ASX-listed Mount Gibson Iron has made a “strong” start to the new financial year, with record high-grade iron-ore sales of 1.3-million wet metric tonnes (wmt) from Koolan Island at an average shipped ore grade of 65.5% iron, for ore sales revenue of A$208-million, for the quarter ended September 30, says CEO Peter Kerr.

This has resulted in significant positive cashflow and rapid growth in cash and investment reserves for the quarter.

Cashflow of A$124-million for the September quarter comprised operating cashflow of A$115-million from Koolan Island plus cashflow from the Mid-West business of A$1-million, cash proceeds from the Mid-West asset divestment to Fenix Resources of A$10-million, interest and dividend income of A$4-million and corporate, administration and exploration costs of A$6-million.

Cash operating costs of A$56/wmt sold (before royalties) at Koolan Island for the quarter provided the operation with a cashflow margin of about A$86/wmt sold.

Mount Gibson significantly increased cash and investment reserves of A$257-million at quarter-end, excluding the value of the company’s share and option holdings in Fenix Resources, compared with A$162-million at the end of June.

Full-year 2024 guidance confirmed for high-grade iron-ore sales of 3.8-million wet metric tonnes to 4.2-million wet metric tonnes at an average unit cash operating cost of A$65/wmt free on board before royalties to A$70/wmt free on board before royalties.

It is currently expected that the rock fall incurred on the Koolan Island main pit footwall in August can be remediated with previously used geotechnical techniques, with limited impact on the mine plan.

Further assessment will occur as the remediation works are undertaken.

Evian Delfabbro was appointed an independent nonexecutive director, succeeding Russell Barwick who stepped down after almost 12 years’ board service.

Mount Gibson had total ore reserves of 12.4-million tonnes grading 65.2% iron within total mineral resources of 41.5-million tonnes grading 63.3% iron, all at Koolan Island.

“We completed 18 shipments in the quarter, lifting sales in the period above 1.3-million wet metric tonnes, and with iron-ore prices for high-grade ores remaining well supported, the company expects to continue building its cash reserves and its capacity for investment in new resources investment opportunities.

“We also look forward to benefiting from our ongoing exposure to expected growth in bulk commodity exports from the Mid-West region through the recent consolidation of our former Mid-West assets with those of Fenix Resources, in which Mount Gibson is now the largest shareholder,” Kerr indicates.