And they get another mention. Probably no new info to most but thought I'd post anyway for non subscribers. Bit of positive media attention can't hurt.
Apologies if this article has already been posted. Haven't been keeping up with the forums as much as I'd like.
Cashed up Atlas Iron reduces debt by $54 million
Atlas Iron has repaid $54 million in debt after ending December with $134 million in cash on hand.
Resurgent iron ore miner Atlas Iron could be debt-free by June after healthy iron ore prices powered it to its best quarterly performance since its company-saving restructure last May.
Atlas yesterday said it had repaid $54 million in debt after ending December with $134m in cash on hand.
Under the agreement struck with its lenders as part of its restructure, Atlas must use all cash on hand above $80m at the end of each quarter to pay back its debt. The latest sweep means Atlas’s term loan has fallen to $118m, down from the $180m it owed at the time of its restructure.
The miner is one of the most heavily leveraged to iron ore’s recovery, with its stock tripling from 0.9c in October to 2.7c yesterday on the back of the improved conditions in iron ore markets.
The share price gain has come despite ongoing heavy selling by several lenders who swapped big chunks of their outstanding loans for shares in Atlas.
With Atlas having locked in hedging contracts for many of its upcoming iron ore shipments, the miner could make similar inroads into its remaining debt balance at the end of the current quarter.
Another big debt repayment in the months ahead would help encourage the Atlas board to approve its proposed Corunna Downs iron ore development.
Corunna Downs is crucial in maintaining its production profile ahead of the looming closures of its ageing Wodgina and Abydos mines, but will cost Atlas $47m-$53m to develop. A development decision is due by the end of March.
The bulk of Corunna Downs’ capital expenditure is likely to fall into the second half, when Atlas could finally have more cash than debt to its name.
“Atlas is now on track to be in a net cash position by the middle of this year,” Atlas interim managing director Daniel Harris said in a statement.
“This markedly stronger balance sheet will help make Atlas more resilient and better-placed to capitalise on its opportunities, including the development of the Corunna Downs project.”
The reduction in the size of Atlas’s debt comes despite the movement in the Australian dollar in recent months. While that weakness improves the Australian-dollar price received by Atlas for the iron ore it sells, the benefit is cancelled out by the impact on its US dollar-denominated debt position.
Atlas late last year announced veteran mining executive Cliff Lawrenson as its new managing director.
He is now slated to start with the company on January 16, having brought the date forward from February 1.
AGO Price at posting:
3.3¢ Sentiment: Hold Disclosure: Held
