PERTH (miningweekly.com) – Iron-ore junior Mount Gibson Iron has increased its sales for the three months to June 30, while continuing its focus on reducing operating costs.

Sales for the quarter rose to 1.7-million tonnes , compared with the 1.1-million tonnes sold in the previous quarter, while iron-ore sales for the full year reached 5.8-million tonnes, generating revenue of A$325-million.

Sales revenue for the June quarter reached A$76-million, incorporating an average realised Extension Hill free-on-board (FOB) fines price of $38/t, compared with the $47/t achieved in the previous quarter.

“The 2015 financial year was clearly a very challenging and difficult one for Mount Gibson, given the large fall in iron-ore prices and the flow-on impacts of the seawall failure at Koolan Island.

“However, the benefits of the decisive and ongoing cost reduction and business optimisation initiatives implemented by the company have begun to materialise, as evidenced by an improved operating performance and an increase in our cash reserves in the June quarter,” said Mount Gibson CEO Jim Beyer.

During the quarter under review, organisational restructuring saw head office cash costs reduced by around 20% to A$1.2-million a month in June, with a further A$1-million a month being targeted.

All-in site cash costs at Extension Hill were reduced to A$44/t FOB in the June quarter, with an average of A$47/t achieved for the second half of 2015.

“The response to the changed circumstances has been critical to ensure we maintain our strong financial position and preserve our flexibility to adapt to the difficult conditions.

“This flexibility is extremely important as we pursue improved returns on all of our financial and operational assets while investigating new resource development opportunities, as well as the proposed Koolan Island logistics base, in volatile market conditions,” said Beyer.

At the end of the quarter, Mount Gibson had some A$334-million in cash and term deposits at hand.