Atlas Iron issues $2.8m in shares to fully acquire tenements

West Perth-based Atlas Iron Ltd will issue 1.5 million shares to South Perth minerals player Independence Group NL and Western Australian Resources Ltd to acquire three tenements near its Pardoo project in the Pilbara.

At today's closing price of $1.86, the scrip deal will be worth $2.8 million.

The full text of a company announcement is pasted below

Atlas Iron Limited [ASX Code: AGO] wishes to advise that it has reached agreement with Independence Group NL [ASX Code: IGO] and Western Australian Resources Ltd [WAR] to acquire ownership and full mineral rights of tenements E45/2285, E45/2286, E45/2380 and E45/2381 (refer to map attached).

Atlas exercised an option to acquire Iron Ore rights over these tenements in June 2006 and has since discovered the South Limb iron ore deposit. South Limb forms part of Atlas' Pardoo Direct Shipping Ore Project, development of which was recently endorsed by the Atlas Board.

The key terms of the acquisition are:

• Allotment to IGO & WAR of a total of 1,460,000 Atlas shares
• Atlas acquires tenement ownership and all mineral rights
• IGO and WAR relinquish right to claw-back tenement equity and gross sales royalty

Atlas Managing Director David Flanagan said: "We are pleased to acquire the clawback rights and non-Fe rights over these tenements. It will help simplify the ownership structure of these tenements. This will allow us to focus on development of Pardoo in the optimal manner, without the complication of mining tenements held in Independence Group / Western Australian Resources' name and meeting obligations imposed by the claw-back provisions. The acquisition of rights to all other minerals in this prospective area and the removal of a future iron ore royalty liability are added bonuses."