FMG posts $2.1m operating loss

Iron ore developer Fortescue Metals Group Ltd has posted an operating loss after income tax of $2.1 million for 2006, up from 2005's operating loss of $4.5 million.

The company, which today released its annual financial report on the ASX, recorded net assets for 2006 of $137.1 million, up 131 per cent on 2005 figures, with total assets increasing by $72.7 million to $221 million in 2006.

The release of the report closely follows news of a $536.66 million equity deal with US-based Leucadia National Corporation.

Fortescue said in its report that the increase in total assets comprised primarily of increases in exploration and evaluation expenditure, partially offset by lower cash balances of $18 million held at June 30 2006.

Its full year accounts also included details of directors salaries with chief executive Andrew Forrest on $110,000, executive director of operations Graeme Rowley on $380,000 and executive director commercial Russell Scrimshaw on $250,000.

In regards to directors' interests in the FMG, Mr Forrest held 102.3 million ordinary shares at June 30 2006, accounting for 95 per cent of total directors interests in the company. At today's closing share price of $9.84, his stake represents $1.01 billion.

No directors held options during the financial year.

Late yesterday, Fortescue announced it has signed the $US400 million ($536.66 million) equity deal with Leucadia National Corporation.

Leucadia agreed to pay $US300 million ($402.5 million) for a placement of 26.4 million Fortescue shares or nearly 10 per cent of the company.

Fortescue said the gave its shares a valuation of $15 each.