| The TEX Report Topics < Iron Ore > | |
| HOME >> Topics List >> January, 2006 >> 16 (Mon) |
| Current States Of Mount Gibson Iron's Development Projects |
| = Development stripping rate proposed to increase for Tallering Peak ore reserve |
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Australian iron ore supplier Mount Gibson Iron Limited (Managing Director: Luke Tonkin) announced an upgrade of the Tallering Peak ore reserve it is advancing in Western Australia as well as updates for the Extension Hill Magnetite Project. The Company has modified a profit after tax of $50 million previously anticipated for the year ending June 30, 2006 down to $37 million as at December 22, 2005. Further particulars follow below. [Tallering Peak Operations] Detailed mine schedules to exploit current ore reserve have recently been completed which indicate that development rates at Tallering Peak will need to be increased to sustain 3 million per annum (Mt/a) of ore production through to the end of mine life. An increased rate of development stripping will commence in January 2006 following the mobilization of additional hired mining equipment which will give the operation the capacity to load and haul annually 26 Mt of ore and waste over the next two years. Increased stripping in the first half of 2006 will impact cash flow with sustainable ore production of 3 Mt/a being achieved in the second half of 2006 rather than the first half due to: - Delay in delivery of 34 rail wagons from December 2005 to late April 2006; - Installation and commissioning of a crushing and screening plant with capacity of 3 Mt/a scheduled for late April 2006; and - Increased development stripping from January 2006 restricting access to ore in the first half of 2006. It is anticipated that hematite ore sales for the year ending June 30, 2006 will be approximately 2.1 Mt. [Extension Hill Magnetite Project] As regards the Extension Hill Magnetite Project which is underway, the feasibility study is scheduled for completion at the end of January 2006. The study will not be to a bankable level and further capital cost optimization will continue. The Shougang Group of China, which is Mount Gibson's proposed partner in the development of the Extension Hill mine, will have to undertake their review of the feasibility study until mid March 2006 and exercise their option to participate in the project. The delay to the completion of the study can be attributed to limited access to scarce technical and professional resources and an endeavor to contain cost increases on capital works due to the current resources boom in Western Australia. [Profit Forecast] The Company previously advised the Australian Stock Exchange that it anticipates a profit after tax of $50 million for the year ending June 30, 2006. According to the Company the first half's profit should be in the order of $21 million, however this will reduce to approximately $16 million for the second half due to higher operating costs at Tallering Peak. The revised expected after tax profit now amounting to $37 million for the year ending June 30, 2006 does not include any impact resulting from the implementation of the new International Financial Reporting Standards and assumes no increase in iron ore prices, according to Mount Gibson. |
| last modified : Thu 19 Jan, 2006 [11:23] |
