In an announcement to the ASX, BC Iron Limited (ASX:BCI) reported that it had cut costs in production while lifting output. The company expects to reach the lower end of its cash cost guidance of $US47 to $US51 per tonne this fiscal year. The miner’s costs averaged $US49 per tonne in the first quarter of 2015 and came it at $US43 per tonne in the month of March. The company’s lower quality iron ore sells for even less than its normal quality iron ore. Despite a “wet season” affecting operations, it reported higher than expected production in the first quarter. BC Iron produced 1.46m tonnes in the first quarter of 2015, up from 1.22m from the previous year.
BC Iron said it hopes to continue reducing costs to deal with lower commodity prices. In the its report, it said the company “remains focused on further sustainable cost reductions and expects to achieve the lower end of the NJV’s C1 cash cost guidance range… As the Company continues to implement and realise these cost-focused initiatives, it is targeting a further material reduction to this range for FY16 cost guidance.” The company’s main assets are in the Pilbara region, including Nullagine Joint Venture (NJV), Buckland and Iron Valley. It ended the quarter with $107.5m in cash and $46.9m in debt and remains in a “strong balance sheet position.” Shares of BCI are up 2.2c, or 8 per cent, at 29.7c per share around 3pm on Wednesday. BCI has declined 94 per cent in the last 12 months and is down 44 per cent so far this year.