MGX Resources (MGX) Q4 2024 TU earnings summary

Executive summary

• Achieved strong production and financial performance for FY24, with iron ore sales reaching 4.1 million wet metric tons at 65.3% Fe, near the upper end of guidance, despite a weaker June quarter due to lower iron ore prices and adverse provisional pricing adjustments.

• Ended the year with increased cash and investment reserves of $436 million, no bank borrowings, and a continued focus on safety improvements.

• Koolan Island operation achieved strong results, with steady June quarter production despite cash flow impacts from adverse provisional pricing adjustments.

• Company is positioned to pursue new investment opportunities.

Financial highlights

• Iron ore sales from Koolan Island rose over 20% sequentially to 0.9 million wet metric tons in the June quarter, with full year sales reaching 4.1 million tons.

• June quarter sales revenue was AUD 105 million FOB after AUD 29 million in adverse provisional pricing adjustments; full year ore sales revenue totaled AUD 670 million FOB.

• Operating cash flow for the June quarter was AUD 30 million before adjustments, reduced to AUD 1 million after; full year group cash flow was AUD 290 million before tax and working capital.

• Koolan Island cashflow for FY24 was AUD 284 million on AUD 670 million ore sales revenue and AUD 4 million other income.

• Cash and investment reserves increased by AUD 274 million over the year, ending at AUD 436 million.

Outlook and guidance

• FY25 shipping guidance is 2.7–3.0 million tons, lower than FY24, due to depletion of high-grade stockpiles and haul ramp repositioning; detailed guidance to be provided with full year results.

• September quarter shipping and cargo grades will be temporarily reduced due to ramp repositioning and remediation work.

• Company anticipates a non-cash accounting impairment for Koolan Island as at 30 June 2024, bringing forward depreciation and amortisation.