Mount Gibson Iron Limited provided an update for its Koolan Island operations, where the shipping rate of high-grade (65% Fe) iron ore cargoes is expected to increase from the end of this month as crushing capacity rises.
Despite the significant flooding events on the mainland, Mount Gibson said mining activities in the Kimberley functioned as planned over the wet season, with approximately 1.1 million wet metric tonnes (Mwmt) of high-grade iron ore presently stored for processing when crushing capacity develops. Once crushed, this material has a current market worth of over $150 million.
Repairs to the crusher facility are progressing smoothly, with all major materials on-site and completion planned in two weeks. Nonetheless, crushing has continued satisfactorily in the unaffected plant areas, enough to support the temporary shipping schedule. A mobile crushing contractor was also created on-site to help with the enhanced crushing and shipping output requirements.
Mining production for the fiscal year 2022/23 (FY23) remains on track, with the waste-to-ore stripping ratio falling to an average of 1:1 in the current half-year, as expected. However, due to the negative effects of the recent Kimberley floods on mainland transport routes, Mount Gibson’s barging contractor was diverted by State Government emergency authorities for community supply purposes, resulting in some shipments being unavoidably delayed from the current half-year period into the next fiscal year.
Mount Gibson aims to ship about 0.6 Mwmt of high-quality iron ore in the March quarter and 1.0 Mwmt in the June quarter, for a total shipping tonnage of approximately 2.9 Mwmt in FY23. In the future, iron ore grades are expected to average 65% Fe, with Mount Gibson shipping at a rate of about 4 Mwmt per year, with more precise advice to be supplied in due course.
Iron ore prices continue to be strongly supported, with 62% Fe and 65% Fe fines products for delivery in China currently hovering around US$125 and US$141/dmt, respectively. Mount Gibson’s offtake agreements reflect the 65% Fe high-grade pricing and offer Koolan Island the ability to produce large near-term operating cashflows with the expected rise in shipping quantities.
