The Mount Gibson Iron Limited (ASX: MGX) share price is falling today despite a positive company update on its new iron ore project. Mount Gibson shares are trading 0.68% lower at 73 cents at the time of writing.
Mount Gibson Iron is a large iron ore miner located in Western Australia. The company has three major projects currently in operation, including Koolan Island, Extension Hill and Tallering Peak.
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Project update
The Mount Gibson share price is on the move today as the company provided an update on its planned development of the Shine iron ore project. The Shine mine is located 375 km northeast of Perth, in the mid-west region of Western Australia. The company said Shine was a "near-term, low-capital production opportunity that will further extend Mount Gibson's 16-year operational presence".
Today, Mount Gibson reported its iron ore reserves at the mine were 2.8 million tonnes. The mining time for the project is expected to be 2 years. However, this could be extended by developing a 'stage 2' pit if the subject is a success.
Furthermore, the company reported it was currently finalising commercial and permit requirements to start development and achieve targeted first ore sales in mid 2021.
What now for the Mount Gibson share price?
The Mount Gibson share price has been on downward trend this year as COVID-19 related issues have impacted supply chains. Mount Gibson shareholders will be hoping this new project can provide the impetus to drive the company's share price upwards.
Mount Gibson CEO Peter Kerr was optimistic, saying:
We are pleased to be able to capitalise on the positive iron ore market conditions by progressing the Shine iron ore project in order to extend our significant presence in the mid-west, where we have been an established iron ore exporter since 2004.
Our detailed review of the project has confirmed Shine as an attractive production opportunity that can be quickly brought on line and appropriately staged to suit market conditions.
