Metro Mining (ASX:MMI) has dedicated the September quarter to delivering ‘record’ shipments and generating ‘strong’ EBITDA as it continues to ramp up its Bauxite Hills Mine in Queensland.
The $74.2 million market capitalisation company says it “stepped up” its supply chain to 5 million wet metric tonnes (WMT) per annum (pa) in August and September as part of its plan to achieve a 7 million WMT capacity expansion in 2024.
This achievement resulted in ‘record’ shipments of 1.6 million WMT during the September quarter.
Metro believes it can increase this output to the 6 million WMT rate in October after maintenance bed-levelling of the channel and the arrival of a new 90m barge at the end of September.
The company recorded an EBITDA of $16 million ($10/WMT operating margin) during the September quarter, an improvement on the previous quarter of $11.4 million ($9 million/WMT operating margin) despite more expensive small, geared vessels being used for incremental shipments.
This is due to flat bauxite prices over recent quarters.
Metro reports its equivalent delivered prices are continuing to rise, up 7% as contracts roll over.
Meanwhile, the company notes its offshore floating terminal (OFT), which represents a joint venture (JV) between Metro and Louis Dreyfus Armateurs and the ‘most significant’ element in Metro’s expansion plan, has arrived at a Chinese shipyard and has begun its refurbishment program.
This program was scheduled to take 6 to 8 weeks to complete at a cost of US$4 million.
Metro adds manufacturing for an apron and wobbler feeder is now underway and on schedule for installation over the December quarter and Q1 2024.
Metro Mining Managing Director and Chief Executive Officer (CEO) Simon Wensley says despite slight disadvantages, the company managed to turn in ‘concrete results’.
“It is very pleasing to see concrete results from the gradual implementation of our expansion, enabled by loading of smaller geared vessels from August and also coinciding with the strong market conditions. The operation will continue to ramp up to the 7Mtpa run rate targeted in Q2 2024, enabling more of the economies of scale to flow through to bolster margins.”
Metro Mining is a bauxite miner and explorer based in Brisbane, Queensland, that is actively expanding the capacity of its flagship Bauxite Hills Mine.
The project is located about 95km north of Weipa town in Cape York, North Queensland.
Metro Mining had $21.6 million cash at hand as of 30 September 2023, a $1.4 million increase from the previous quarter.
During the previous quarter, the company almost doubled its cash at hand through agreements with investors, as announced in July.
Write to Adam Drought at Mining.com.au
Images: Metro Mining
