PERTH (miningweekly.com) – ASX-listed Mount Gibson Iron has swung into the red during the six months ended December, with the miner reporting a net loss after tax of A$869.8-million, compared with a net profit of A$78.3-million in the first half of 2014.

The net loss comes after Mount Gibson previously flagged a non-cash impairment charge of A$946.3-million, which came on the back of the declining market conditions, as well as recent development at Mount Gibson’s Koolan Island project, which was idled in December last year.

“The December half was a difficult and disappointing period of transition for Mount Gibson, marked by extremely challenging market conditions combined with the failure of the main pit seawall at Koolan Island, which necessitated the substantial non-cash impairment reported today,” said CEO Jim Beyer.

He noted, however, that the company responded quickly and diligently to the changed circumstances by reducing costs, preserving capital and restructuring the business to meet requirements.

“This ongoing focus on preserving value will continue to deliver benefits in the months ahead,” Beyer added.

Ore sales for the interim period reached 3.1-million tonnes, down on the 5.1-million tonnes reported in the first half of 2014, and resulting in revenue declining from A$509.5-million to A$188.9-million.

Underlying gross profits, before the impairment charges, were reported at A$2.7-million, compared with the A$121.1-million reported in the previous corresponding period.

Beyer said that the declining gross profit reflected the significant decline in iron-ore prices during the half-year, as well as the impact of the Koolan Island issues.

Evaluation of options for the Koolan Island main pit seawall were under way, and completion had been targeted for the second half of 2015.

Mount Gibson earlier this week increased its sales guidance for the 2015 financial year by 200 000 t, to between 5-million and 5.4-million tonnes, after securing additional rail haulage from its Extension Hill mine, in the Mid West.