With the announcement of tracking back of its mining rate at Mt Webber to ~7 mtpa with effect from late July 2018, Atlas Iron Limited (ASX: AGO) was seen to be trading flat on June 29, 2018. The group in June last year announced a decision to increase production at its Mt Webber mine from 7 to 9 mtpa, with the incremental production to be processed at the Company’s recommissioned Mt Dove site (ASX announcement dated 21 June 2017).
AGO now highlights that tons processed at Mt Dove have a higher C1 Cash Cost than tons processed at Mt Webber due to higher haulage and rehandling costs. In light of challenging market conditions, Atlas will suspend iron ore processing at Mt Dove and reduce its mining rate at Mt Webber to ~7 mtpa from next month.
These changes will not affect existing lithium DSO processing activities underway at Mt Dove. Atlas is constantly monitoring market conditions and will seek to ramp up iron ore production with a short lead-time if economics permit. FY2018 guidance remains as previously announced (as per ASX announcement dated 17 May 2018). Atlas expects to issue production and cost guidance for FY2019 in late August 2018.
Atlas refers to its recent financial update (ASX announcement dated 17 May 2018). Subsequent to that Atlas recorded an average realized sale price of A$60/wmt and Full Cash Costs of A$61/wmt on volume of 0.8 million wmt for the month of May 2018.
AGO advises that it transferred all funds held in reserve to cash at hand prior to the reserve account expiry date of 30 June 2018. Earlier this month, the Company’s information technology systems were disrupted by a security breach causing some data corruption.
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