Mount Gibson Iron Limited (ASX:MGX) Settlement With Koolan

Mount Gibson Iron Limited (ASX:MGX) Settlement With Koolan

Mount Gibson Iron Limited (ASX:MGX) Settlement With Koolan

  • July 7 – Mount Gibson Iron will receive a $64.3 million business interruption insurance settlement following the failure of the Koolan Island main pit seawall in October 2014.
  • The company temporarily suspended mining activity at the Koolan Island hematite mine’s main pit due to pit wall instability in 2014. The wall later collapsed in November after flooding caused by high tides.
  • Around 200 workers were made redundant following the failure, with operation later placed in care and maintenance.
  • Mount Gibson also decided to sue the engineers responsible for building the Koolan Island mine seawall.

Mount Gibson Iron Limited is a producer of iron ore products. The Company’s principal activities include mining and shipment of hematite iron ore at Koolan Island in the Kimberley region of Western Australia; mining of hematite iron ore deposits at the Extension Hill mine site in the Mid-West region of Western Australia and haulage of the ore through road and rail for sale from the Geraldton Port, and exploration and development of hematite iron ore deposits at Koolan Island and in the Mid-West region of Western Australia. The Company operates through two segments: Extension Hill and Koolan Island. The Extension Hill segment includes the mining, crushing, transportation and sale of iron ore. The Extension Hill mine is located in the Mt Gibson Ranges. The Koolan Island segment includes the mining, crushing and sale of iron ore. The Company’s Koolan Island hematite mining operation is located approximately 140 kilometers north of Derby in Yampi Sound, Western Australia.

Overall, the bias in prices is: Upwards.

Short term: Prices are moving.

Intermediate term: Prices are trending.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 0.34.

The projected upper bound is: 0.43.

The projected lower bound is: 0.37.

The projected closing price is: 0.40.

MT GIBSON FPO closed down -0.010 at 0.400. Volume was 91% above average (neutral) and Bollinger Bands were 54% wider than normal.

Open      High        Low        Close       Volume
0.415      0.422      0.397      0.400      4,172,625

Technical Outlook
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period      50-period      200-period
Close:                       0.37                0.32               0.36
Volatility:                78                   62                   68
Volume:                  4,437,936      2,457,140      2,451,938

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.


MT GIBSON FPO is currently 10.9% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into MGX.AX (mildly bullish). Our trend forecasting oscillators are currently bullish on MGX.AX and have had this outlook for the last 18 periods. Our momentum oscillator is currently indicating that MGX.AX is currently in an overbought condition.

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 84.7458. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 8 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 72.38. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 6 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 177.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 5 period(s) ago.


The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 17 period(s) ago.

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John Heffernan

John Heffernan is an Analyst at HEFFX. John is a BSc in Economics with Honors from the University of Buckingham, and is a contributor on equities at Live Trading News.

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