Atlas Iron (AGO) shares remain suspended, despite the company re-opening its Mount Webber mine, meaning all three of its Pilbara iron ore mines are back in operation less than three months after shutting them.
Atlas suspended all mining and trading in its shares in April, when it was losing money and the iron ore price plunged to decade lows under $US50 a tonne.
It then responded by striking a profit sharing, cost cutting deal with its contractors after talks with creditors holding its $US270 million ($A353.24 million) in debt.
The shares remain suspended at 12 cents.
Atlas chief executive David Flanagan said in a statement to the ASX yesterday that Atlas’s lower cost base of a $US50 a tonne breakeven price would underpin strong cash flow generation and a more sustainable business.
The statement was an update, but with a fund raising underway, it was also way of trying to encourage support among existing shareholders for the raising.
Atlas shareholders last week supported a company saving capital raising that seeks to raise $180 million at five cents a share.
The raising will mean significant dilution for current shareholders, more than quadrupling the number of shares on issue.
Atlas’ breakeven price was estimated at a $US60 a tonne iron ore price when the steelmaking commodity dived earlier in the year.
Global iron ore prices are now close to $US59 a tonne, retreating from the recent high of more than $US64 a tonne last month.
“With Mount Webber mining operations now back underway, Atlas is on track to grow production over the remainder of 2015 with significantly improved margins compared to operations pre-suspension, thanks in large part to the support of our key contractors and suppliers,” Mr Flanagan said in yesterday’s statement.
The company said the Mount Webber mine would make a meaningful contribution to a target production rate of 14 to 15 million tonnes in 2015-16.
And Atlas’s campaign for its share issue wasn’t helped on Thursday night with the spot price of iron ore slumping 6% to $US55.63 a tonne – that’s a loss of more than 8% in the past couple of days.
