Felix posts 50% profit increase

FELIX Resources has reported a 50% profit jump to $A47.2 million for the 2007 financial year, and says the company will now focus on construction of the Moolarben Coal Project, expanding Newcastle port facilities and containing costs.
Felix posts 50% profit increase Felix posts 50% profit increase Felix posts 50% profit increase Felix posts 50% profit increase Felix posts 50% profit increase


Staff Reporter

Despite the pleasing result, port congestion and subsequent demurrage costs reduced the profit result, as did the stormy weather at Newcastle and the Hunter Valley in June this year.


Total coal sales for the year were 5.3 million tonnes, of which 3.7Mt were attributable to Felix, compared to 3Mt in the previous year.


"Felix now has four operating mines with the commissioning of the Ashton longwall in the last quarter of 2007," Felix director Brian Flannery said.


The company also operates the Yarrabee, Ashton opencut and Minerva mines.


"The Ashton longwall commissioning was slower than expected but is now exceeding targeted tonnages," Flannery said.


"This coupled with higher prices for all coal types augers well for strong growth in FY2008."


During the year, exploration at Moolarben has resulted in the opencut resource being increased to 348Mt and the underground resource to 267Mt.


"This new mine development is the most important development for Felix and will add substantial value to shareholders over its 25-year mine life," Flannery said.


"There are very few bituminous coal projects in the world that have such substantial resources of low ratio coal that exists at Moolarben."


Approval for Moolarben is expected later this year, after legal action over disputed land between Felix Resources and Xstrata Coal is resolved.


"Felix believes that the Ulan action will not be successful ... It is disappointing that this foreign owned mining company, which enjoys substantial profits generated as a result of licences to mine from several state governments in Australia, would apparently seek to prevent Felix from mining this state owned coal," Flannery said.


He said the key issue to successfully developing Moolarben will be the expansion of Port Waratah Coal Services at Newcastle, now underway, and the development of the new NCIG terminal in which Felix is a 15.3% shareholder.


The NCIG port has now received development approval from the New South Wales Government, with first construction work expected onsite by November 2007 and commissioning due late 2009.


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