07/04/2008 - 10:48

Altas Iron acquires strategic interest in Warwick Resources

07/04/2008 - 10:48

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West Perth-based Atlas Iron Ltd has obtained a 19.9% interest in emerging iron ore explorer Warwick Resources Ltd, acquiring shares in Warwick at 0.23 cents via a share placement and off market purchase for a consideration of approximately $4.3 million.

West Perth-based Atlas Iron Ltd has obtained a 19.9% interest in emerging iron ore explorer Warwick Resources Ltd, acquiring shares in Warwick at 0.23 cents via a share placement and off market purchase for a consideration of approximately $4.3 million.

 

The full announcement is pasted below:

 

Atlas Iron Limited is pleased to announce it has acquired a strategic interest in ASX listed iron ore explorer, Warwick Resources Limited.

At the invitation of Warwick, Atlas has agreed to acquire shares in Warwick at 23 cents per share via a combination of a share placement and off market purchases for a consideration of approximately $4.3 million, providing a total interest in Warwick of 19.9%.

Atlas sees this acquisition as a strategic investment in Warwick, a Pilbara iron ore explorer, and Atlas intends to maintain its strategic shareholding at this 19.9% level for the foreseeable future.

At the request of Warwick, Atlas has nominated Tony Walsh as a non executive director of Warwick.

Tony Walsh is a Chartered Accountant with over 20 years experience in the financial services and resource industries.

Mr Walsh is Company Secretary of Atlas and 2 other ASX listed resource companies and a director of an AIM listed resource company.

Mr Walsh previously worked at the Australian Stock Exchange in Perth for 14 years and Ernst & Young in Perth and Dublin for 5 years.

"Warwick has an exciting land position, a terrific management team and significant potential to prove up considerable resources on their Pilbara tenements.

We look forward to watching Warwick grow its resources and advance towards production in the years ahead." commented Atlas Managing Director, David Flanagan.

"This strategic investment in Warwick provides Atlas shareholders great leverage to a land position in the Pilbara that is highly prospective for iron ore and Atlas intends to maintain its strategic shareholding at the 19.9% level for the foreseeable future," Mr Flanagan added.

As part of the strategic alliance between Atlas and Warwick and subject to all necessary regulatory and Warwick shareholder approvals, whilst Atlas remains a holder of not less than 10% of the issued capital of Warwick, Atlas and Warwick have agreed

  • Atlas will receive a first right of refusal to acquire any sale interest in the tenements or assets which are owned by Warwick upon disposal (in either whole or part) by Warwick.
  • Atlas will retain a right to maintain its shareholding if Warwick increases its share capital.
  • An area of influence to work together to consolidate and grow a significant iron ore resource position.

Warwick Resources has agreed to place shares at 23 cents per share to Atlas in 2 tranches (the Placement) made up of

  • 11,400,000 shares out of Warwick's 15% capacity and
  • The balance, subject to shareholder approval at a meeting of shareholders expected to be held in mid-May 2008, providing a total interest in Warwick of 19.9%.
  • Tranche 1 of the Placement is expected to be completed by 11 April 2008.

 

Background:

Warwick Resources has a diverse asset portfolio near Newman in the Pilbara region and the company's projects have a combined area of 1,700km².

The company has rapidly identified significant iron ore targets on its existing tenure since listing on ASX in February 2007.

In addition, the Company has recently acquired further iron ore prospective ground and through its relationship with Peak Drilling, the company has access to drill rigs to aggressively explore its projects.
On completion, Warwick will have cash reserves in excess of $10 million which shall be applied towards the exploration and development of its iron ore projects

Atlas Iron Ltd is targeting initial production and export of 1 million tonnes of direct shipping grade (DSO) iron ore from its Pardoo Project (75km east of Port Hedland) during the first 12 months of operations with production growing to 3 million tonnes per annum by 2010.

Environmental approvals remain on track for commencing production of DSO iron ore from its Pardoo Project by August 2008.

Together with the development of the Abydos DSO Project (120km south of Port Hedland) in late 2009, Atlas is targeting production of 6Mtpa of DSO by 2010.

 

 

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