The Mineral Resources Limited (ASX: MIN) share price is falling today despite news of a maiden production. This afternoon, the mining services company announced the first iron ore production from its Wonmunna Iron Ore Mine in Western Australia's Pilbara region.
The Mineral Resources share price is currently trading for $37.41, down 4.2% from Friday's close.
Let's look further into the company's announcement.
Wonmunna Iron Ore Mine
The announcement of the mine's maiden production comes only five months after Mineral Resources began breaking ground at the site.
Mineral Resources stated it plans for the mine to produce its approved 5 million tonnes per year run rate by 2021's June quarter.
The company purchased Wonmunna from the Australian Aboriginal Mining Corporation Limited (AAMC) in September. Today, Mineral Resources reiterated that AAMC shareholders will receive a royalty in respect of the first 40 million dry metric tonnes extracted from the mine, as was a term of the transaction.
Mineral Resources stated the iron produced at Wonmunna will be used to underpin the company's Utah Point Hub iron ore blend. It is intended that the blend will include tonnes from a number of the company's nearby iron mines.
Commentary from management
Mineral Resources managing director Chris Ellison said Wonmunna's fast development meant the company "deliver[ed] what others thought to be impossible". He went on to say:
It is the innovative design of our NextGen crushing plants and the agility of our people who make this happen.
Wonmunna's development was completed on time and within budget. Once we ramp up Wonmunna to full production, the mine will provide permanent employment for 500 men and women.
This is a great outcome not just for MRL but also for AAMC's shareholders, who will shortly receive their first royalty cheque from Wonmunna.
Mineral Resources share price snapshot
The Mineral Resources share price is currently down 2.76% year to date. However, if you bought Mineral Resources shares this time last year for $12.61, you'd be experiencing an incredible 196.67% return.
Mineral Resources has a market capitalisation of around $7.4 billion with approximately 188 million shares outstanding.
