FreightLink cash flow concerns despite iron ore deal

<p>FreightLink is still looking for a majority owner despite progress in negotiations to add several new bulk trades to its Adelaide-Darwin rail operation. </p> <p>Attempts in May to find an equity partner willing to pay $360m for a majority stake have been unsuccessful despite subsequent deals to haul manganese ore and iron ore to the port of Darwin.</p> <p>Canadian company SXR UraniumOne was given approval this month to begin work on its $48m Honeymoon uranium mine in South Australia. </p> <p>Freightlink has begun a contract to haul about 600,000 tonnes of manganese ore from Bootu Creek each year and is expected to finalise a deal this week to carry up to 1.5m tonnes of iron ore from Frances Creek from early next year.</p> <p>Other possible users, including contracts to haul up to 100,000 tonnes of copper and 120,000 ounces of gold concentrate each year from the second half of 2008, could more than quadruple FreightLink’s minerals volumes to about 2m tonnes at the end of next year.</p> <p>But FreightLink’s owners remain concerned about its future.</p> <p>Macmahon Holdings has flagged its intention to offload its share of FreightLink after writing off the stake by $19.9m in its net profits in 2005&#4706. </p> <p>FreightLink’s annual profit results have consistently fallen further into the red since beginning in 2004, with the last available financial results showing a $53m loss in 2004&#4705.</p> <p>Macmahon managing director Nick Bowen has expressed uncertainty about FreightLink’s cash flow and has said publicly that Macmahon remained a &#8220very willing seller&#8221 of its share of the rail operator.</p> <br />