ATLAS NORTHERN PILBARA PROJECTS LOCATION PLAN
Perth, May 26, 2009 AEST (ABN Newswire) - Atlas Iron Limited (ASX:AGO) is pleased to report on the interim findings of its Feasibility Study assessing the proposed development of its Wodgina DSO Project (Atlas 100% Fe rights), located approximately 100km south of the port of Port Hedland in the Pilbara region of Western Australia.
HIGHLIGHTS
- PRODUCTION COMMENCING AT 2MTPA IN Q1 2010 GROWING TO 3MTPA IN Q2 2010
- CAPEX START- UP COSTS OF ONLY A$9.5M
- GLOBALLY COMPETITIVE OPERATING CASH COSTS IN THE RANGE OF A$37-A$45 / TONNE
- ENVIRONMENTAL IMPACTS ASSESSMENT WELL ADVANCED
- CONCEPTUAL PIT OPTIMISATION STUDIES INDICATES POTENTIAL PRODUCTION OF 20Mt AT >58.2% Fe AND 0.07% P OVER AN INITIAL 7 YEAR MINE LIFE
- +15 YEAR PROJECT LIFE TARGETED
- WODGINA PROJECT ONLY 100KM FROM PORT HEDLAND PORT
Atlas is pleased to report on interim results from its Feasibility Study for the Wodgina DSO Project. On the strength of the grade and ore quality, remarkably low capital costs driven by the Talison access agreement, low environmental impact, proximity to port and globally competitive cash operating costs, Atlas confirms that the Wodgina DSO Project will be the next mine development for the Company, with production targeted to commence in January 2010.
"Wodgina is looking fantastic. Low strip ratios, low capital and operating costs, minimal environmental impact and close to the world's largest iron ore export port, present a huge opportunity for Atlas shareholders. Wodgina is going to give us economies of scale, significantly improving our competitive advantage on cost and quality for many years to come," commented Atlas Managing Director, David Flanagan.
"The results produced by our exploration team to date have been nothing short of spectacular. With their continued success at Wodgina, Abydos, Mt Webber and Pardoo, we are increasingly confident of our ability to reach export tonnages of 12Mtpa in 2012."
Interim Feasibility Study Outcomes
The Wodgina Feasibility Study is being project managed by Atlas' consulting engineers, Engenium, utilising specialist sub-consultants and Atlas personnel including:
----------------------------------------Resource Estimation Atlas Iron LimitedSite Layout Atlas Iron LimitedMining Study Atlas Iron LimitedIron Ore Marketing Atlas Iron LimitedInfrastructure Engenium / Pacer Environmental Permitting Outback Ecology----------------------------------------
Development Schedule
The Company's environmental impact assessment is well advanced with specialist studies having begun in early 2009. Preliminary survey results have revealed no significant environmental impediments. In light of this and the proximity of the Wodgina DSO Project to the existing permitted Wodgina Mine and infrastructure, the Company believes that all statutory approvals will be achieved in a timely manner.
Negotiations are well underway with the Native Title Claimant group for the Wodgina DSO Project area, the Kariyarra people. Consistent with Atlas' values including 'leaving a footprint', we look forward to a mutually rewarding relationship with the Kariyarra people and a positive legacy.
As a result of access to the existing Talison mine infrastructure at Wodgina, the commencement of mining operations is relatively simple with only limited new construction works required to commence operations. New construction works include;
- Great Northern Highway intersection upgrade,
- Mine access road upgrades,
- Pit - Ore Pad mine haul road, and
- Crushing and Screening Plant modifications to facilitate iron ore sampling and stockpiling.
Subject to the mine approvals process progressing according to the expected statutory guidelines, the Company plans to commence shipping by the start of the second quarter in 2010. The Company will be targeting an initial production rate of 2 million tonnes per annum (Mtpa), growing to 3Mtpa shortly thereafter.
Infrastructure
Atlas has previously announced its agreement with Talison, the owners of the existing Wodgina Tantalum mine infrastructure, to use that infrastructure to support Atlas' planned iron ore mining and processing objectives. With the continued exploration success at Wodgina, Atlas is now well positioned to take advantage of the infrastructure access agreement. The infrastructure agreement greatly simplifies the mines approvals process and start-up activities. Furthermore, it significantly reduces the capital cost to commence mining operations. Infrastructure included within the Talison agreement includes;
- Crushing and Screening plant capacity,
- Power access through the gas fired power station and gas feed pipeline,
- Mine camp facilities,
- Office and communications infrastructure,
- Water / power distribution, and
- Roads and stockpile facilities.
The Talison infrastructure agreement also provides for the opportunity to expand existing infrastructure to support both Atlas' and Talison's activities over time, which will likely well suit Atlas' proposed production expansion objectives over time, utilising the Wodgina mine as a central hub for broader activities at its Abydos and Mt Webber DSO Projects.
Preliminary engineering works have led to the development of a capital cost schedule to establish the Wodgina DSO Project. Interim Feasibility results have determined that the cost of project establishment, inclusive of pre-strip activities (exclusive of working capital) will be approximately AUD$9.5 million +/- $2 million. Significant contributions to project costs include the intersection with the Great Northern Highway, mine pre-strip activities and the required modifications to the crushing and screening plant to facilitate iron ore sampling and stockpiling.
Engenium and Pacer Engineers have conducted a detailed assessment of the existing crushing and screening plant at Wodgina and determined that it is both suitable and of sufficient capacity (with only relatively minor modifications) to support Atlas' proposed operations. Modifications are limited to screen deck changes, the addition of iron ore sampling equipment and modifications to divert the iron ore feed to an alternate stockpiling location.
Operations
The preliminary mining study utilising existing Inferred Resources of 42Mt at 56.3% Fe (Table 1), has delivered robust conceptual pit tonnages with very low strip ratios (nominally 1:1, waste to ore tonnes at a 56%Fe waste cut-off). With mining commencing at the Anson pits, mine scheduling indicates that a highly marketable product targeting at 58% Fe, < 5.5% SiO2 and <2.0% Al2O3 and <0.1% P product can be delivered to the crushing and screening plant shortly after mine commencement, with production commencing at approximately 2Mtpa. Following commissioning of the new Utah Port facility in Port Hedland, production will grow to 3Mtpa during the second quarter of 2010. It is anticipated that existing resources are sufficient to deliver conceptual production of 20Mt over a targeted 7 year mine life at the 58% + Fe grade. Subject to additional exploration success at the Company's Wodgina, Abydos and Mt Webber Projects, the Company is targeting a mine life in excess of 15 years.
With access to Talison's existing Wodgina mine infrastructure and the new Utah berth, commissioning and production costs are minimised given the inherent efficiencies associated with the available fixed infrastructure. Mine scheduling and costing across the conceptual pits have determined cash operating costs (excluding State Royalties) will be in the range of AUD$37 to $45 per ore tonne (on a wet basis) over the targeted life of mine.
Haulage to port will utilise quad-configuration road trains, via the Great Northern Highway, which is approximately 5kms to the east of the existing mine infrastructure.
Exploration
Exploration is continuing at the Wodgina DSO Project, including the infill of existing resources and the Company is confident of the project's capacity to deliver significant resource growth over time and of the project's potential to have a mine life of over 15 years.
A new resource estimation, incorporating the closer-spaced infill drilling which will bring Anson to JORC Indicated category, is on track to be delivered in June 2009. The Company is on target to develop the Wodgina DSO Project's first Reserves during July 2009.
TABLE 1 - WODGINA PROJECT RESOURCES
Wodgina Resource Summary - May 2009------------------------------------------------------------------------Resource Kt Fe CaFe SiO2 Al2O3 P S LOI DensityClassification (%) (%) (%) (%) (%) (%) (%) (g/cm3)------------------------------------------------------------------------Inferred 42,730 56.3 61.9 7.0 2.3 0.07 0.05 9.1 3.0------------------------------------------------------------------------
Note: Resources quoted at >53% Fe cut-off grade.
CaFe is calcined Fe calculated by Atlas using the formula (Fe%/(100-LOI))*100
COMPETENT PERSONS STATEMENTS
Mineral Resource Estimation - Wodgina
The information in this report that relates to resource estimate results is based on information compiled by Mr Hamish Pescini who is a member of the Australasian Institute of Mining and Metallurgy. Hamish Pescini is a full time employee of Atlas Iron Limited. Hamish Pescini have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they have undertaken to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Hamish Pescini consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.
References to Exploration/Production Targets and Potential
While the company remains optimistic it will report reserves in the future from its Wodgina DSO Project, any discussion in relation to exploration targets, resource potential, conceptual pit tonnages, reserves or 'ore' is only conceptual in nature, as there has been insufficient exploration to define an Ore Reserve at the company's Wodgina DSO Project, and it is uncertain if further exploration or mining studies will result in the determination of a Reserve.
About Atlas Iron Limited
Atlas Iron Limited (ASX:AGO) is an independent Australian iron ore company, mining and exporting Direct Shipping Ore (DSO) from its operations in the Northern Pilbara region of Western Australia. Since listing on the ASX in late 2004, Atlas has grown rapidly and is now a member of the ASX100 index.
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