03/02/2011 - 10:18

Atlas announces 24% resource upgrade

03/02/2011 - 10:18

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Atlas Iron shares have risen 5 per cent, after it announced a 24 per cent increase in its direct shipping ore resources.

Atlas Iron shares have risen 5 per cent after it announced a 24 per cent increase in its direct shipping ore resources.

At 9:50AM Atlas shares were trading at $3.65, up from today's opening price of $3.50.

Atlas' resource statement included upgrades from new deposits McCamey's North and Hercules, resulting in a 30 per cent upgrade for its Wodgina mine in the north Pilbara.

The upgrade takes Atlas' total DSO resources to 254.4 million tonnes with 56.7 per cent iron.

Atlas said Wodgina and its other iron ore operation, Pardoo, had significant upside potential, and development would continue over the next year.

"The growth at Wodgina is continuing, and we're still drilling Hercules with an expectation that it will deliver more tonnes," Atlas Iron managing director David Flanagan said.

"Atlas' near-term growth strategy remains focused on the north Pilbara, which is delivering shareholders very strong cash flows and rapidly increasing resources.

"We will still work at growing our resource base around Newman. It is a world class proven iron ore field and we are optimistic we will have more success over time."

The resource upgrade follows Atlas' December announcement that it would seek an $828 million takeover of Giralia Resources.

Under terms of the offer, Atlas offered Giralia shareholders 1.5 Atlas shares per Giralia share, or 1.33 Atlas Shares and $0.50 cash for each Giralia share.

If successful, the merged group would hold a market capitalisation of more than $2.8 billion, as of close of trade February 2.

The offer closes on February 11.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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