Atlas Iron outgoing MD David Flanagan
JOHANNESBURG (miningweekly.com) – Iron-ore miner Atlas Iron is on a sound footing for the future after having completed a debt restructuring plan and reporting “excellent” performance in the June quarter, said outgoing MD David Flanagan on Wednesday.
Atlas Iron shipped 3.7-million wet metric tonnes (wmt) in the three months ended June, down 3% on the March quarter’s production, putting the company’s full-year shipments in the mid-range of its guidance at 14.5-million wet metric tonnes.
Shipped tonnes were slightly lower than the prior quarter, owing to an unplanned six-day port outload shut in June, when the Utah Point ship loader was damaged while loading another customer’s vessels.
C1 cash costs were maintained at A$33/wmt free-on-board (FoB) in the June quarter, while C1 cash costs came in slightly below its A$35/wmt to A$38/wmt guidance at A$34.49/wmt FoB.
Atlas has reduced its term loan debt from $267-million to $135-million and extended the maturity date from December 2017 to April 2021. This reduced the company’s yearly cash interest expense by about 65%.
The company had A$81-million cash at hand on June 30, compared with A$88-million at the end of March.
“The business has achieved significant cost and debt reductions over a number of months and this is now leading to strong operating margins. We generated A$30-million from our operations over the quarter after interest payments and our contractor profit sharing obligations.
“It’s now about consolidating that improved performance and delivering value for shareholders,” said Flanagan, who will finish as MD of the company on August 5.
Atlas nonexecutive director Daniel Harris, who was until recently CEO and COO of Atlantic in Perth, has been appointed interim MD and CEO and will continue in this role until a permanent replacement is appointed. Thereafter, Harris will revert to being a nonexecutive director.