29th May 2014 10:09
LONDON (Alliance News) - Strategic Minerals PLC Thursday said its pretax loss has widened significantly in 2013 as higher revenues were offset by increased production costs and a USD14.4 million impairment charge.
The magnetite iron-ore producer and exploration company with operations in the US said its pretax loss widened to USD29.0 million from USD7.9 million the previous year despite an increase in revenues to USD37.2 million from USD6.0 million during the period.
The company said its revenues increased as its exports vastly increased to 423,000 dry metric tonnes of iron ore from 48,000 the previous year. Strategic Minerals transported the iron ore through seven shipments which left the Port of Guaymas in Mexico during the period.
However, it said that the price of its raw materials and consumables used increased to USD35.2 million from USD4.5 million, its amortisation costs increased to USD8.6 million from USD1.3 million, and it was hit by a USD14.4 million impairment charge to the book value of an asset associated to its Cobre magnetite tailings operation in New Mexico.
The company also noted that the overall gross margin for the operations of USD2.0 million was impacted by a reduction in the realised price on export sales, which dropped to roughly USD85 per dry metric tonne from USD90 per dry metric tonne, which also hit production costs.
Strategic Minerals said it is well situated for growth in 2014, with cash and cash equivalents of USD1.4 million at April 30 and no debt or material obligations beyond its trading obligations.
The company added that its priority moving forward is to pursue domestic sales of magnetite iron ore from the Cobre project, to increase the company's portfolio of projects with additional near term, low capital cost opportunities and to reduce overheads to meet its targets.
Strategic Minerals shares were up 3.2% to 0.521 pence on Thursday.
By Tom McIvor; [email protected]; @TomMcIvor1
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