BC Iron reports narrowed losses in H1

PERTH (miningweekly.com) – Embattled iron-ore miner BC Iron has narrowed its underlying net loss after tax from the A$18.4-million reported in the six months ending 2014, to A$3.8-million, despite the significant decline in iron-ore prices.

The Nullagine joint venture (JV), in the Pilbara, sold 2.27-million tonnes in the six months under review, which was only slightly below the 2.33-million tonnes sold in the previous corresponding period.

However, revenues declined from A$133.3-million to A$115.8-million over the same period, as the average price for iron-ore declined from $82/t to $51/t.

The iron-ore prices resulted in BC Iron and its JV partner, Fortescue Metals, temporarily suspending direct shipping ore (DSO) operations at Nullagine in December, with the final shipment expected to occur in February.

The iron-ore prices also resulted in BC Iron reporting a A$40.1-million impairment in relation to the Nullagine stockpiles and the Koodaideri South royalty.

“It was clearly a challenging half-year period for BC Iron. The declining iron-ore price affected our financial results and ultimately led to the decision to temporarily suspend DSO operations at Nullagine,” said BC Iron MD Morgan Ball.

“Given the current iron-ore market and outlook, this decision was the correct one for our shareholders, but disappointing for our employees, contractors and stakeholders, particularly given the collaborative efforts to reduce costs over the past 12 months.”

Ball said that going forward, the company would have materially lower overheads.

“We are continuing to assess the potential for an ongoing low-grade operation at Nullagine and anticipate that the Iron Valley operation will continue generating positive cash flows for the company. We are also making strong progress with our optimisation work at the Buckland project and are assessing a modest greenfields exploration programme on a number of higher priority non-iron-ore targets.”