Atlas Iron Limited (ASX:AGO) Direct Shipping Ore Production Target Clarification, Mining At Wodgina Due To Start Early Next Month
Perth, May 18, 2010 AEST (ABN Newswire) - Atlas Iron Limited (
ASX:AGO) is pleased to announce that following final Government approval for its Wodgina DSO Iron Ore Project ("Wodgina"), mining at Wodgina is due to start early next month. Atlas remains on target to commence shipping ore through Utah Point in October 2010 and achieve iron ore exports at a combined rate of 6 million tonnes per annum (Mtpa) from its Wodgina and Pardoo DSO mines in Western Australia by December 2010, growing to a rate of 9 million tonnes by the end of 2011 following the planned commissioning of the Abydos project.
These production targets are broken down as follows (below Notes):
NOTES:
1. Pardoo: Atlas has Proved and Probable Ore Reserves for 3.5 years based on a production target of 2.4Mtpa. The remainder of Atlas' previously disclosed production target is based entirely on an assessment of the potential to convert Inferred Resources and Indicated Resources to Probable Ore Reserves. Following mining of Proved and Probable Ore Reserves, there remains at present insufficient certainty with respect to whether economically mineable mineralisation beyond the Proved and Probable Reserves exists to reliably estimate future production at Pardoo. As such, the production target for Pardoo beyond 3.5 years previously announced should not be used as a basis for investment decisions about shares in Atlas. Atlas is of the opinion that some of the Inferred and Indicated Resources at Pardoo have reasonable prospects for eventual economic extraction (this is the level of confidence that is required to estimate a mineral resource as opposed to an ore reserve. An ore reserve is the economically minable part of an indicated or measured mineral resource under reasonable financial and technical assumptions as of the date of reporting the ore reserve).
2. Wodgina: Atlas has Proved and Probable Ore Reserves for 5.8 years based on a production target of 3.6Mtpa. The remainder of Atlas' previously disclosed production target is based entirely on an assessment of the potential to convert Inferred Resources and Indicated Resources to Probable Ore Reserves. Following mining of Proved and Probable Reserves, there remains at present insufficient certainty with respect to whether economically mineable mineralisation beyond the Proved and Probable Ore Reserves exists to reliably estimate future production at Wodgina. As such, the production target for Wodgina beyond 5.8 years previously announced should not be used as a basis for investment decisions about shares in Atlas. Atlas is of the opinion that some of the Inferred and Indicated Resources at Wodgina have reasonable prospects for eventual economic extraction (this is the level of confidence that is required to estimate a mineral resource as opposed to an ore reserve. An ore reserve is the economically minable part of an indicated or measured mineral resource under reasonable financial and technical assumptions as of the date of reporting the ore reserve).
3. Abydos: Atlas has Probable Ore Reserves for 2.5 years based on a production target of 3 Mtpa. The remainder of Atlas' previously disclosed production target is based entirely on an assessment of the potential to convert Inferred Resources and Indicated Resources to Probable Ore Reserves. Following mining of Probable Reserves, there remains at present insufficient certainty with respect to whether economically mineable mineralisation beyond the Probable Ore Reserves exists to reliably estimate future production at Wodgina. As such, the production target for Abydos beyond 2.5 years previously announced should not be used as a basis for investment decisions about shares in Atlas. Atlas is of the opinion that some of the Inferred and Indicated Resources at Abydos have reasonable prospects for eventual economic extraction (this is the level of confidence that is required to estimate a mineral resource as opposed to an ore reserve. An ore reserve is the economically minable part of an indicated or measured mineral resource under reasonable financial and technical assumptions as of the date of reporting the ore reserve).
--------------------------------------------------------------------DSO Project Proven and Mineral Production Target Date Note Probable Resources Target (See above) Reserve (Annexure 2) (Annexure 1)--------------------------------------------------------------------Pardoo 8.4Mt 27.0 Mt 2.4 Mtpa Ramp up completed by December 2010 1--------------------------------------------------------------------Wodgina 20.8Mt 43.1 Mt 3.6 Mtpa Ramp up(incl Mt Dove) completed by December 2010 2--------------------------------------------------------------------Abydos 7.5Mt 22.3 Mt 3 Mtpa Commencing in 2011 3--------------------------------------------------------------------
Mt Webber
Atlas has previously announced the following production target in relation to Mt Webber:
--------------------------------------------------------------DSO Project Production Mineral Resources Target Commencement Target (See Annexure 2) Date--------------------------------------------------------------Mt Webber 3 Mtpa 43.7 Mt 2012--------------------------------------------------------------
The Mt Webber production target is based entirely on an assessment of the potential to convert Inferred Resources to Indicated Resources, and therefore conversion to Probable Ore Reserves.
Atlas has yet to report an Indicated Resource and/or a Probable Ore Reserve for the Mt Webber project. As such there remains at present insufficient certainty with respect to whether economically mineable mineralisation exists to reliably estimate future production at Mt Webber. As such, the production target for Mt Webber previously announced should not be used as a basis for investment decisions about shares in Atlas. Atlas is of the opinion that some of the Inferred Resources at Mt Webber have reasonable prospects for eventual economic extraction (this is the level of confidence that is required to estimate a mineral resource as opposed to an ore reserve.
An ore reserve is the economically minable part of an indicated or measured mineral resource under reasonable financial and technical assumptions as of the date of reporting the ore reserve).
South East Pilbara and Mid West DSO Projects
Atlas has previously announced the following production target in relation to the South East Pilbara and Mid West DSO Projects:
-----------------------------------------------------------------DSO Project Production Target Target Commencement Date-----------------------------------------------------------------South East Pilbara 14 Mtpa 2014MidWest 3 to 4 Mtpa See below-----------------------------------------------------------------
The South East Pilbara and Mid West production targets are based on an assessment of the potential to convert inferred resources and exploration targets to Indicated Resources, and therefore Ore Reserves. In the case of South East Pilbara it is based on 45.5Mt at 55.4% Fe of announced Inferred Resources and an exploration target exclusive of Inferred Resources of 185Mt to 446Mt at 57% to 60% Fe (see Annexure 3 for exploration targets inclusive of Mineral Resources). In the case of Midwest, it is based on 5Mt at 64.1% Fe of announced Inferred Resources and an exploration target exclusive of Inferred Resources of 25Mt to 35Mt at 60% to 66% Fe (see Annexure 3 for exploration targets inclusive of Mineral Resources). Atlas has yet to report an Indicated Resource and/or a Probable Ore Reserve for the South East Pilbara and Mid West projects. As previously announced, the South East Pilbara production target is subject to completion of feasibility studies, permitting and execution of all necessary infrastructure agrements.
Further, as previously announced, the Mid West production target is subject to the Oakajee port and rail development being completed and Atlas being granted access to this infrastructure, in addition to an assessment of the potential to convert inferred resources and exploration targets to Indicated Resources, and therefore Ore Reserves. The exact timing of this is unknown.
As such, there remains at present insufficient certainty with respect to whether economically mineable mineralisation exists to reliably estimate future production from the South East Pilbara and Mid West Projects. As such, the production targets for the South East Pilbara and Mid West Projects previously announced should not be used as a basis for investment decisions about shares in Atlas.
WODGINA NORTH AND MT WEBBER DRILLING
Atlas is currently drilling at its Wodgina North iron ore prospect. Wodgina North has a previously announced exploration target of 20 to 40Mt at 57% Fe to 60% Fe. In the event that drilling is successful, Atlas will move to fast track feasibility studies, targeting a production expansion at Wodgina during late CY 2011.
Atlas is currently diamond drilling at Mt Webber (Atlas - 70%). This programme, which is expected to be completed during the June 2010 quarter, will provide data on metallurgical characteristics, bulk density, RC-Diamond assay quality and geotechnical parameters. Given the existing RC data set and the uniformity of both the physical shape and grade distribution within the Mt Webber mineralisation envelope, the additional diamond drilling data is expected to allow upgrading of a significant portion of the Wodgina resource from Inferred to Indicated category by third quarter of 2010.
For the complete Atlas Iron announcement, please refer to the following link:
http://www.abnnewswire.net/media/en/docs/62886-ASX-AGO-491460.pdf
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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