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.

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August 1st (Reuters) – Russian steel maker Evraz Group (HK1q.L: Quote, Profile, Research) has joined forces with China Metallurgical Group Corp (MCC) to gain access to Australia’s vast iron ore reserves and supply Chinese steel mills hungry for the key raw material.

Evraz, part-owned by billionaire Roman Abramovich, said on Thursday it would own 75 percent of a joint venture to develop the Cape Lambert Iron Ore project in Western Australia. MCC will own a quarter of the project, which will ship its ore to China.

 

“Given Chinese demand for the raw materials used in steel production is expected to remain very strong, having something in Australia seems like the right move,” said Vladimir Zhukov, senior mining analyst for Lehman Brothers in Moscow.

 

Global prices for iron ore, a crucial ingredient in steel, have quadrupled in the last five years as China — producer of a third of the world’s steel — devours ever more raw materials.

 

Benchmark prices set by leading miners BHP Billiton (BHP.AX: Quote, Profile, Research) (BLT.L: Quote, Profile, Research) and Rio Tinto (RIO.AX: Quote, Profile, Research) (RIO.L: Quote, Profile, Research) with Chinese buyers rose as much as 96.5 percent this year, the highest jump in a decade.

 

Evraz said in a statement MCC would be entitled to sign an offtake agreement for up to 60 percent of the iron ore produced.

 

Evraz said the Cape Lambert project would be able to produce 15 million tonnes a year of magnetite concentrate. It said the project was in the feasibility stage, but gave no time frame for the start of production or the cost of developing the project.

A potential drawback to the Cape Lambert project is its reliance on magnetite-type ore, which has been largely untested as a reliable source of feed for steelmaking.

 

Traditionally, the Australian iron ore industry has been based on mining higher-grade hematite ores, which currently account for 96 percent of Australia’s total iron ore production.

 

 

 

LONG-TERM INVESTMENT

 

Cape Lambert contains 1.56 billion tonnes of magnetite iron ore resources to internationally recognised Joint Ore Reserves Committee (JORC) standards, Evraz said.

 

“Evraz and MCC’s long-term commitment to the joint development of the project will further unlock the significant value of Western Australia’s mining industry,” Evraz Chairman and Chief Executive Alexander Frolov said through a spokesman.

 

He said the investment represented “an important milestone in the development of magnetite iron ore deposits in Australia”.

 

Cape Lambert Iron Ore Ltd (CFE.AX: Quote, Profile, Research) (CLIO.L: Quote, Profile, Research) this week completed the A$400 million ($378.8 million) sale to MCC of its namesake iron ore deposit, in a region where BHP Billiton and Rio Tinto both have major mining and shipping operations.

 

“Four hundred million dollars is a drop in the ocean for MCC,” said James Wilson, mining analyst for DJ Carmichael & Co in Perth, Australia. “It’s a long-term investment. They have 30 to 50 years of feedstock.”

Cape Lambert paid A$20 million in cash and stock options for the 408 sq km deposit in 2005. Its shareholders approved the sale on Monday following clearance from Australian foreign investment regulators, who have become wary of increased interest by foreign parties in Australia’s resources sector.

 

The Evraz deal is still subject to regulatory approval.

 

Evraz has already agreed to pay $1.5 billion for a controlling stake in another steel group, Delong Holdings (DELO.SI: Quote, Profile, Research), which holds an option to take about 12 percent of Cape Lambert. This had sparked speculation of a pending takeover bid until the sale to MCC was approved.

 

“Evraz already has a foothold in China. There could be synergies with Delong,” Lehman Brothers’ Zhukov said.

 

MCC, which controls assets worth $22 billion worldwide, is also involved in partnerships to develop nickel mines in Australia and Papua New Guinea. In the Pilbara region, it owns 20 percent of the Sino Iron Project near Cape Lambert.

July 20th (Manila Standard Today) – Atlas Consolidated Mining and Development Corp. is close to securing a copper supply agreement with either Japan, China or India within the next six weeks.

“I suspect that within the next six weeks we already have off-take agreements for copper concentrate sales. We’re talking with a lot of companies. I say there is a lot of interest in copper, nowadays,” said Atlas executive vice president Martin Buckingham.

Atlas said it would start commercial production of copper concentrate in its Toledo project in Cebu by mid-August after commissioning its facilities and equipment for actual operation this month.

The initial phase of the project calls for processing of 20,000 metric tons of copper ore daily at the newly rehabilitated Carmen mine.

Atlas is conducting open-pit mining in South Luropan ore body with over 150,000 metric tons on stockpile and about 600,000 MT already exposed.

“With this start-up, our company will begin a historic journey of bringing the Toledo mine to equal, if not surpass, the previous operations of Atlas,” said company chairman and president Alfredo Ramos.

The mine will process 42,000 tons per day and produce up to 130 million pounds of copper, 70,000 ounces of gold, 260,000 oz. of silver, 160,000 dry metric tons of pyrite and 440,000 dmt of iron ore magnetite yearly.

An Atlas subsidiary, Carmen Copper Corp., is operating the Toledo copper mine. A financing partner from Singapore, Crescent Asian Special Opportunity Portfolio, owns nearly 35 percent of Carmen Copper.

May 29 (Iron Ore Daily Post/Press Release) – Red River Resources Limited (ASX code: RVR) is pleased to announce that its 50:50 joint venture partner, Iron Mountain Mining Limited (ASX code: IRM), has commenced a Reverse Circulation (RC) drilling program to test a number of potential magnetite targets identified through surface rock chip sampling and ground magnetic surveys in the region surrounding the Kara magnetite/tungsten mine, 30 kilometres south of the port of Burnie in northern Tasmania.

The program will consist of up to 100 holes to test six target areas, each of which is coincident with magnetic highs on aeromagnetic surveys. Historic drilling has indicated the presence of magnetite at a number of these target areas.

The aim of the program is to define the boundaries of the magnetite pods, their depth potential and their continuity. The program will also test the presence of a high grade cap on the pods, which could potentially be mined as direct shipping iron ore (DSO), overlying a lower grade material which would require beneficiation to produce a saleable magnetite iron ore product.

The drilling program also has a high likelihood of encountering tungsten mineralisation similar to that encountered at Kara.

May 28 (The Sydney Morning Herald) – The iron ore entrepreneur has confirmed a mid-tier resources company is in the works.

 

IT APPEARS Zinifex and Oxiana aren’t the only ones planning to form a global mid-tier miner based in Australia.

Amid whispers in Perth that iron ore entrepreneur Clive Palmer is planning to float a $2billion-plus company, he has confirmed he is working to form a new mid-tier resources play, which could be listed.

“We’re setting up another major international business at the moment,” he told Xchange. “We’re looking at iron ore, steel, oil and gas and base metals such as nickel and other things.”

Palmer added that he had recently visited the US and Papua New Guinea and was looking at major oil and gas projects throughout Asia.

He said he aimed for the new company to own between 10 and 12 projects to fill the void in the mid-tier mining sector brought on by the takeovers of WMC Resources and MIM. Each project could be as big as the 1 billion tonne magnetite parcels he has sold to the Chinese and Australasian Resources in the Pilbara.

May 28 (PR Newswire) – Gemco Minerals Inc. is pleased to announce that through its wholly owned subsidiary company, Firstline Recovery Systems Inc. (Firstline), it has entered into an Exclusive Supply Agreement with A. Teichert and Son Inc., a California corporation doing business as Teichert Aggregates
(Teichert). This contract pertains to the exclusive distribution rights of the minerals known as Ilmenite and Magnetite. These rights allow Firstline to distribute and sell this product as a blast medium in the industrial
abrasive industry in both Western U.S. and Canada. Firstline has been working with Teichert for over a year to finalize this Agreement and is now satisfied with its terms.
Teichert produces Ilmenite and Magnetite as a by-product from its aggregate mining operations. Mr. Ron Stickel, Manager of Business Development and Geologic Services with Teichert, states there is currently
an estimated 25,000 tons of the minerals stored on-site at the plant in Sacramento, California.

The effective commencement date of production is dependent on Firstline first obtaining California Air Regulation Board (CARB) standard approval for the use of these products as a blast medium and then establishing a drying, screening and bagging plant at a nearby location. In conjunction with Teichert, Firstline has initiated the CARB test and Firstline management is negotiating with a U.S. company for a site on which to locate the screening, drying and bagging facility.

The Term of this Agreement is for a period of 5 years with an option for an additional 5 years, with mutual agreement of both parties. As part of the Agreement, Firstline has agreed to minimum tonnage conditions per contract year in order to maintain fixed pricing terms.