26/11/2008 - 12:51

Atlas up on iron ore resource upgrade

26/11/2008 - 12:51

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Shares in Atlas Iron have climbed as much as 14 per cent today on the back of a substantial increase in its Pilbara iron ore deposit, as the board prepares to meet following last week's shocking events.

Shares in Atlas Iron have climbed as much as 14 per cent today on the back of a substantial increase in its Pilbara iron ore deposit, as the board prepares to meet following last week's shocking events.

In a statement today, Atlas said it had increased total resources at its Ridley magnetite project, located at its Pardoo operaton near Port Hedland, by 35 per cent to 2.01 billion tonnes.

A pre-feasibility study on Ridley is currently being carried out, with completion expected next month.

Meanwhile, managing director David Flanagan told WA Business News the Atlas board will meet over the next week-and-a-half to determine the next step after major shareholders IMC Resources and Linq Resources Fund joined forces to oust chairman David Nixon.

Mr Flanagan said Linq was prepared to vote in favour of Mr Nixon's re-election at last Friday's annual general meeting, but was swayed by IMC Resources at the last minute. Together, both shareholders hold some 25 per cent in Atlas.

However IMC chief executive Jyn Baker, who is an Atlas director, disputed this version of events.

"There were no last minute discussions and IMC had no influence on the way Linq voted," she told WA Business News.

Mr Flanagan said the events have yet to sink in.

He suggested that Mr Nixon may have been used as a scapegoat by IMC for the company's falling share price, which has sunk from a high of some $4 this year to its last traded price of 65 cents.

Mr Flanagan said the share price fall is symptomatic of the current global sentiment, rather than the company underperforming.

"[IMC is] possibly looking for a scapegoat but there's probably a broader issue; I suspect if it was someone else up for re-election, they may well have found themselves being opposed by IMC and Linq combined," he said.

"I can't speculate onto what's going on within IMC but clearly they're not getting strategically what they had hoped out of the relationship with Atlas.

"The world sees IMC as prepared to roll what's perceived to be a successful board."

Earlier today, shares in Atlas climbed 9c to a high of 72.5c.

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