Mount Gibson Iron Ltd.

Mount Gibson Iron Ltd. is a junior iron producer headquartered in West Perth, Australia, operating primarily in Australia. The company's portfolio consists of 1 operating mine. Key assets include Koolan Island. The business model is centered on the extraction, processing, and direct shipment of high-grade raw materials under long-term offtake agreements. Pricing mechanisms are directly linked to high-grade market indices, with adjustments for product specifications and impurities. A key operational characteristic is the ability to monetize previously assembled high-grade stockpiles, allowing sales volumes to be decoupled from immediate extraction rates and providing flexibility in responding to market conditions. The organization invests in processing enhancements, such as the installation of a tertiary crushing circuit, to more efficiently and cost-effectively process harder, oversized material anticipated in future extraction phases. This focus on processing capability ensures consistent product quality and supports cost management. The operational approach also involves supplementing core processing with mobile crushing contractors as needed to align output with sales commitments. Safety performance is a critical operational focus, with continuous improvement initiatives integrated into all activities, reflected in a multi-year trend of declining injury frequency rates.

Strategic priorities are focused on maximizing cash flow from the principal operating asset over its remaining life while actively pursuing new growth opportunities. The organization aims to leverage its substantial cash and investment reserves to acquire and develop meaningful resources projects, with a targeted focus on bulk materials and conventional base metals. Capital preservation is a core tenet, ensuring the enterprise remains well-positioned with the flexibility to act decisively on value-accretive acquisitions. The growth strategy includes making strategic equity investments in a portfolio of resource development companies where future financing or strategic opportunities may arise. Capital management is actively managed through measures such as on-market share buy-backs, which are implemented when considered to be value-accretive. Near-term objectives include driving sustainable productivity and cost improvements across all business units and responsibly managing treasury reserves. The long-term vision is to transition the business into new, long-life operations through disciplined investment and exploration.

Governance is overseen by a board of directors comprising a Chairman, a Lead Independent Non-Executive Director, and other non-executive members with extensive experience in law, finance, engineering, and the resources sector. The board structure includes 3 key committees: the Audit and Financial Risk Committee, the Nomination, Remuneration and Governance Committee, and the Operational Risk, Sustainability, and Contracts Committee, which held 4, 4, and 4 meetings respectively during the year. Executive remuneration is directly linked to performance through a structured framework. Short-Term Incentives are awarded based on achieving targets in areas such as safety, environmental performance, sales volumes, cost control, and business growth. The Long-Term Incentive plan is a Loan Share Plan where shares are issued to executives, vesting over a multi-year period subject to share price appreciation hurdles and continued employment, aligning executive interests with long-term shareholder value. The CEO, appointed in 2018, has been with the company since 2012, providing leadership continuity.

The organization's sustainability approach is guided by a formal Climate Change and Energy Management Policy, which acknowledges the scientific consensus on climate change and supports the Paris Agreement. The company has undertaken a risk review aligned with the Task Force on Climate-related Financial Disclosures (TCFD) framework and is engaging an expert consulting group to identify realistic decarbonization and energy efficiency initiatives. Environmental performance is managed through approved Environmental Management Plans and reported under the National Greenhouse and Energy Reporting Scheme, with a focus on reducing emissions from diesel combustion. In the reporting year, total energy consumed and greenhouse gas emissions were reduced by over 27%. A core commitment is maintaining a safe work environment, which resulted in the 5th consecutive year of improved safety performance, achieving a Lost Time Injury Frequency Rate of 0.0. Community engagement includes a program of stakeholder consultation with an emphasis on Traditional Owners, youth, and education, supported by direct financial contributions and sponsorships.

In July 2023, the company completed a significant structural transaction by divesting a portfolio of its non-core mining and infrastructure assets to Fenix Resources Limited. The consideration for this divestment included cash, 60 million shares, and 25 million options in Fenix, establishing an initial strategic holding of 8.6%. This position was subsequently increased to 10.06% following the exercise of 12.5 million options after the period end. This divestiture included the transfer of associated rehabilitation and contractual obligations. The corporate strategy also involves holding equity positions in a small number of other resource development companies where future financing or strategic opportunities may arise. The group's substantial shareholders include APAC Resources Limited and Shougang Fushan Resources Group Limited. The corporate structure includes several wholly-owned subsidiaries, such as Mount Gibson Mining Limited, Aztec Resources Limited, and Koolan Iron Ore Pty Ltd, which are party to a Deed of Cross Guarantee.