hartleys valuation now 5.05

Hartleys:
Date
1 August 2008
ASX Code
AGO
Share Price
266cps
Valuation
505cps
Market Cap (fully diluted)
$762.6m ($892.4m)
Issued Capital (fully diluted)
286.7m shares (335.5m)
Cash (as at 30 June 2008)
$143m
Management
David Nixon (Chairman)
David Flanagan (Managing Director)
David Hannon (Non-Exec. Director)
Jyn Sim Baker (Non-Exec. Director)
Geoff Clifford (Non-Exec. Director)
Top Shareholders
IMC Group Australia (19.9%)
LinQ Resource Fund (6.4%)
Black Rock (6.2%)
Resources Analyst
Andrew Muir
Ph: +61 8 9268 3045
[email protected]
Atlas Iron Limited (“Atlas”, “AGO”, “Company”) continues to advance its
Pilbara iron ore projects with a 68% increase in its hematite resources, a
54% increase in its magnetite resource, a 37% increase in the Pardoo
reserve, an initial reserve for Abydos, and the completion of its
prefeasibility study into the development of Abydos. The resource
upgrade to Ridley magnetite was close to our expectations, though the
new exploration target size has surprised on the upside, and indicates the
potential of the deposit. Likewise the increase in DSO resources is good
news; however, we note that a majority of this increase has come from
lowering the cut off grade, particularly at Pardoo. As drilling continues, we
expect these resources and reserves to continue to increase, with more
updates due before the end of the year.
These positive announcements come on the back of news that the
development of Pardoo has been delayed by approximately two months
due to an appeal to the Environmental Protection Authority. We will be
looking for the finalisation of this appeal by the Appeals Convenor within
the next month, which should pave the way for ministerial approval. We
also expect the signing of an agreement with Fortescue Metals Limited
(“FMG”) that will allow Atlas to use FMG’s berth for exporting Pardoo
DSO during the first year of operation. Other news in the coming months
includes further upgrades to the Ridley resource, the completion of the
Ridley PFS and partner selection, as well as further DSO upgrades and
the commencement of mining at Pardoo. We continue to rate Atlas Iron
Limited as a Speculative Buy.