Photo by: Reuters
PERTH (miningweekly.com) – A significant impairment over the carrying value of magnetite miner Grange Resources’ Savage River asset, in Tasmania, has resulted in the company reporting a statutory after-tax loss of A$162.2-million for the half-year ended June.
The company reported noncash losses of A$186.5-million during the interim period, arising from an impairment of A$207.3-million on the carrying value of the Savage River project.
The impairment related to lower-than-expected iron-ore prices resulting from the recent changes in the supply and demand dynamics of the industry.
The losses were partially offset by a A$20.8-million profit from a deferred consideration obligation.
Underlying profit after tax for the half year reached A$24.4-million, compared with the A$9 000 reported in the 2013 corresponding period, on the back of revenues of A$129.7-million.
During the six months to June, Grange sold 981 174 t of iron-ore products, compared with the 768 492 t sold during the previous corresponding period, reflecting the access to higher-grade ore at the Savage River mine.
However, Grange was faced with lower average pellet prices during the period under review, which was consistent with the reduction in benchmark iron-ore prices.
Grange noted that with the soft market conditions, the company has made the strategic decision not to place a number of cargoes into a market driven by opportunistic bidders.
It was expected that the higher product stockpiles would be placed with long-term buyers during the third quarter of the year.