Production, cash reserves up, Atlas says

WA-based iron ore miner Atlas Iron says production from its mines is rapidly increasing, causing cash reserves to increase 58 per cent since September.

Atlas' cash reserves have soared from $108 million on September 31 last year, to $171 million today, with managing director David Flanagan saying the company's mines were delivering strong cash flows.

"Increased exports, reduced costs and strong iron ore pricing have delivered a significant increase in cash reserves ," the company said.

Atlas also revealed that it was in discussions with Indian miner NDMC regarding the Australian company's Ridley magnetite project, but no agreement has yet been reached.

Atlas Iron, which controls the Pardoo and Wodgina mines in the Pilbara, said it had exported 1.42 million tonnes of direct shipping ore during the December 2010 quarter.

It said it was on target to increase shipments to about 1.5 million tonnes of ore in the three months to March 31.

Production was ramped up from the 0.31 million tonnes of ore shipped in the three months to September 30.

Atlas said it received costs of about $45 per tonne for ore shipped in the December 2010 quarter and was on its way to achieving between $40 and $43 per tonne from January 2011 onwards.

Shares in Atlas closed up four cents at $3.01.