Shares in FTSE 250-listed miner Ferrexpo lifted more than four per cent in afternoon trading after the Ukraine-based group reported record sales and a bolstered balance sheet.
Last year, Ferrexpo sold 11.7m tonnes (mt) of iron ore pellets, which are used in steelmaking, up from 11.3mt in 2015, the group said in a trading update today.
A boom in iron ore prices lifted the average price of Ferrexpo pellets to $58.5 per tonne, from $55.5 per tonne in 2015, while the cash cost of production for the group fell around $2 per tonne.
Iron ore prices almost doubled to $80 a tonne last year, led by a burst in demand from Chinese steel mills that were being hit hard by price rises in another commodity, coking coal. This led them to turn towards the iron ore pellet market.
Shareholders were also buoyed by news that the firm's cash balance has improved more than 300 per cent since the end of 2015. Its cash balance now stands at around $145m (£118m), up $110m from $35m a year ago. Ferrexpo also managed to retire $196m of debt last year.
The company had been struggling since Bank FC&C, which held most of its cash, was declared insolvent by Ukraine's central bank in September 2015.
Ferrexpo's stock was up 4.3 per cent in afternoon trading to 135.05p, though its share price hit a day-high of 141.2p.
In a statement, Ferrexpo said:
In 2016, Ferrexpo successfully focused on reducing its debt levels, and as such enters 2017 with a much improved capital structure.
In 2017 the group expects to benefit from higher pellet premiums while production volumes will continue to reflect better-quality output with total production increasing modestly compared to 2016. Costs remain subject to commodity prices, the Hryvnia exchange rate and inflation levels in Ukraine.