Perth, July 25, 2008 (ABN Newswire) - Atlas Iron Limited [ASX:AGO] is pleased to report a significant upgrade to the company's Direct Shipping Ore (DSO) resource and reserve position as at July 2008.

HIGHLIGHTS

68% INCREASE IN TOTAL DSO RESOURCES TO 39.1MT AT 56.3% FE

174% INCREASE IN TOTAL DSO RESERVES TO 14.8MT AT 57.7% FE

FIRST RESERVE FOR THE ABYDOS PROJECT AT 7.4MT AT 58.1% FE

37% INCREASE IN PARDOO RESERVES TO 7.4MT AT 57.3% FE

This release "DSO Resource and Reserve Summary" is to be read in conjunction with the "DSO Resource and Reserve Update" both lodged with the ASX on the 25th July 2008.

"This is a great result. The team has done a great job and this provides a strong basis from which to further grow our resources and reserves by the end of the year." commented David Flanagan, Atlas' Managing Director.

DSO Resources - ALL PROJECTS

Atlas has updated the resources at both its Pardoo and Abydos Project areas. Resource estimation was completed in conjunction with either Golder Associates Pty Ltd or CSA Global, resulting in classifications in the Measured, Indicated and Inferred categories. The resources are further described in the table below.

Atlas Resource Table - July 2008
------------------------------------------------------------
Project Resource        Kt  Fe   SiO2 Al2O3 P   S   LOI CaFe 
Area    Classification      (%)  (%)  (%)  (%) (%)  (%) (%)
------------------------------------------------------------
Pardoo  Measured      2,153 56.6 6.7  2.5 0.17 0.02 9.1 62.3
        Indicated    12,786 56.4 8.0  1.7 0.12 0.01 8.6 61.7
        Inferred      9,112 55.4 8.3  2.4 0.09 0.03 8.9 60.8
Abydos  Measured         -   -    -    -    -    -   -   -
        Indicated     9,540 57.3 6.6  1.6 0.05 0.01 9.4 63.2
        Inferred      5,590 56.1 7.4  2.3 0.06 0.02 9.3 61.9
Total   Measured      2,153 56.6 6.7  2.5 0.17 0.02 9.1 62.3
        Indicated    22,326 56.8 7.4  1.7 0.09 0.01 8.9 62.3
        Inferred     14,702 55.7 8.0  2.4 0.08 0.03 9.1 61.2
------------------------------------------------------------
Grand Total          39,181 56.3 7.6  2.0 0.09 0.02 9.0 61.9
------------------------------------------------------------

Note:
Pardoo resources quoted at >53% cut off grade
Abydos resources and Connie Deposit quoted at >50% cut off grade
CaFe% is calcined Fe calculated by Atlas using the following formula (Fe%(100-LOI%))*100

DSO RESERVES - ALL PROJECTS

The updated reserves for the Pardoo Project were estimated based on the Indicated and Measured resources defined by either Golder Associates Pty Ltd or CSA Global Pty Ltd, and as such the reserves are either in the Proved or Probable categories. Details of the updated reserves are outlined in the table below:

Atlas DSO Reserves Table (Proved and Probable) - July 2008
------------------------------------------------------------
Project Resource        Kt  Fe   SiO2 Al2O3 P   S   LOI CaFe 
Area    Classification      (%)  (%)  (%)  (%) (%)  (%) (%)
------------------------------------------------------------
Pardoo Proved        1,250 57.4 5.9 2.1 0.16 0.02 9.0 63.1
       Probable      6,137 57.2 6.8 1.8 0.12 0.01 8.6 62.6
Abydos Probable      7,428 58.1 5.6 1.5 0.05 0.01 9.5 64.1
Total  Proved        1,250 57.4 5.9 2.1 0.16 0.02 9.0 63.1
       Probable     13,565 57.7 6.1 1.6 0.09 0.01 9.1 63.4
------------------------------------------------------------
Grand Total         14,814 57.7 6.1 1.7 0.09 0.01 9.1 63.4
------------------------------------------------------------

Note:

Pardoo Reserves defined at a 55% Fe cut-off grade.
Connie Reserve (Pardoo), Channel Iron Deposit (CID), calculated at a 50% cut-off grade.
Abydos Reserves defined at a 54% Fe cut-off grade.

Background - Atlas Projects

Atlas Iron Limited is working to complete its Pardoo Project environmental approvals and commence shipping of direct shipping grade (DSO) iron ore from December 2008. The Company is targeting export of 1 million tonnes of DSO iron ore during the first 12 months of operations with production growing to 3 million tonnes per annum by 2010, coincident with the completion of the Port Hedland Port Authority Utah Point export facility. Together with the development of the Abydos Project the company is targeting production of 6Mtpa of DSO from 2010.