Metro Mining (ASX:MMI) continues to demonstrate the ‘turnaround’ in the company, driven by its derisking, output increasing, and restructuring strategies underway since the second half of 2021.
Yesterday (29 February 2024), the $136.69 million market capitalisation company reported its 2023 annual results, which highlighted record shipments of 4.6 million wet metric tonnes (WMT) of bauxite, up from 3.4 million WMT in 2022 — a 34% increase.
The record shipments translated to a 33% year-on-year increase in revenue over 2023 to $235.84 million. Metro’s cost of sales only rose by 6% despite ‘significant’ inflationary pressure driven by economies of scale.
Underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) improved by $43.3 million, from negative $24.8 million in 2022 to positive $18.5 million in 2023.
Metro says while this marks a ‘significant’ improvement in financial results compared to 2022, it still recorded a net accounting loss of $13.5 million.
In the first half of 2023, Metro delivered the final investment decision (FID) on its transformative expansion to almost double capacity to 7 million WMT of bauxite per annum, underpinned by a US$30 million debt facility from Nebari & Partners LLC.
The company was then able to steadily ramp up production during the year to reach 6 million WMT per annum rates by Q4 2023.
As part of its expansion plan, Metro secured a high-capacity offshore floating terminal through a joint venture (JV) with ALM Shipping and designed and procured a new high-capacity screen circuit, both of which will come on stream in Q2 2024.
When CEO and Managing Director Simon Wensley caught up with Mining.com.au in February this year (2024), he explained that everything the company was doing, and every piece of equipment it was putting in, had been designed to provide more operating days per year.
“The new screening system, for example, is specifically designed to work with wet, sticky material,” Wensley told this news service.
Due to northern Queensland’s seasonably wet environment — where Metro’s flagship Bauxite Hills Mine resides — the dry screening system currently in use for processing has proven insufficient for the company’s aspirations.
The expansion is timed with a ‘firm’ traded bauxite market, in which there were record imports into China for a second year in a row in 2023.
Metro’s production and shipment guidance for 2024 is set at 6.3 million to 6.8 million WMT, underpinned by firm offtake contracts.
Wensley says: “The positive 2023 results demonstrate the progress made on the journey to transform Metro into a sustainable and profitable business. We set 2023 as the transition year, in which we delivered a strong foundation to execute the final elements of our expansion in 2024.
I very much appreciate the support of our Metro team, our contractor partners, lenders, customers, community and shareholders on this journey.”
“The positive 2023 results demonstrate the progress made on the journey to transform Metro into a sustainable and profitable business”
Metro Mining is an independent bauxite producer and explorer, with its wholly owned Bauxite Hills Mine operating on the Weipa bauxite plateau about 95km north of Weipa, near the coast of the Skardon River.
Bauxite is the ore used to make aluminium, a critical and strong growth metal in the energy transition.
Write to Adam Drought at Mining.com.au
Images: Metro Mining
