Atlas narrows loss to A$114m, reports further cost savings

PERTH (miningweekly.com) – Despite reporting savings of A$15.21/t on its all-in cash (AIC) costs for the half-year ended December, compared with the previous corresponding period, the falling iron-ore price has continued to put pressure on Atlas Iron.

The company on Wednesday reported a statutory net loss after tax of A$114-million for the interim period, compared with the net loss A$1-billion in the previous corresponding period.

The 2014 figures included an impairment cost of A$834-million, and included restructuring costs, inventory write-downs and the de-recognition of deferred tax assets.

In the December 2015 interim period, Atlas reported a noncash impairment and inventory write-down of A$43.9-million.

While production in the six months remained steady at 6.9-million tonnes, revenue fell by 17.4%, compared with the previous corresponding period, to A$372-million, following the fall in iron-ore prices.

Ongoing cost saving initiatives have resulted in C1 cash costs falling from A$46.90/t to A$35.82/t, while AIC costs fell from A$67.29/t to A$52.08/t.

“The iron-ore price has continued to present a challenge but the company and its contractors have responded with further savings,” said Atlas MD David Flanagan.

“This is a big achievement that has created a leaner, more sustainable company. The debt restructure agreement announced in December will provide interest savings and reduce Atlas’s debt burden by nearly 50%.”

The miner in December inked agreements with more than 75% of its Term Loan B (TLB) lenders, and amended its existing syndicated facility agreement.

Under the two agreements, Atlas would make a pay down of the TLB loan of some $10-million and issue shares and options to the TLB lenders in exchange for the lenders retiring $132-million of debt.

The TLB lenders would hold a combined 70% of the company’s shares and options on issue, immediately post the restructure.