rail costing, page-3

Back In September last year Atlas Iron Executive Director Mark Hancock at a BA-ML conference in Ney York goes on to say Atlas Iron is poised to appoint an investment bank to help find an equity partner for its early stage McPhee Creek mine, in a deal which could value the asset at up to A$700 million.

“We’re looking to get partners in at a project level,” said Atlas Iron Executive Director Mark Hancock

“Roy Hill’s done that well with their investors like Marubeni, Posco, and China Steel…something along those lines would be attractive to us,” Mr. Hancock said, referring to the 10 billion Australian dollar (US$9.2 billion) Roy Hill iron ore project led by Hancock Prospecting Pty Ltd, which is controlled by Australia’s richest person, Gina Rinehart.

Mr. Hancock said “any partnership would be around the 30% level.” He added that initial interest in the McPhee Creek project has come from Asian trading houses and steel mills, and hopes that a partner can be selected by early 2014. McPhee Creek has a resource of around 250 million tons, and was acquired when Atlas bought Giralia Resources for A$828 million in late 2010.

Any deal would likely be beneficial for existing shareholders.

Points of interest:

*Hopes that a partner can be selected by early 2014

*Value the assest at A$700 miilion

*A few weeks ago in a conversation with Ken.B I put the question to him whether the JV partner would be needed before or after a rail deal was finalised. He basically said to me the rail deal first. That would be the best way to maximise the JV entry price amongst other benefits.

So they hope the partner can be selected early 2014 yet want the rail deal before the JV selection and like the way “Roy Hill’s done”