Atlas Iron to take a $900 million write-down
Mid-tier iron ore miner Atlas (ASX:AGO) said Tuesday it expects to book a non-cash impairment of up to $900m at its half-year result after reviewing the carrying value of its operations in Western Australia's Pilbara region.
Atlas acquired many of the deposits in the Horizon 1 and 2 iron ore projects between 2009 and 2011, using its shares. But the company’s current weak stock price, compared to the levels when those deals were done, meant it had to record an impairment of between $700 million and $900 million, the firm said.
Despite the big write-down, and iron ore prices below $70 per tonne, Atlas added it had been able to “maintain a largely cash breakeven operating position, excluding one-off restructuring costs” in the first half of the financial year.
The company added that the exact amount of the impairment is subject to forecast iron ore prices, exchange rates and market conditions when assessed on December 31.