MinRes shares dive on mixed Q2 result
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More news: Mineral Resources shares tanked in early trading on the ASX after the mining group reiterated full-year guidance but reported a mixed second-quarter result.
MinRes shares were down 5.7% to $34.18 by 10:50am AEDT, having retreated by more than 40% over the last 12 months.
RBC Capital Markets analyst Kaan Peker said that mining services volumes missed consensus forecasts, while lithium costs were running above full-year guidance.
However, Peker noted that costs are expected to decline in the second half, while all lithium assets realised higher pricing and improved product grade, likely offsetting higher first-half costs.
At Onslow Iron, shipments were weaker than expected during the second quarter, but produced and mined volumes were higher than forecasts.
Mineral Resources reaffirms FY guidance as Onslow Iron ramps up
The news: Mineral Resources maintained its full-year guidance as the mining group reported flat production volumes for the December quarter, with expectations that output will increase into the second half following the ramp up of its Onslow Iron project in Western Australia.
The numbers: MinRes reported quarterly production volumes of 68 million tonnes, flat quarter on quarter.
First-half iron ore shipments reached 9.7 million wet metric tonnes (wmt), compared with full-year guidance of 21.5 million to 24.7 million wmt. The average quarterly realised price across its iron ore operations was USD84 ($135) per dry metric tonne (dmt), a 3% increase quarter over quarter.
First-half lithium shipments of 261,000 dmt tracked guidance of 420,000 to 460,000 dmt, with the miner's lithium division focused on "lower-volume, higher-quality production with tight cost control to match current market conditions".
The context: MinRes said that second-quarter production benefited from the ramp up of Onslow Iron, but was offset by lower volumes at Yilgarn Hub and Bald Hill, with both sites being transitioned to care and maintenance.
The company noted that full-year production will be weighted to the second half of the year, aligned with the ramp up of Onslow Iron.
The sources: ASX announcement, RBC Capital Markets research
