Hancock profits surge as Roy Hill nears production growth

By 01/11/2019News

Article by Salomae Haselgrove courtesy of Australian Mining

Hancock Prospecting has delivered a 90 per cent increase in profits during the 2019 financial year, largely owing to its acquisitions and development efforts.

Two of the crucial boosts to the company were the acquisitions of Pilbara company Atlas Iron and further developments at the Roy Hill iron ore project.

Roy Hill reached 55 million tonnes of production for the year, its maximum capacity. The project has been approved to expand its production to 60 million tonnes per annum.

“Roy Hill’s outstanding result was due to significantly lower costs and higher sales volumes coupled with increased iron ore prices, boosting group profitability,” Hancock stated.

“Hancock has not yet received any dividends from Roy Hill, with cash flow from the project being utilised to pay down debt, hence reducing costs.”

Hancock’s 50/50 joint venture with Rio Tinto Hope Downs also continued to operate at capacity, producing more than 46 million tonnes for the year.

Atlas Iron positively impacted Hancock’s results in its first year as part of the group, contributing $144 million to the company’s net profit after tax.

“Since joining the Hancock group, Atlas has made a strong turnaround, with cash flow from operations increasing to $150 million in the 2019 financial year, from a $3 million outflow in the previous year,” the company stated.

Hancock also acquired 100 per cent of Canadian company Riverdale Resources. Riverdale owns the highly prospective metallurgical coking coal deposit Grassy Mountain, based in Alberta, Canada.

Construction at Grassy Mountain is due to start in 2020.

Looking ahead, Hancock is assuming grass roots exploration of prospective copper and gold tenements in Ecuador, and closer to home it is exploring its Four Eagles joint venture with Catalyst’s wholly subsidiary Kite Gold in the Victorian goldfields.