johnson said the he was confident iron ore prices would stabilise around current levels with further concentration of ownership of resources within the three major producers, and the virtual elimination of volatile spot trading through recent regulatory actions by the Chinese Government.
Mount Gibson Iron is continuing to develop its marketing strategy to establish long term relations with financially sound mid-tier steel mills in China, and its immediate focus will be on further hematite exploration at Tallering Peak and Mt Gibson, and at two promising prospects at Koolanooka South and Walebing.
The Company's objective is to establish sufficient resources in the MidWest region to maintain 4.5Mtpa of hematite sales for at least ten vears, from early 2007.
To support this level of export, a second ore storage shed will be constructed at the port over the next six to nine months.
The Geraldton Port Authority is expected to continue to make constructive moves to reduce congestion at their bulk cargo berth to minimise shipping delays and associated demurrage charges.
Mr Johnson said that the Company's hematite operations are expected to settle into a pattern of reasonable predictability of production and profits.
The strong cash flow being generated will allow the Group to move with confidence to its next phase of development, being the establishment of the 5.0Mtpa Extension Hill magnetite mine with Chinese partners, and the production of 2.5Mtpa of iron pellets in China in its own right.
The quarterly report to 30 June 2005 will be released on 29 July 2005.
Yours sincerely. MOUNT GIBSON IRON LIMITED
50
Angela Dent Company Secretary
Enquiries:
Mr Brian Johnson or Managing Director Telephone: 61 8 9426-7500 Email: [email protected]
Mr Alan Rule Finance Director