Atlas completes first tranche placement

West Perth-based iron ore explorer Atlas Iron Ltd has alloted the first tranche of a placement, raising $25.7 milllion, ahead of its second tranche placement to raise $59.3 million, subject to shareholder approval.

The second tranche placement will see 41.5 million shares issued to major company investors at the issue price of $1.43 each.

Atlas shares closed today at $1.16.

The cross-market share fall is unlikely to impact on the placement, to go to major investors of the company, which will be discussed at a shareholder meeting scheduled for September 6.

The full text of a company announcement is pasted below

The directors of Atlas Iron Limited [ASX Code: AGO] ("Atlas" or "the Company") are pleased to advise that the Company has now alloted Tranche 1 of its $85 million placement (the Placement). Tranche 1 of the Placement was made up 18 million shares at an issue price of $1.43 per share and raised $25,740,000. Tranche 1 shares were issued predominately to international and domestic institutional and sophisticated investor clients of Hartleys Limited.

Atlas' Managing Director David Flanagan stated "Major shareholders have fully supported the $85 million placement. Our largest shareholder IMC Resources is the largest subscriber to Tranche 2 of the placement and will increase its percentage interest in the Company following subscription for Tranche 2 of the Placement. We are delighted with the overwhelming support for the Placement by our major shareholders and many large international and domestic
institutional investors. Atlas remains on track to be in production of Direct Shipping Iron Ore by September/October 2008, while at the same time progressing towards development of our world class 853 million tonne Magnetite Iron Ore Project.".

The allotment of the 41.5 million Tranche 2 shares is subject to shareholder approval at a meeting of shareholders scheduled for 6 September 2007.

Background Atlas Iron Limited

Atlas owns 100% of the iron ore rights to the Pardoo Project, located 75 km from the Public access port of Port Hedland. The company is on target for the commencement of exporting iron ore by October 2008, shipping at a rate of 1 million tonnes per annum in its first year.

Atlas is working to increase the underlying resource base sufficient to achieve a production rate of 3 million tonnes per annum by 2010. On 24 July 2007 Atlas announced an 853 million tonnes at 37.2% Fe inferred resource on its Pardoo Magnetite Project. Atlas is now moving to complete a Pre-feasibility Study on its Pardoo Magnetite Project by August 2008.