Ann: June 2017 Quarterly Activities Report, page-74

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mikejoho

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21/07/17

17:43

Post #: 26012019
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Originally posted by Richie2013 ↑

Atlas Iron generates cash in June despite steep discount

Once perilously debt-laden Atlas Iron is within reach of a net cash position after generating $9 million cash from its operations in the June quarter in the face of a steep decline in the price it receives for its lower grade iron ore.
The Pilbara miner received an average price of just $55 a tonne for its iron ore in the three months to June 30, down 11 per cent from $62 per tonne in the March quarter, as the spread between the prices paid for higher and lower grade iron ore widened.
The discount on lower grade ore has swelled this year as steel mills in China favour higher grade iron ore to ensure more efficient and less carbon-intensive production.
Mr Lawrenson said the discount had improved since the end of the quarter but it remained unclear whether it was a cyclical or a structural change.
"We are in the third quarter now of seeing that discount shift from a traditional value in use discount," Mr Lawrenson said.
"Is that a trend? We are not sure yet and we would have to adjust to it if it becomes the new norm.
"But I still believe that we will get back to an arithmetically derived discount for value in use ... I think logic will take it back in due course."
Atlas ended the 2017 financial year with $81 million cash, plus another $20 million in a reserve account mandated by its lenders after a company-saving debt for equity deal in 2015.
During the year Atlas knocked its remaining Term Loan B debt from $182 million to $103 million, bringing the formerly perilously debt-laden company closer to a net cash position. The debt is US dollar denominated but Atlas reports it in Australian dollars.
Atlas was helped by a $4 reduction in its costs to $52 per tonne as the upside it shares with its contractors under a profit sharing deal reduced due to the lower iron ore price.
Mr Lawrenson said the decision to delay the development of Atlas' Corunna mine in June in favour of a low capital expansion at Mt Webber would help the company respond with more flexibility to volatile iron ore prices but Corunna would be needed longer-term to offset declining production.
"We are very mindful of the mine life of the whole operation and Mt Webber is not going to be our final play," he said.
"So we have to get Corunna going again it is just a question of when we decide we are going to kick it off and actually start production then."

Read more: http://www.copyright link/business/mining/iron-ore/atlas-iron-generates-cash-in-june-despite-steep-discount-20170720-gxfnt3#ixzz4nRsVJZOG

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For those of you in the know....what sort of lead time would be involved between the decision made to go ahead with Corunna ---> to revenue received from shipment?

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Ann: June 2017 Quarterly Activities Report, page-74

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