BC Iron posts record profit at Nullagine

BC Iron Ltd has lifted after posting record annual production at its Nullagine iron ore joint venture for the year to June.

BC Iron Ltd has lifted after posting record annual production at its Nullagine iron ore joint venture for the year to June. 

The iron ore miner's share price tacked on 2.5% to $3.28 at 1350 AEST following the announcement, which included the company's prediction that output will increase at the Pilbara operation by 20% in the current fiscal year.

Iron ore export production at Nullagine, which the iron ore miner operates with Fortescue Metals Group Ltd, is tipped to increase to between 5.8 million tonnes to 6.2 million tonnes in the current year to June.

For the 2012-13 fiscal year, production at the venture was 5.003 million wet metric tonnes, just clearing the 5wmt market guidance. 

The record came despite output in the fourth quarter taking a hit on unseasonal heavy rainfall, rising 12% from a low base to 1.598 wmt from the previous corresponding period.

BC Iron said production was expected to rise beyond 10mt in the September quarter.

BC Iron said it had been buoyed by the weakening Australian dollar, effective cost management and cash from Nullagine's record production, which saw the company pay down $US48 million in debt last month.

"The Nullagine operation continues to generate strong cashflows and has allowed us to repay an additional $US30 million of debt earlier than anticipated without impacting our stated aim of providing a dividend to shareholders," the group said.

Operating costs for the current fiscal year at Nullagine would be $46 to $50 per tonne, BC Iron said.

BC Iron increased its stake in Nullagaine to 75% in December after buying half of Fortescue's 50% stake, which saw it propelled into the S&P/ASX 300 Index.

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