The company announced the suspension of its Mt Webber, Wodgina and Abydos mines on April 10 in response to low iron ore prices.
Since then, the iron ore spot price for 62% fines has recovered by 18.2%, back up to $US56.18 per tonne as of last night.
Mt Webber and Wodgina had already been suspended, while Abydos was yet to be wound down.
Mining will continue at Abydos, with processing and haulage largely uninterrupted, while mining will restart at Wodgina as soon as possible.
“The decision to continue operating at these projects, rather than suspending production in April as previously announced, is the result of a substantial reduction in forecast cash costs for May at these mines,” Atlas said.
“The cost reductions were achieved with the support of Atlas’ key service providers.”
Atlas’ contractors, led by haulage provider McAleese Group, had been working on ways to keep the company’s mines operating.
Atlas also successfully completed the first lump shipment from Abydos in March and now expects around 65% of production from the mine to be lump, which demands a premium to fines.
As a result of an improvement in price, the lump product and contractor assistance, Atlas expects to be cashflow positive in May.
That assessment is based on targeted all-in costs plus interest and sustaining capital that are breakeven at a headline IODEX 62% CFR level of less than $50 per dry metric tonne.
The company is still working on a longer-term operating solution and will assess its options for Mt Webber.
Atlas also said it was working with the Western Australian government to finalise a 50% cash royalty rebate, though the company won’t claim it until the outcomes of the financial review are known.
The company had $A125.5 million cash at the end of March, down from $169.4 million, after $18.7 million in debt principal and interest costs, $9 million in capital, and $23.7 million to settle provisional pricing adjustments from the December quarter.
March quarter cashflow from operations was negative $21.3 million, including the provisional pricing adjustments, which resulted in an average realised price of $50.31/wmt.
Quarterly shipments were 3.4 million wet metric tonnes with all-in costs reducing to $60/wmt from $66/wmt, while C1 costs dropped to $43/wmt from $46/wmt.
Costs reduced further in March to $42.65/wmt C1 and $57.80/wmt all-in.
Atlas’ voluntary suspension is continuing, but the company says positive momentum has been generated.
The company again confirmed that it remained solvent and remained in compliance with debt instruments.
