Bank of America Merrill Lynch has a “buy” rating on mid-tier iron ore producer Atlas Iron, despite a tumbling iron ore price.
The company has reiterated June quarter sales guidance of 2.2 million tonnes, which implies full-year fiscal 2013 guidance of 7.4 million tonnes.
Iron ore has fallen by 30 per cent since February, but Merrill believes Atlas is well-placed to weather the storm.
The company is targeting annual production of 12 million tonnes by the end of calendar 2013 and capital intensity to date has been low and funding for the ramp-up is sorted.
Atlas has also secured key infrastructure via ports and truck haulage.
AGO Price at posting:
76.5¢ Sentiment: Buy Disclosure: Held
