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 1st (ABC News) – A fully loaded iron ore carrier has run aground at Port Hedland. The Iron King carrier is understood to be leased by the Fortescue Metals Group and was carrying 160,000 tonnes of iron ore when the incident happened last night.

The Executive Director of Operations at Fortescue Metals, Graeme Rowley says the carrier had been loaded and was leaving the Port when it appeared to lose steering. “It has gone and hit the edge of the channel and is stuck waiting for the next high tide,” Mr Rowley said.

The carrier was travelling about seven knots at the time and was on its way to China. Mr Rowley says no-one was injured and at this stage there are no reports of any hydrocarbon leaks. He says divers are on their way and will inspect the ship for damage after it has been refloated. The Port Authority will attempt to refloat the carrier at the next high tide. The stricken vessel is blocking two other carriers which were trying to enter the harbour to load.

June 23rd (ABN Newswire) – Pilbara iron ore developer Aurox Resources Limited (ASX:AXO)(PINK:AUOXF) (“Aurox”) has taken a further step in the development of its Balla Balla magnetite project, securing an Agreement with the Port Hedland Port Authority (“PHPA”) for a magnetite shipping facility.

The Agreement, which includes dewatering, stockpiling and ship-loading at the Utah Point Multiuser Facility, is another step toward becoming WA’s first magnetite iron ore producer from Balla Balla, which is located near the Pilbara coast.

Aurox has secured an area at Utah Point (see satellite photo) designed to hold a linear stockpile capable of servicing a shipping operation in excess of 10 million tonnes per annum. The company will install and operate its own dewatering, stacking and reclaiming equipment, with the capacity to feed the PHPA out-loading conveyor system at its design rate of 7,500 tonne per hour.

Aurox Managing Director Charles Schaus said the port agreement was a major milestone for Aurox and its shareholders.

“Access to port facilities is clearly a critical element in the development of a project such as this – without a port there is no project,” Mr Schaus said.

“The signing of this agreement further de-risks the Balla Balla project, and keeps us on track toward first shipment of magnetite concentrate in the second half of 2010,” Mr Schaus said.

Aurox will transport the Balla Balla magnetite concentrate 110 kilometres from the mine site to Utah Point via a buried slurry pipeline, avoiding the traffic, dust and noise associated with a trucking operation. The slurry product will be dewatered at the port with the majority of process water returned to Balla Balla for reuse. However, a small quantity of water will be retained at the port for dust suppression and wash down purposes.

Aurox will prepay a Port Facility Charge which is refunded by the PHPA through a formulated reduction of port utilisation fees against future Balla Balla tonnage shipped over the Utah Point Berth. The term of the Agreement is 15 years.

“Although Aurox will be the biggest user of the Utah Point facility, our operations will have no adverse impact on the Port Hedland Community,” Mr Schaus said.

PHPA Chief Executive Officer Andre Bush stated “We would like to welcome Aurox Resources as a cornerstone partner in Utah Point. Securing Port access removes a critical barrier to entry for Aurox and we’re pleased to facilitate the provision of this important piece of infrastructure.”

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.