Atlas shares jump on iron ore hits (updated)

Shares in Atlas Iron Ltd surged more than 15 per cent after reporting exploration results from its Pardoo and Abydos iron ore projects, which are located near Port Headland.

Shares in Atlas Iron surged 8 cents to 60 cents this morning but have since eased to 55, up 7.8 per cent, or 4 cents.

Atlas said recent mapping of its Abydos project had highlighted two areas with extensive surface iron enrichment. The areas, Pincunah North and Strelley Gorge, are adjacent to the undeveloped BHP Billiton's iron ore deposits.

The iron ore explorer said initial rock chip samples from the Strelley Gorge trend returned highly anomalous results.

Atlas said recent drilling at Pardoo had increased its confidence in the reource and it had indentified a number of likely resource extensions.