PERTH (miningweekly.com) – ASX-listed BC Iron reported an after-tax net loss of A$96.3-million during the six months ended December 31, as the price of iron-ore continued to decline and the miner faced difficult operating conditions at its Nullagine joint venture (JV), in Western Australia.

The first-half earnings compared with an after-tax net profit of A$69.6-million in the previous corresponding period.

The net loss included a A$100.2-million noncash impairment charge, relating to the carrying value of the Nullagine project and inventory.

“It was a challenging half-year period for BC Iron with our financial results affected by both the soft iron-ore price and clay-related production issues. However, we estimate that, notwithstanding the commodity price environment, BC Iron would have generated an underlying earning before interest, tax, depreciation and amortisation for the period of around A$5-million to A$15-million in a more typical operational half,” said MD Morgan Ball.

During the half-year, the Nullagine JV delivered sales volumes of 2.33-million tonnes, compared with 3.14-million tonnes in the first half of 2014, generating revenue of A$133.3-million, compared with the A$301-million achieved in the previous corresponding period.

Ball noted that operational challenges at the Nullagine project were addressed during the quarter, and the operation ramped up to its nameplate six-million tonnes a year run-rate by November, allowing the company to generate a cash flow of A$15-million in the three months following.

“This highlights BC Iron’s ability to operate profitably despite the challenging macroeconomic outlook for the industry. BC Iron remains focused on operating the JV in an efficient and productive manner, while continuing to build on the sustainable C1 cash cost savings of A$2/t to A$3/t that we have delivered to date.”

Looking ahead, the Nullagine JV was expected to deliver between 5.2-million tonnes and 5.6-million tonnes of product for the 2015 financial year, at a cost of between A$47/t and A$51/t free-on-board.