August 7th (The Sydney Morning Herald) – Atlas Iron Ltd has entered into a joint-venture agreement with Fortescue Metals Group Ltd (FMG) for Atlas’s Abydos project in Western Australia’s Pilbara region.

The joint venture covers a tenement over which Atlas owns the iron ore rights. Atlas also said that it was the first company to seal a port access deal with Fortescue for its new Port Hedland iron ore export terminal. “The primary focus of the joint venture is to define and develop extensions to the FMG Glacial Valley magnetite deposit, (part of the Abydos project)” Atlas said in a statement.

“FMG may earn a 60 per cent joint-venture interest in the iron ore rights by delineating inferred resources of iron ore within the tenement,” Atlas said. It also said FMG may earn a further 15 per cent joint venture interest in the iron ore rights by completing a pre-feasibility study on the mining of iron ore within the tenement.

A further 12.5 per cent joint venture interest may be earned in the iron ore rights by completing a definitive feasibility study on the mining of iron ore within the tenement. Atlas has converted a memorandum of understanding (MOU) into a binding heads of agreement to use Fortescue’s port facilities for the initial period of production from its flagship Pardoo project, about 100km from Port Hedland.

Pardoo commences production in October, with exports to follow in December.

“This is a ground-breaking third-party port access agreement, the first of its kind in Western Australia,” Atlas managing director David Flanagan said. “We now look forward to building on our association with FMG as we commence development of our second iron ore project, 120km south of Port Hedland at Abydos.”

Atlas is expected to negotiate a rail haulage agreement with FMG to transport ore from Abydos to port. It is also likely to use road haulage to get its product from Pardoo to port. Mr Flanagan flew from the Diggers and Dealers Conference in the mining town of Kalgoorlie to Perth to finalise the negotiations. He returned to the popular conference to make a presentation.

He told delegates that Atlas had not yet committed to offtake agreements because it planned to sell about 60 per cent of product on the spot market to capitalise on high prices. “Every other day we receive an offer … with a base case that we would achieve a premium to the benchmark price,” he said.

He said Atlas was spending between $1.2 million and $1.5 million on exploration each week. The only other company that has an MOU with Fortescue is BC Iron Ltd.


August 4th (Mineweb) – The North West Iron Ore Alliance has further outlined its case for the establishment of third party infrastructure access in the Pilbara, today announcing it has submitted responses to the recent draft recommendations from both the Pilbara Rail Access Interdepartmental Committee (PRAIC) and the National Competition Council (NCC).

The Alliance announced today (Monday) that it intended to play an active role in shaping the framework for a third party access regime by participating in the PRAIC and NCC consultation processes, and remained strongly committed to working towards a constructive solution with other stakeholders in the Pilbara. 

Independent Chair of the North West Alliance, Ms Megan Anwyl, said access to existing infrastructure remained a fundamental necessity to the formation of a sustainable, viable and successful junior iron ore industry in the Pilbara.

“We believe that BHP Billiton and Rio Tinto have a legal obligation to allow rail haulage to third parties under their various State Agreements, and that this would lead to a healthy diversification of the iron ore industry in the Pilbara and better social and economic outcomes for its residents and the nation as a whole,” she said. 

“If fair and equitable infrastructure access is not granted, some mine sites would not be financially viable, or production could be severely limited due to the environmental, social, financial and potential licensing restrictions relative to the trucking of iron ore,” Ms Anwyl continued.  “Further, the State Government has a clear policy preference towards rail over road transport.”

“The four members of the North West Iron Ore Alliance – Atlas Iron, BC Iron, Brockman Resources and Ferraus – therefore have an obligation to their shareholders to negotiate a workable solution for the transportation and shipment of their ore through the Pilbara,” she commented.  “We have been very encouraged by the draft PRAIC regime and NCC recommendation, and look forward to providing further input towards the final outcomes through the responses we have submitted.” 

Ms Anwyl said one of the key PRAIC recommendations the Alliance had made was to support the need for the appointment of a strong Regulator to ensure a timely, effective and equitable access regime.

“It is important that the interests of all parties are balanced, and that there is an independent body to ensure that this balance is maintained,” she said.  “The North West Iron Ore Alliance therefore supports the need for a strong Regulator who would be responsible not only for approving such factors as the pricing and costing of the rail haulage regime, as but also for key issues such as capacity and service level principles, safety principles and capacity modelling principles.” 

The North West Iron Ore Alliance was formed in 2007 to support the development of a junior iron ore sector in the Pilbara. The member companies – Atlas Iron, BC Iron, Brockman Resources and FerrAus – have agreed to cooperate on issues such as infrastructure development and access, statutory approvals and community development. 

Collectively the members of the North West Iron Ore Alliance have the potential to deliver over 50 million tonnes of iron ore per annum by 2014, generating approximately $165 million in State royalties per annum.

June 16th (WA Business News) – West Perth-based Atlas Iron Ltd has completed another hurdle for its Pardoo iron project in the Pilbara, which is targeting first ore exports in October. The company announced it had won approval from the Environmental Protection Authority which deemed that any environmental impact would be confined to the project area.

Of particular concern to the EPA was that the mining area was within the De Grey River water reserve which is classified as a priority one source protection area. “The water reserve contains the current and future domestic water supply borefields for the township of Port Hedland. The proposal has the potential to impact groundwater through dewatering and discharge of excess water,” the EPA said in its bulletin released today.

However the EPA found that the hydrogeological modeling indicated that due to the nature of the orebodies and associated aquifiers in the project area, any impact associated with dewatering would be confined to the immediate area.

“This is the culmination of two years of hard work, a major milestone in our development and an endorsement of our approach to environmental management,” Atlas managing director David Flanagan. “We would like to acknowledge the EPA and all the other Government and non- Government agencies for their assistance to date.”

Atlas is targeting iron ore exports at an initial rate of 1 million tonnes per annum during its first 12 months of operations of the Pardoo Project. Together with additional export tonnages from its Abydos Project, the company is targeting exports of 6 million tonnes by 2010 and 12 million tonnes by 2012.

June 1st (The West) – Buoyed by Atlas Iron’s successful capital raising, fellow iron ore junior Brockman Resources was last night working on an up to $100 million book-build for its billion-tonne Marillana project in the Pilbara.
Brockman put its shares in a trading halt yesterday morning, with the stock sitting at $2.70, only 30¢ below its record close three weeks ago.
The timing of the capital raising is opportune given that a year ago Brockman was trading as low as 35¢.
It is understood Patersons Securities was arranging a book-build of existing shareholders and new investors to raise between $75 million and $100 million.
The book-build should be finalised by late next week, with the placement price expected to be at a discount of between 10 and 20 per cent to Brockman’s last trade. Shareholders are likely to have to approve the capital raising.
It is unclear whether Brockman’s board, led by former Arthur Andersen Perth managing partner Ross Norgard who owns $47 million worth of scrip, will participate in the capital raising.
Atlas raised $100 million at $2 a share — a 10 per cent discount to its prevailing price — through rival broker Hartleys a month ago.
The success of the raising proved the market’s appetite for up-andcoming iron ore producers, despite the continued upheaval on global money markets.
Participants in the raising have been rewarded handsomely, with Atlas shares closing at $4.08 yesterday. Atlas is more advanced than Brockman and expects to be producing first iron ore from its Pardoo project east of Port Hedland later this year.
Brockman is raising the funds to finance a feasibility study for Marillana, which contains 1.1 billion tonnes grading an average 44.2 per cent.
Brockman is eyeing first production next year.

May 24 (Steel Guru) – Atlas Iron Ltd will cross a major threshold in its development when it announces an offtake deal in the next few weeks. The deal could be for one or more arrangements to buy some or all of Atlas’ ore, possibly by the end of the month and it marks a milestone in the company’s transition from iron ore explorer to miner and exporter.

Mr David Flanagan MD of Atlas said that the company had been approached with about 100 offtake offers, half of which could be considered seriously. He added that these included proposals from about 35 Chinese majors.

Mr Flanagan told journalists after the company’s annual general meeting in Perth that “These would either be massive conglomerate trading companies or massive steel mills. The balance are from Malaysia, Korea, Taiwan, the Middle East and some Indian groups, who are looking to develop a project in the Pilbara that they can then export into China.”

Mr Flanagan said that Atlas had tried to include as many shareholders as possible, but given volatile financial markets the best way to raise fund was through institutional investors and they had continued to buy shares.