Metro Mining on track to reach its 2018 loading target of 10,000 tonnes of bauxite per day

Metro Mining’s Bauxite Hills Mine which has shipped 62,000 tonnes of bauxite on May 7 to Xinfa Group in China, one of the country’s largest integrated aluminium companies is on track to load 10,000 tonnes of bauxite per day. The project is forecast to generate EBITDA of $2.5 billion. The Bauxite Hills mine in Queensland could continue with its mining target despite the disruptions from extreme weather at the start of the year.

The shipment to Xinfa at the designated time has forged its position in the niche bauxite industry in Queensland. The company has been able to meet every milestone along the way from exploration to construction, production and shipment. Pricing under the agreement with Xinfa is linked to a well-established alumina price index.

Since the first shipment, the company has been maintaining a loading rate of more than 7,000 tonnes of bauxite per day from site to ship overseas. Management expects to reach its 2018 target average of 10,000 tonnes per day by the end of June.

Metro Mining Ltd’s share price has retraced over the last three months after the bauxite producer hit an all-time high in February.  The reason behind the retracement in the company’s share price could be a decline in the Bauxite CIF Australia price to about US$ 47 per tonne in April and further down to US$ 43.7 per tonne in May.

The bankable feasibility study (BFS) was worked on a mid-range cost, insurance and freight (CIF) bauxite price of about US$45 per tonne. The current price is still broadly in line with that range. This indicates that the compelling fundamentals which underpinned the project at the BFS stage are still in place.

Metro Mining is now in production and shipping stage and has a number of offtake agreements in place which provides additional comfort in terms of product sales. This has encouraged a pstive outlook for the company in 2018.