CuFe Ltd (ASX:CUF) has increased mining load, processing and haulage at the JWD Iron Ore Project in Western Australia following a restart of operations at the project in January.
Run-of-mine ore stock is accumulating again ahead of the crush and screen plant, while a nightshift has been introduced to enable maintenance and preparation to occur during the off hours and avoid processing delays caused by servicing the plant.
The company has also retained an additional haulage contractor to increase the rate of haulage to port.
Product hedges
“It’s pleasing to see the full production chain up and running again at JWD,” CuFe executive director Mark Hancock said.
“Iron ore pricing remains volatile, but we have been successful to date in achieving attractive pricing for JWD product, with our realised pricing last quarter impressive when compared to other West Australian producers.
“We will continue to supplement our physical sales with hedge positions to protect downside, as and when the market offers attractive levels to do so, which it has done in recent weeks.”
CuFe has taken advantage of improved forward pricing on offer in recent weeks to grow its hedge coverage with the aim of providing downside price protection at levels at or above the company’s breakeven cost.
The current hedge positions outstanding are as follows:
February 2022 (to cover January partial shipment)
- Zero cost collar - 62% index basis US$110 - 139 for 25,000 dry metric tonnes (DMT)
- Lump premium swap – 30.8c per dry metric tonne unit (DMTU) – 25,000 tonnes
April 2022 (to cover March shipment)
- Zero cost collar - 62% index basis US$110 - 139 for 25,000 DMT
- Swap US$133 – 62% index basis – 25,000 DMT
May 2022 (to partially cover April shipment)
- Zero cost collar – 62% index basis US$120 –162 for 25,000 DMT
- Lump premium swap – 30.8c per DMTU – 25,000 tonnes
June 22 (to partially cover May shipment)
- Zero cost collar – 62% index basis US$120 –162 for 25,000 DMT
Sales
CuFe successfully completed a shared iron ore shipment with GWR Group (ASX:GWR) Ltd in January. The next shipment will load in March and has been sold to a South-east Asian steel mill.
The company says South-east Asia is proving to be a key market for JWD, with the vessel size at Geraldton port being a good match for the logistics requirements of the South-east Asian mills.
About CuFe
CuFe is an emerging copper and iron ore producer with a strategy focused on near-term, high-grade premium product iron ore projects and maintaining exposure to strategic metals.
The company has interests in various advanced iron ore projects along with copper and gold interests in Australia.