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QUARTERLY REPORT MOUNT GIBSON MINING 01032 Mount Gibson Iron MOUNT GIBSON IRON LIMITED REPORT FOR THE QUARTER ENDED 31 DECEMBER 2020 22 January 2021 Key Points ( all currency in Australian dollars unless stated otherwise ) : • Quarterly iron ore sales of 0.9 million wet metric tonnes ( Mwmt ) , comprising 0.4 Mwmt of Koolan Island fines and 0.5 Mwmt of low - grade material from the Mid - West operations . Sales for the half year ended 31 December 2020 totalled 2.3 Mwmt , consistent with guidance . Group cashflow for the quarter totalled $ 62 million before investment at Koolan Island of $ 40 million in scheduled advanced overburden stripping and $ 2 million in capital projects , for group net cashflow of $ 20 million . Group net cashflow for the half year totalled $ 52 million . Group unit cash costs of $ 56 / wmt Free on Board ( FOB ) for the quarter , before Koolan advanced overburden stripping and capital projects . Koolan site cash costs were $ 65 / wmt FOB and Mid - West cash costs were $ 40 / wmt FOB . Cash and liquid investments at 31 December 2020 of $ 436 million , with no borrowings . Strong iron ore prices enabled the Koolan Island operation to produce significantly higher than planned cashflows despite the constraints of the scheduled overburden stripping program , a rockfall on the Main Pit footwall reported in November which will require additional ground support measures , and heavy wet season rains in December . The successful Mid - West low - grade sales program concluded at the end of the quarter when available material was fully depleted . The program has yielded sales of 4.1 Mwmt and cashflow of $ 30 million since June 2019. Rehabilitation and closure activities are now underway at Extension Hill . Development activities on the Shine Iron Ore Project in the Mid - West have accelerated with initial site works now commenced and shipments targeted for early in the September quarter . The Shine Project is an attractive development proposition in the current iron ore pricing environment . Mount Gibson is targeting to substantially complete the Koolan Island overburden stripping phase and Shine development in the next six months . As previously disclosed , total ore sales during this period will be lower than for the first half but are expected to be within annual guidance , before increasing significantly thereafter , subject to successful implementation of the Koolan Main Pit footwall support measures . Cost guidance will be updated with the Company's half - year financials . Note : Cashflow and cost information is unaudited , and subject to period - end adjustments . Cash costs are reported FOB and include operating costs , royalties , sustaining capital expenditure and allocated corporate costs but are before overburden stripping investment and capital improvement projects at Koolan Island . Comment Mount Gibson Chief Executive Officer , Peter Kerr , said : " Mount Gibson delivered a steady performance in the December quarter and half year , with iron ore sales in line with plan amid challenging weather and mining conditions at Koolan Island late in the year . In the Mid - West , our low - grade sales program was successfully completed in December and progress at the Shine Iron Ore Project has accelerated with site works underway in order to meet our target of first ore sales early in the September quarter . As scheduled , ore shipments will be lower during the next six months as we progress the peak overburden stripping phase at Koolan Island and develop Shine . However , strong iron ore prices continue to reduce the net investment required at Koolan Island compared with our original expectations during this period , and pricing outlooks remain very solid . Ore sales and cashflows are set to rise sharply from mid - 2021 as the overburden stripping phase is substantially completed at Koolan Island and Shine enters production . " Mount Gibson Iron Limited ABN 87 008 670 817 Level 1 , 2 Kings Park Road West Perth WA 6005 PO Box 55 , West Perth WA 6872 Telephone +61 8 9426 7500 Facsimile +61 8 9485 2305 Email admin@mtgibsoniron.com.au ASX Code MGX