The Mineral Resources Limited (ASX: MIN) share price could climb higher this morning after a solid Q4 June 2019 quarterly update from the Aussie mining group.
What were the highlights from Mineral Resources' announcement?
Mineral Resources said that it has used the net cash proceeds from the offering to refinance certain of its existing credit facilities and will use the remainder for general corporate purposes, including capital expenditures.
Iron ore shipments for the company totalled 3.3 million tonnes (Mt) in Q4 FY19, in line with the previous quarter, and up 49% on the prior corresponding period in FY18.
Koolyanobbing was in full production during the quarter, operating at its target annualised run rate of 6Mtpa of iron ore production.
Mineral Resources said that additional road train haulage units were obtained and a fourth rail consist was brought online during the Q4 June 2019 quarter, with plans to increase production to 7.5Mtpa by Q1 FY20.
Spodumene concentrate production from the Mt Marion Lithium Project in Q4 FY19 was 15% less than the previous quarter; however, the proportion of high-grade 6% spodumene concentrate product increased to 69% compared to 66% in the previous quarter.
The miner also reported that construction of its Wodgina Lithium Project's three-stage 750,000 dry tonne per annum spodumene concentrate plant and associated non-process infrastructure progressed positively for the group during the quarter. Train one of the lithium project is complete with the current focus on optimising lithium recoveries, train two commissioning is underway and construction of train three is progressing.
The company expects first ore from the site in Q1 FY20 while the Wodgina aerodrome runway has been completed with the first charter flight planned for Q2 FY2020.
The binding sale agreement between Mineral Resources and Albemarle Corporation for the sale of a 50% interest in Wodgina continues to be subject to approvals from the relevant regulatory authorities in both Australia and China as well as third party consents.
Completion of this Wodgina transaction is still expected to occur during the 2019 calendar year, with the company not providing any further specifics.
According to the quarterly update, a study is presently underway to optimise production levels while managing water and energy demands
However, until the study's expected completion in Q1 FY20, Mt Marion will continue to produce both 6% and 4% spodumene concentrate for the company.
How has the Mineral Resources share price performed this year?
The Mineral Resources share price is currently trading at $15.37 per share and has pushed marginally higher since the start of the year as production disruption and lithium uncertainty have contributed to its share price volatility.
Global lithium prices have been hammered lower this year despite the London Metals Exchange (LME) beginning to offer contracts on the metal, with the expected uptick in demand from electric cars failing to materialise as of yet.
While the Mineral Resources share price has struggled to post capital gains, the likes of pure-play Orocobre Limited (ASX: ORE) and Galaxy Resources Ltd (ASX: GXY) have seen their share prices smashed as investors headed for the exit.
