Mount Gibson (ASX: MGX) banks on Koolan Island’s operational progress to drive iron ore sales in FY24

Highlights

• Mount Gibson produces and exports iron ore products
• In FY23, the company recorded an 821.7% rise in its EBITDA to AUD 224.10 million
• In 1HFY24, net profit after tax surged by 1,785% annually to AUD 138.7 million

Mount Gibson Iron Limited (ASX:MGX) is an ASX-listed firm which is focused on production and export of iron ore products. The company’s main two segments include Mid-West and Koolan Island.

In the financial year 2023 (FY23), the company witnessed over 217.2% growth in revenue to AUD 452.61 million and a whopping 821.7% rise in EBITDA to AUD 224.10 million. Net income during the reported period grew by 103% to AUD 5.18 million, while net cash jumped 22.6% YoY to AUD 139.7 million.

1HFY24 trading update

In the latest half (1HFY24), the company reported a 187% YoY increase in its revenue from ordinary activities to AUD 438.4 million, driven by record high-grade iron ore sales during the reported period. In 1HFY24, net profit after tax shot up by 1,785% to AUD 138.7 million, backed by continuous operational improvements and high sales from Koolan Island.

Outlook

In FY24, the company expects its high-grade iron ore sales to fall in the range of 3.8 million to 4.2 million wet metric tons from Koolan Island operations. The expected range of average cash operating costs is AUD 65- 70 per wet metric ton, before including capital projects and royalties.

The company is looking for investment opportunities which align with its aim of expanding and prolonging its operations. With this approach, the company has been seeking opportunities in bulk commodities and base metal industries of Australia.

The company has equity position in many junior resource development companies, which have around AUD 5 million of market value as of balance date.

Share performance of MGX

MGX shares closed 3.33% higher at AUD 0.465 apiece on 6 March 2024 with a market capitalization of AUD 546.69 million. Including today’s gain, MGX’s share price has declined by around 19.13% in the last one year and has recorded a rise of 17.72% in the last nine months.

The 52-week high of MGX is AUD 0.60, recorded on 6 March 2023, while the 52-week low is AUD 0.375, recorded on 1 June 2023.

MGX Daily Technical Chart, Source: REFINITIV

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 06 March 2024. The reference data in this report has been partly sourced from REFINITIV.

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