On 22 October 2018, Mineral Resources Limited (ASX: MIN) announced that it has entered into a binding Sale and Purchase Agreement with BCI Minerals Limited to acquire the Kumina Iron Ore Project. Following the release of this news, the share price of the company increased by 1.193 percent as on 22 October 2018.
As per the release, MRL is planning to pay BCI minerals $27 million at the completion of the acquisition. Further, MRL will also pay $4 million to BCI after the first export of iron ore from the Kumina Project and an additional $4 million 12 months after the Company achieves first export. It is expected that the completion of the sale will occur before the end of 2018.
The Kumina Project is located in the West Pilbara region around 100km south of Karratha and as per the Managing Director Mr. Chris Ellison the location of the Kumina Project will help the Company to leverage its existing workforce and logistics supply chain in the Pilbara, with the ore to be exported out of Port Hedland.
During FY 2018, Mineral Resources delivered excellent results by focusing on growing the company’s core mining services business through innovation, profit share projects and commodity projects coupled with an industry-leading safety performance. The company earned a total revenue of $1,624.43 million in FY 2018. The total comprehensive income of the company was $272.14 million in FY 2018. The basic and diluted earnings per share of the company increased from 107.66 cents in FY 2017 to 145.30 cents in FY 2018. The current assets of the company decreased from $594.034 million in FY 2017 to $522.571 million in FY 2018. The net cash inflow from operating activities increased from $295.53 million in FY 2017 to $411.42 million in FY 2018. The total Mining Services & Processing revenue of the company increased by 58 percent to $1,065 in FY 2018 as compared to the figures of FY 2017. The Mining Services & Processing EBITDA increased by 32 percent to $260 million in FY 2018 as compared to the figures of last year. As a result of full-year production being achieved in new crushing contracts that were established part way through FY17, along with the full year impact of steady state operations at both Wodgina and Mt Marion, the total crushing and processing production volumes in FY 2018 increased compared to FY 2017. The total iron ore exports for FY 2018 were 9.3 million wet tonnes, which is less than the exports of FY 2017, mainly due to Yilgarn operations being suspended in the last quarter of FY 2018.
In the last six months, the share price of the company decreased by 16.17 percent from $18.0 to $15.090 as on 19 October 2018, traded at a PE level of 10.390x. MIN’s shares traded at $15.270 with a market capitalization of circa $2.83 billion as on 22 October 2018 (AEST 4:00 PM).
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