The rollercoaster financial year FY25 is the gift that keeps on giving for MinRes, this time announcing an $807m H1 loss driven by the company's over-extension into lithium.
And the news comes after the recent resignation of its billionaire founder and managing director Chris Ellison after he was found to have committed tax fraud and pocketed company money after a two year investigation by the board.
The WA mining services provider-cum-minerals producer and refiner - a long-term success story - has been hit with wave after wave of bad news in the past 18 months. Let's break it down.
- An internal investigation showed Ellison did not disclose his financial interest in one of the British Virgin Island companies that a MinRes (ASX : MIN) subsidiary bought almost $4 million in mining equipment two decades ago.
- Discovered other financial discrepancies that revealed misuse of company resources for personal gain
- Mothballed its newly acquired Bald Hill lithium mine: 300 jobs lost
Now, bottomed out lithium prices have started to take effect, with $352 million - largely associated with the Bald Hill suspension - chalked into the $807 million H1 loss.
That net loss of $807 million is a drop of $1.34 billion year-on-year.
MinRes posted underlying EBITDA of $302 million for H125, down 55% from the previous comparable period.
"The Lithium division responded to a sustained tough global market by further reducing costs and improving performance, with the benefits of these measures coming to the fore late in the half, which coincided with a modest recovery in prices," Ellison said.
The company has also reduced its iron ore guidance after previously announcing the shuttering of its Yilgarn iron ore operation in January. It has also dispersed 600 full-time employees across other facets of the business.
A reduction in commodity prices weighed on the results, but was partially offset by record mining service earnings, which benefitted from increased production at Onslow Iron.
Yet delays from the recent cyclone have dropped guidance to 280-320Mt, down from the previous forecast of 295-315Mt, compounded by iron ore production costs rising from $60/t to $70/t.
Trailblazing founder to exit out the back
Ellison was given 18 months by the board to stay on as MD before having to leave the business, a move that turned up shareholders' noses at the company's AGM.
Addressing shareholders at the meeting in late November, Ellison said he had made mistakes and took "full responsibility" for the tax evasion scandal - yet shareholders were less than impressed.
In an ASX release before the meeting, Ellison wrote: "I made an error of judgement with reporting of personal tax. I deeply regret the impact this has had on our business and our people," he said.
"Looking back, I accept things could have and should have been done differently around corporate governance, but those measures are now in place.
"It has been a challenging six-month period for MinRes, but our company has a history of weathering storms and coming out stronger."
Shares in the $6 billion market-capped MinRes have taken multiple hits over the past nine months, and are down 61.63% to trade at $30.50 per share.