Atlas Iron (ASX:AGO) has updated the market on its progress after restarting its iron ore operations. The company finished the fourth quarter of calendar year 2016 with approximately A$134M in cash, an increase of almost A$40M compared to the cash position at the end of September.
As its debt facility requires the company to use any cash in excess of A$80M to be used to repay the loan, subsequent to the end of the quarter, Atlas paid A$54M to its debtors, reducing the value of its loan to A$118M (but keep in mind the loan is denominated in US Dollar). Atlas thinks it’s well-positioned as it has entered into some hedging agreements protecting its operating margins, and this should further increase its cash position, allowing Atlas to repay more of its debt.
The company expects to reach a net cash position by the middle of this year, which would make Atlas Iron one of the (unexpected?) survivors of the iron ore price crunch.