July 27 (Reuters) - Fortescue Metals Group Ltd FMG.AX :
* June 2016 quarterly production report
* Qtrly ore mined 47.8 million tonnes versus 43.4 million tonnes in prior quarter
* Qtrly ore shipped 43.4mln tonnes versus 42 million tonnes in prior quarter
* C1 costs are expected to progressively reduce over the course of FY 2017 as productivity and efficiency gains take full effect
* Qtrly c1 costs $14.31/wmt versus $14.79/wmt in prior quarter
* Strip ratios are expected to be slightly higher in the September 2016 quarter and will gradually reduce over the course of FY 2017
* Guidance for FY 2017 has also been released targeting shipments between 165-170mt
* "With net debt reduced to US$5.2 billion, we are fast approaching our initial balance sheet targets"
* Guidance for FY 2017 targets c1 costs in the range of US$12-13/wmt
* Discussions with Vale SA continue and Fortescue remains hopeful that an agreement can be concluded before the end of the year
* "Development planning is underway for replacement of firetail within the next five years"
* Fortescue is exploring the level of external interest in a number of potential lithium projects located within its tenement holdings in the Pilbara
* Options are currently being negotiated for the funding of future vloc payments of $270 million in FY 2017 and US$180 million in FY 2018
* FY 2017 exploration expenditure is expected to be US$40 million
* "Tugs and infrastructure at port hedland are estimated to have a capital cost less than US$200 million"
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