Atlas could beat sales guidance
The emerging Pilbara miner shipped a total of 1.75 million tonnes of iron ore in the three months to December 31, up 10 per cent from the preceding three months.
Atlas Managing Director Ken Brinsden said the company was experiencing quite a strong market for low-grade product.
"It constitutes a really strong opportunity for Atlas to generate more cash from existing tonnes in the ground," Mr Brinsden told reporters.
The company said there was now a strong and repeatable market which would allow it to take advantage of the opportunity where it had excess crushing capacity, haulage capacity and excess shiploading capacity.
Higher iron ore prices and costs had made it a very attractive thing to do.
Chinese steel mills see the lower-grade product as a cheaper alternative following less supply from the Indian market.
Atlas also said it had been "very active" in discussions around Pilbara infrastructure as it worked to secure a rail solution and expand into its Horizon Two asset.
Atlas said iron ore prices recovered during the December quarter to an average of $US106 a tonne, up from an average of $US98 a tonne in the September quarter.
The price rise was a result of improvements in China's economy and a boost in sentiment as a result of a change in government there.
Atlas believes the iron ore price will trade around $US120 to $US140 a tonne over the medium to long-term.
UBS analyst Glyn Lawcock said it had been a better than expected quarter, particularly in terms of tonnes sold. "They have been benefiting from that low- value product," Mr Lawcock said. "But it all hangs on the wet season because this quarter can have a big impact on the final outcome."
Shares in Atlas Iron on Friday closed up 0.3 per cent at $1.57.
Frequently Asked Questions about this Article…
Possibly — the article says Atlas Iron could beat its full-year sales guidance after shipping more lower‑grade iron ore than expected in the December quarter. Management highlighted a strong market for low‑grade product that can generate extra cash from existing tonnes, though future results will depend on upcoming quarters and conditions.
Atlas shipped 1.75 million tonnes of iron ore in the three months to December 31, which was up 10% compared with the preceding three months.
Atlas said there was a strong and repeatable market for lower‑grade product — Chinese steel mills view it as a cheaper alternative after reduced supply from India — and the company had excess crushing, haulage and shiploading capacity to take advantage of the opportunity.
Iron ore prices recovered to an average of US$106 a tonne in the December quarter (up from US$98 in the September quarter). Atlas expects the iron ore price to trade around US$120 to US$140 a tonne over the medium to long term.
UBS analyst Glyn Lawcock warned the wet season can have a big impact on quarterly outcomes, so seasonal weather risk remains a key factor that could affect Atlas's ability to meet sales expectations.
Yes — Atlas said it has been 'very active' in discussions around Pilbara infrastructure as it works to secure a rail solution and expand into its Horizon Two asset, which could support future growth.
Management said selling more low‑grade product is a strong opportunity to generate additional cash from existing tonnes in the ground because higher iron ore prices and available crushing, haulage and shiploading capacity make it economically attractive.
The market reaction was modestly positive: Atlas Iron shares closed up 0.3% at $1.57 on the Friday following the update.
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