Big iron ore production and good news on its gold company spin-off watered the mouths of investors today. Here are the details
The post Why the GWR Group (ASX:GWR) share price soared 9% today appeared first on The Motley Fool Australia. –
The GWR Group Ltd (ASX: GWR) share price went gangbusters today. At close of trade, shares in the mineral exploration company were swapping hands for 36 cents each – up 9.09%.
The positive price movement comes as the company updates investors on recent iron ore production and its gold mining spin-off.
Let’s take a closer look at today’s news.
What’s been driving the rocketing GWR share price?
Iron ore production
In a statement to the ASX, GWR Group told investors of recent developments in its iron ore production.
Last month, the company exported more than 116,000 wet metric tonnes of iron ore, which GWR Group labelled as a “significant milestone”. The average realised price for its iron ore in June was about US$214 a tonne.
In further good news for the GWR share price, the company says it expects to ship more than 1 million tonnes of iron ore by the end of this year.
GWR Group chair Gary Lyons said:
With the financial year coming to a close I am very proud of the entire GWR team and our Alliance partners PRG, with the many challenges we have and continue to overcome. It was a fantastic achievement to export more than 325,000 WMT of iron ore mined from our flagship C4 Iron deposit.
The first month of the new financial year is shaping up to be a rewarding one for GWR shareholders.
…we already secured our first ship for the month of July which is due to commence loading at the Port of Geraldton between 16 and 20 July 2021.
The price of iron ore is 37.5% higher year-to-date.
Gold production spin-off
In other news, the company gave an update on its planned demerger of its gold assets into a new, ASX-listed company.
In what GWR says will “enable” it to focus on its more lucrative iron ore production, the Western Gold Resources (WGR) spin-off will occur on 19 July. Eligible shareholders will receive 1 WGR share for every 8.38 GWR Group shares they own.
In addition, gold projections at the company’s Wiluna West site have been increased to approximately 300,000 ounces of gold.
GWR share price snapshot
Over the past 12 months, the GWR share price has increased by 490%. However, since reaching its 5-year high of 47 cents per share, the company’s value has decreased by 23%.
Given its current valuation, GWR Group has a market capitalisation of about $110 million.
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