Atlas will survive after $1.4b loss; CEO

Atlas Iron boss David Flanagan says the miner’s chances of survival are “very good” as investors backed the stock following a $1.

杭州桑拿

4 billion annual loss.

Shares in the troubled Perth-based company gained 0.1 cents, or 3.3 per cent, to 3.1 cents at 1400 AEST after the iron ore price rose above $US56 a tonne.

Weakness in Australia’s largest export commodity contributed to $1.01 billion in impairment charges and asset value writedowns, pushing Atlas deep into the red.

Mr Flanagan said Atlas had been dealing with one of the hardest years in the iron ore market that he had ever seen, but he rates the company’s survival chances as “very good”.

“They’re better than that, because we’re not only focused on just surviving, we’re actually focused on building a really strong business and thriving,” Mr Flanagan told AAP.

“From whatever position we’re at there’ll be a lot of other iron ore producers who will fall out of the iron ore market before us and that will keep things tight.”

Mr Flanagan recently invested $200,000 of his own money in Atlas’ capital raising and predicts the iron ore price could bounce around over the next year.

Atlas Iron is now valued at around $80 million and its shares are worth around 20 times less than they were at this time last year.

In April, Atlas was forced to suspend operations at its three mines and call a trading halt following the collapse of the iron ore price which roughly halved to around $50 a tonne in the past year.

CMC Market analyst Michael McCarthy said a lot of the weakness had already been factored into the company’s share price and a recent iron ore price rally may have come too late.

“They didn’t go broke, that’s good news, but they’re not out of the woods by any stretch of the imagination,” Mr McCarthy said.

“Now it’s a matter of whether they survive the next cycle.”

He added that the company’s shares continued to be traded in large volumes by speculative traders.

Atlas recently raised $87 million of a hoped for $180 million target and says it still has the support of major contractors as part of a collaboration model.

BGC Contracting now holds a 17.3 per cent stake in the company and McAleese Ltd has 10.5 per cent share.

Atlas is also confident that over the next two and a half years it will be able refinance part or all of its $276 million net debt.

ATLAS PLUNGES INTO THE RED

* Full year loss of $1.4b, compared to $14m

* Revenue up 35pct to $718m

* No dividend