A small recovery in iron ore prices has helped boost margins and prices for struggling junior miner Atlas Iron.
While cash costs rose slightly in August, the miner’s margins were boosted by higher iron ore prices.
Atlas also lifted the amount of iron ore it shipped by a third and hit its production target of 14-15 million tonnes per annum in August, four months ahead of schedule.
“Atlas is in an increasingly strong position with positive cashflow, improved costs and rising production,” managing director David Flanagan said on Thursday.
Full cash costs for Atlas rose by $4 to $56.52 per wet metric tonne (wmt) in August from $55 in July.
However, average realised sale prices rose to $61/wmt, up from $57 while the amount of iron ore shipped by Atlas rose 33 per cent to 1.18 million/wmt.
The junior miner reported a $1.378 billion loss for 2014/15 after making writedowns and carrying out a restructure in an attempt to stay afloat.
Mr Flanagan believes there is a good chance of iron ore prices will continue to rise during the remainder of 2015 as Chinese customers restock inventories and supplies from high-cost mines fall.
“There’s opportunity for more mines to close and there’s also opportunity for a buying rally leading into December,” he told Fairfax.
“We’re seeing constant declines in stockpiles in China, and that tells me that there’s not an oversupply in iron ore. People need to basically restock.”
Iron ore prices are sitting around $US58 a tonne, having dropped to a 10-year low of $US44.10 in July.
At the time, Mr Flanagan predicted the low price was temporary, with steel demand growing and volatile prices the new normal.
Atlas in April suspended operations at its three mines and called a trading halt for its shares after prices plunged.
It recommenced operations at its Mount Weber, Wodgina and Abydos mines in May and July, and has been trying to cut costs to help cope with lower prices.
Shares in Atlas were 0.30 of a cent higher at 3.40 cents at 1048 AEST.
The stock has plunged by more than 90 per cent since its peak in 2011.