Admiralty Reports $4 Million FY25 Loss Amid Mariposa Pre-Production Progress

Mariposa Project Reaches Pre-Production Milestone

Admiralty Resources NL (ASX:ADY) marked a key phase in its development as the Mariposa Iron Ore Project in Chile progressed into pre-production during FY25. The company reported trial production yielding approximately 66% iron concentrate, with about 30,000 tonnes stockpiled and initial shipments dispatched from Las Losas Port in early 2026. Infrastructure upgrades included road improvements, installation of a wet magnetic drum for processing capacity, and the commissioning of a transmission line connecting the mine to the grid, expected to reduce power costs by replacing diesel generators.

Financial Performance and Capital Raising

Despite operational progress, Admiralty posted a net loss after tax of $4.05 million for the year ended 30 June 2025, widening from a $599,000 loss in FY24. The company’s cash position improved to $1.75 million from just $20,000 a year earlier, supported by a non-renounceable rights issue that raised $7 million before costs. However, net liabilities stood at $13.6 million, reflecting ongoing funding and operational pressures. Admiralty’s financial statements were delayed due to complexities in accounting for the Mariposa Project’s pre-production phase and reliance on audited accounts from joint venture partner Hainan Xinlei Mining Pty Ltd.

Joint Operating Agreement and Accounting Treatment

Under a Joint Operating Agreement with Hainan Xinlei Mining Management Co Ltd, Hainan funds all capital and operating costs of the Mariposa Project up to the point of sale, with Admiralty entitled to 20% of net profits. Admiralty does not consolidate the project’s assets and liabilities on its balance sheet, reflecting the arrangement as a profit share rather than joint control. This accounting treatment required careful consideration and contributed to the complexity of financial reporting during the year.

Marketing Contract and Export Activity

Post year-end, Admiralty’s wholly owned subsidiary secured a purchase contract with global commodities trader Trafigura Pte Ltd to market Mariposa iron ore internationally. This agreement links pricing to global indices and taps into Trafigura’s extensive customer network, underpinning commercialisation efforts. Following the contract, Admiralty completed its second overseas shipment of 58,087 tonnes of iron ore concentrate in April 2026, further cementing its entry into export markets, primarily targeting China.

Operational and Regulatory Risks

The company flagged several risks including operational challenges in mining and processing, reliance on third-party infrastructure in Chile, commodity price volatility, currency fluctuations, and regulatory uncertainties. Admiralty also highlighted the need to secure final environmental approvals for full-scale operations and noted ongoing engagement with Chilean authorities. The arid climate’s impact on water availability and the evolving global steel industry’s decarbonisation efforts add layers of environmental and market risk.

Corporate Governance and Board Composition

Admiralty’s board comprises four directors, including one independent non-executive director, Greg Starr, who chairs both the Audit and Risk and Remuneration and Nomination Committees. The company emphasises strong governance practices aligned with ASX principles, including transparent disclosure, risk management, and shareholder engagement. Executive Chairperson Bin Li and Managing Director Qing Zhong continue to lead strategic and operational initiatives, with the board maintaining oversight of the company’s transition to commercial production.

Auditor’s Qualified Opinion and Going Concern Uncertainty

In.Corp Audit & Assurance Pty Ltd issued a qualified opinion on Admiralty’s financial statements due to unresolved issues with the foreign currency translation reserve, linked to inconsistencies in prior year translation methodologies. The auditor also highlighted a material uncertainty regarding the company’s ability to continue as a going concern, citing net current liabilities exceeding $10 million and dependence on funding arrangements and the successful conversion of convertible notes into equity. Directors remain confident in the company’s strategic direction but acknowledge the need for ongoing capital management.