(MENAFN- ProactiveInvestors - Australia) Iron ore developer Centrex Metals' (ASX:CXM) chairman David Klingberg views the the fall in iron ore prices as a short term issue.
In an address to shareholders, he also re-iterated that Centrex achieved significant milestones during the year which in the Board's opinion, are not reflected in its share price.
He said the company's projects in South Australia are long term, with expected production lives in excess of twenty years.
Over this period he said the company would expect a number of cyclical swings in commodity prices, both up and down. A short term cyclical down trend has limited impact on our long term planning.
Over time, the demand for steel and iron ore will be largely determined by population increases and increasing urbanisation in developing countries. These trends provide sound fundamentals for long term iron ore pricing.
Recently iron ore prices have fallen considerably. Centrex believes this to be a short term issue. Our projects are long term, with expected production lives in excess of twenty years. Over this period we would expect a number of cyclical swings in commodity prices, both up and down.
A short term cyclical down trend has limited impact on our long term planning. Over time, the demand for steel and iron ore will be largely determined by population increases and increasing urbanisation in developing countries. These trends provide sound fundamentals for long term iron ore pricing.....
Klingberg said, "Our projects continue to be de-risked through resource definition and feasibility studies and as such we expect to see more recognition of value in the Company's existing assets as we move towards development and construction of our major projects.
The Company has strengthened its resource base by increasing both the quantity and quality of our iron ore resources in both the Eyre Peninsula and Bungalow Joint Ventures. Further exploration drilling is expected to bolster the iron ore resources for Project Fusion.
Importantly, our joint venture partners Wuhan Iron & Steel (Group) Co and Baogang continue to provide enthusiastic support.
Increasing return on current assets
Unlike many of its peers, David Klingberg said Centrex is in the enviable position of having a strong balance sheet.
Centrex has restructured internally and a devoted business development unit has been created, charged with the task of maximising value from the existing assets and identifying and building a pipeline of development opportunities for the Company.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.