Gindalbie takes $640m hit on Karara
UPDATE 2.25pm: Shares in Gindalbie Metals have slumped after the company announced a $640 million impairment charge against its investment in Karara Mining.
Karara Mining is the joint venture company with China's Ansteel which is developing the Karara magnetite iron ore project in the State's Mid-West.
Gindalbie said the expected impairment recognised the lower than forecast production levels at Karara because of existing capacity restrictions, the lower than forecast iron ore price and the higher than anticipated Australian dollar.
"The impairment charge will not change the company's ability to continue to operate its business," Gindalbie said in a statement.
"This impairment charge will be recorded in the company's annual financial accounts for FY2014 in accordance with applicable accounting standards."
Gindalbie has experienced ongoing teething problems with the ramp-up of Karara and is still facing major ongoing issues.
Shares in the company were off 1.1 cents, or 18.97 per cent, to 4.7 cents at the close of trade after touching an intraday low of 4.4 cents.
