atlas iron makes its mark

Miningnews.net
--------------------------------------------------------------------------------
Tuesday, 9 December 2008

WITH its flagship Pardoo mine recently coming on stream and the first shipment of iron ore from Port Hedland late last week, Atlas Iron can lay claim to being the first of a group of iron ore juniors in the Pilbara to move into production and export. Colin Jacoby visited the company’s Pardoo mine and first iron ore shipment.

It has been an action-packed year for Atlas Iron managing director David Flanagan and his team, with the company achieving a number of milestones, including being awarded all key mining contracts, receiving environmental approvals and the start of mining at its Pardoo mine in the Pilbara.

On Friday last week, the company reached another significant high point in its relatively short life with its first shipment of iron ore from Port Hedland.

With temperatures around the mid-30C, a group of journalists, other guests and Atlas employees boarded the Panamax vessel, Great Wisdom, to witness the loading of 65,000 tonnes of iron ore from Atlas Iron’s Connie deposit at Pardoo.

The vessel was docked at fellow iron ore miner Fortescue Metals Group’s Herb Elliot port facilities and was due to depart later that day with the ore to be delivered to a medium-sized Chinese steel mill.

The company gained access to FMG’s port facilities after inking a binding heads of agreement in August – representing the first third-party port access agreement of its kind in Western Australia.

“When I came in here [Port Hedland] four years ago saying we thought we had some iron ore and we wanted to try and export it through this port, what I was told was there was going to be no one exporting iron ore through this port other than BHP, and how wrong they were,” Atlas Iron managing director David Flanagan told guests onboard the Great Wisdom.

“This is not a typical iron ore market that we are selling into in any shape or form and this iron ore to me is the best iron ore on the planet right now.

“It is beautiful and as far as I am concerned it is caviar.

“They have sold iron ore which is not typical of iron ore sold out of the Pilbara historically and they have got a good price for it and they are going to continue to get a good price for it.”

Flanagan said the company had overcome several obstacles and challenges on its path to becoming the Pilbara’s first junior iron ore producer.

“We have successfully developed Australia’s lowest capital cost iron ore mine, establishing a quality resource base, secured environmental approvals, starting mining and we are now shipping our first iron ore – all in record time.

“Most exciting of all, this is just the beginning of the Atlas story,” Flanagan added.

“Our vision is to become Australia’s fourth-largest iron ore producer by early next decade and today marks an important step towards that.”

After disembarking the Great Wisdom, we travelled by bus to the company’s Pardoo mine, 75 kilometres from Port Hedland.

Atlas made its first discovery at Pardoo within nine months of listing on the Australian Securities Exchange in December 2004.

In mid-October this year, the company began mining the Bobby and Connie deposits at Pardoo for direct shipping ore-grade iron ore.

The first shipment of iron ore came from the lower-grade Connie deposit as its low strip ratios, homogenous ore character and proximity to infrastructure provided the best opportunity for Atlas to meet the shipping deadline.

Despite the global slump in demand for iron ore, the company remains confident 1 million tonnes will be exported from Pardoo during its first year of operation, growing to 3Mtpa the following year.

With its second project, Abydos, coming on stream before the end of 2009, Atlas expects combined production of 6Mtpa by 2010, and this is anticipated to ramp up to 12Mtpa by 2012.

On the exploration front, Atlas recently reported a 35% increase in resources at its Ridley magnetite project at Pardoo, which now has an indicated and inferred resource of 2.1 billion tonnes grading 36.5% iron.

Meantime, recent exploration drilling has identified two new prospects at its Abydos project.

Initially identified by surface mapping and rock chip sampling, the deposits were considered to have potential to add 3.5-4.0Mt to the Abydos resource inventory at between 57- 60% iron.

Atlas has also signed a native title mining agreement with the Njamal people with respect to its Abydos project.

The company is also a member of the North West Iron Alliance, a collective of four iron ore juniors with projects in the Pilbara.