Ann: MGX agrees A$86 million property damage insurance settlement-MGX.AX, page-54

From the Australian

Mount Gibson Iron will step up its hunt for acquisitions after an insurance settlement lifted its cash holdings to just under $430 million.

The Perth-based company yesterday announced it had accepted a settlement of $86m from its insurers over the seawall collapse that forced the early closure of its Koolan Island mine off Western Australia’s north coast.

The payment adds to an already healthy cash balance inside Mount Gibson at a time when many asset values remain well down from their boom-time highs.

Mount Gibson chief executive Jim Beyer told The Australian that while the board was unified in its plan to use the cash for acquisitions, the company would also assess whether to repair and restart Koolan Island or return some of the cash back to shareholders.

“The board is unanimous in its drive for us to look at opportunities and use that cash to find new opportunities in the resource space,” he said.

“We’ve got a board that’s fully supportive, we’ve got large shareholders represented on our board, so keeping communication with those people is important for us.”

The company is looking at potential opportunities in copper, zinc and other base metals, but Mr Beyer said the company was not beholden to any particular commodity and would not rush into any deal.

“Given the flat state of the market there’s no rush,” he said.

“The best investment opportunity anyone has made in the last couple of years was not to invest.”