Struggling vanadium producer Atlantic has suffered another disaster after a fire engulfed key infrastructure at its Windimurra project late on Tuesday afternoon.
The company, which had $606,000 in the bank at the end of December, was yesterday assessing the damage to the plant after a fire ripped through the facility.
The cause of the fire is unknown. It is unclear whether the four-storey plant has suffered any structural damage. Pictures show the top three levels of the facility engulfed in flames.
Atlantic said none of its staff were injured during the fire.
Atlantic managing director Michael Minosora said it was too early to tell how much damage had been done.
"It is too early for us to comment on the extent or impact of the fire within the beneficiation plant. We have engineers assessing the situation," he said.
The beneficiation facility contains magnetic separators that upgrade Atlantic's finely milled ore into a concentrate before it is fed into a 104m-long roasting kiln.
The latest disaster came after a relatively positive December quarter in which Atlantic produced 142 tonnes of vanadium in the final month of the year. It was the closest it has come to a revised 225t to 250t level to break-even on a cash-flow basis.
Atlantic said late last week it needed to produce 325t to 350t each month to break-even after the cost of its $551.5 million debt was taken into account.
January production was hit by poor weather and, even though the beneficiation plant was expected to close for planned maintenance this month, the fire appears certain to set the company back further.
It is understood only the tower containing the magnetic separation plant was affected by the fire. The nearby ball mill, which feeds the beneficiation plant, was not damaged. It is believed the roasting kiln was also untouched, meaning Atlantic could manage limited exports this month by processing concentrate stockpiled ahead of a planned maintenance shutdown.
But the major issue for Atlantic will be its parlous cash position, with the company finishing the December quarter with $606,000 in the bank and projected cash outflows of $44.4 million for the March quarter.
Mr Minosora said the company regarded its latest setback as "just another challenge".
"We remain totally committed to continuing the ramp-up of production at the Windimurra project," he said.
Atlantic owes its financiers $551.5 million, including $177 million to Anthoni Salim's Droxford International.
Atlantic's shares last traded at 17.5Â¢.