re: Ann: New hematite discoveries at Abydos D...
Atlas shows the way with iron discoveries Sarah-Jane Tasker and AAP | January 01, 2009 Article from: The Australian CHINESE interest in Australian iron ore is set for a resurgence, according to emerging miner Atlas Iron, which has announced the discovery of four new direct shipping ore deposits at its Abydos project in the Pilbara.
Managing director David Flanagan -- describing the new find as significant for the company -- said despite talks of falling Chinese demand, he was still fielding interest from the Asian capital.
"There is a big disconnection between what we are reading in the papers and what we are experiencing from China: we are experiencing an increasing interest from China wanting to do business with us.
"The stockpiles in China are running low -- they are destocking quicker than they are restocking -- and we are starting to see the effects of the Government's stimulus package."
Mr Flanagan said the area of the new discoveries, in the north Pilbara in Western Australia, was a prospective and vastly under-explored iron ore province.
"Being passed over in favour of the central Pilbara for the past 30 years has left the province almost entirely untested by drilling," he said.
"Excellent results like these -- adjacent to road and rail and 120km from the world's largest multi-user iron ore port -- are likely to deliver resource growth and a good basis from which to build a significant new iron ore company."
Atlas shares closed 10.97 per cent higher at 86c, following yesterday's announcement after reaching a high of 87.5c in earlier trade.
Atlas now has 17 targets at the Abydos project, which it expects will be its second mine after Pardoo, where mining began in October.
Both projects are near Port Hedland and contain sought-after direct shipping ore, which does not require processing.
Atlas said the new discoveries would contribute to its exploration target for the Greater Abydos region of 100 to 140 million tonnes grading 57 to 60 per cent iron.
"We have big plans but we are not planning on being a huge company, there is a niche for juniors in the Pilbara," he said.
Mr Flanagan said the Abydos project was a treasure trove of easily accessible, outcropping targets.
He said the company aimed to begin exporting from Abydos in the March quarter of 2010.
"We are targeting 12 million tonnes a year by 2012 and that gives us enough economy of scale and the flexibility to go after medium size deposits that no one else wants" Mr Flanagan said.
"Juniors have more versatility to explore and can offer a more boutique service to customers."
Despite many of its peers scaling back amid cancelled contracts and less Chinese demand, Atlas had a positive end to 2008, announcing in November it had sold its first ore shipment to a medium-sized Chinese steel mill.
In early December, Atlas also entered a long-term offtake agreement for 30 per cent of its Pardoo output, its flagship project, and Mr Flanagan said the company would continue to announce offtake agreements as it increased output.
Atlas, he said, was on target to report revised and new resources and reserves across most of its projects this month.
He also did not rule out investigating acquisition opportunities but said any buys had to suit the company.
Mr Flanagan said he hoped Atlas would become a serious company, with a long mine life, but added it was not soliciting any suitors who could be preying on its success.
But he concluded that if a bigger player made a high cash offer, it could gain traction.
AGO Price at posting:
85.5¢ Sentiment: Buy Disclosure: Held
