Iron Road Limited Provided December Quarter Update

Iron Concentrates Supplier, Iron Road Limited (ASX: IRD) has provided its December quarter update today. After providing the update, the share price of the company increased by 1.961 percent as on 25 January 2019.

While providing the update on Central Eyre Iron Project (CEIP), the company informed that it has initiated a new investor strategy that includes a less capital-intensive project start up approach. The company will aim on reducing the mine production target and cutting substantially both pre-strip volumes and life of mine strip ratio. As per the company’s announcement, efficiencies are being sought through a combination of truck and excavator and conveyor mining systems. 

By the end of January 2019, the company will release the outcomes and opportunities from the new mine plan. The downstream affects and project economic metrics are expected to be released later in the first quarter of 2019.

The company’s ‘grain first’ strategy contemplates the staged construction and commissioning of a globally competitive grain terminal and export facility at Cape Hardy. The strategy is expected to improve the resilience of the Eyre Peninsula grain industry. Various parties have expressed their interest in utilizing the port precinct, planned to be linked to a light industrial park situated at nearby Tumby Bay. Eyre Peninsula Co-operate Bulk Handling (EPCBH) is integral to the ‘grain first’ strategy. As per the company’s announcement, the plan for the staged ‘grain first’ development at the proposed Cape Hardy port is drawing interest and support.

During the quarter, the Company raised $1.21 million through a non-renounceable rights issue, which closed on 9 October 2018. The offer invited participation by all shareholders in the capital raising at an offer price of 7.5 cents per share. The proceeds from the capital raising will be used in the maintenance of the CEIP Mining Lease and cover ongoing corporate expenses.

As at 31 December 2018, the company had net cash used in operating activities of $1,105k and net cash flow from financing activities of $1,189k. At the end of the December quarter, the company had cash and cash equivalent of $493k. During the quarter, the company made payment of $725k for exploration & evaluation activities. The company paid $229k and $151k on staff costs and administration and corporate costs respectively.

For the year-end 30 June 2018, the company earned a revenue of $1,844. In FY 2018, the company incurred a loss of $3,253,530 with the Basic loss per share of 0.48 cents.  At the end of FY 2018, the company had current assets of $289,044 and total current liabilities of 5,795,924.

During the past one year, the company has yielded a negative return of 71.37% by decreasing from $0.185 on 25 January 2018 to $0.051 on 25 January 2019. In the past six months, the share price of the company decreased by 42.56%. IRD’s shares traded at $0.052 with a market capitalization of circa $35.38 million as on 25 January 2019.


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