AGO - Atlas Iron

[agro]

news just out:

August 2008
ABYDOS MAGNETITE JOINT VENTURE WITH FMG
Atlas Iron Limited [ASX Code: AGO] is pleased to announce that it has today signed a Joint Venture Heads
of Agreement with Fortescue Metals Group Limited (ASX Code: FMG) for a joint venture over ELA45/2310, a
tenement over which Atlas owns the iron ore rights. The primary focus of the joint venture is to define and
develop extensions to the FMG Glacial Valley magnetite deposit. Atlas does not consider this tenement as
prospective for direct shipping grade iron ore.
The material terms of the joint venture heads of agreement are as follows:
1. FMG may earn a 60% joint venture interest in the Iron Ore Rights by delineating Inferred Resources of
iron ore within the Tenement.
2. FMG may earn a further 15% joint venture interest in the Iron Ore Rights by completing a pre-feasibility
study on the mining of iron ore within the Tenement.
3. FMG may earn a further 12.5% joint venture interest in the Iron Ore Rights by completing a definitive
feasibility study on the mining of iron ore within the Tenement.
Background
Atlas is on track to commence mining in October 2008 at its Pardoo DSO Project and to commence DSO
exports from Port Hedland in the 4th Quarter of 2008. Together with additional DSO export tonnages from
Abydos, Atlas is targeting exports of 6 million DSO tonnes per annum by 2010 and 12 million DSO tonnes
per annum by 2012 through Port Hedland.

 

[Real1ty]

6thAugust 2008
ATLAS SIGNS PORT ACCESS AGREEMENT WITH FMG
Atlas Iron Limited [ASX Code: AGO] is pleased to announce that it has today signed a binding Heads of
Agreement with Fortescue Metals Group Limited (ASX Code: FMG) for access to FMG’s Port Hedland port
facility for initial production from Atlas’ Pardoo Direct Shipping Ore (DSO) Project, which is scheduled to
commence production in October 2008.
“This is a ground breaking Third Party Port Access Agreement, the first of it’s kind in Western Australia”
commented David Flanagan Atlas Managing Director. “We now look forward to building on our association
with FMG as we commence development of our second iron ore project 120km south of Port Hedland at
Abydos.” he added.
Background
Atlas is on track to commence mining in October 2008 at its Pardoo DSO Project and to commence DSO
exports from Port Hedland in the 4th Quarter of 2008. Together with additional DSO export tonnages from
Abydos, Atlas is targeting exports of 6 million DSO tonnes per annum by 2010 and 12 million DSO tonnes
per annum by 2012 through Port Hedland.

This is excellent news although very short on actual details and i hope management come out and make a bigger announcement prior to coming off a trading halt.

Hopefully the market will take a lot of confidence from this announcement and reassess it's valuation of AGO, although it is only for initial production at this stage.

 

[Real1ty]

http://news.smh.com.au/business/atlas-iron-signs-jv-deals-with-fortescue-20080806-3r1y.html

Atlas Iron signs JV deals with Fortescue

August 6, 2008 - 7:34PM


Atlas Iron Ltd has entered into a joint-venture agreement with Fortescue Metals Group Ltd (FMG) for Atlas's Abydos project in Western Australia's Pilbara region.

The joint venture covers a tenement over which Atlas owns the iron ore rights.

Atlas also said that it was the first company to seal a port access deal with Fortescue for its new Port Hedland iron ore export terminal.

"The primary focus of the joint venture is to define and develop extensions to the FMG Glacial Valley magnetite deposit, (part of the Abydos project)" Atlas said in a statement.

"FMG may earn a 60 per cent joint-venture interest in the iron ore rights by delineating inferred resources of iron ore within the tenement," Atlas said.

It also said FMG may earn a further 15 per cent joint venture interest in the iron ore rights by completing a pre-feasibility study on the mining of iron ore within the tenement.

A further 12.5 per cent joint venture interest may be earned in the iron ore rights by completing a definitive feasibility study on the mining of iron ore within the tenement.

Atlas has converted a memorandum of understanding (MOU) into a binding heads of agreement to use Fortescue's port facilities for the initial period of production from its flagship Pardoo project, about 100km from Port Hedland.

Pardoo commences production in October, with exports to follow in December.

"This is a ground-breaking third-party port access agreement, the first of its kind in Western Australia," Atlas managing director David Flanagan said.

"We now look forward to building on our association with FMG as we commence development of our second iron ore project, 120km south of Port Hedland at Abydos."

Atlas is expected to negotiate a rail haulage agreement with FMG to transport ore from Abydos to port.

It is also likely to use road haulage to get its product from Pardoo to port.

Mr Flanagan flew from the Diggers and Dealers Conference in the mining town of Kalgoorlie to Perth to finalise the negotiations.

He returned to the popular conference to make a presentation.

He told delegates that Atlas had not yet committed to offtake agreements because it planned to sell about 60 per cent of product on the spot market to capitalise on high prices.

"Every other day we receive an offer ... with a base case that we would achieve a premium to the benchmark price," he said.

He said Atlas was spending between $1.2 million and $1.5 million on exploration each week.

The only other company that has an MOU with Fortescue is BC Iron Ltd.

* The writer of this article has shares in Atlas

Hopefully with things becoming a bit clearer some confidence will return.

 

[Real1ty]

Atlas signs up to use Forrest's Port Hedland facilities

ANDREW Forrest's Fortescue Metals Group has signed its first third-party access agreement at its Port Hedland port, inking a deal with West Australian iron ore hopeful Atlas Iron.

The pair signed a long-awaited deal yesterday afternoon, Atlas managing director David Flanagan said at the Diggers and Dealers mining conference in Kalgoorlie.

"It's a huge agreement and a big milestone," Mr Flanagan said.

"It is going to be good for all juniors. If there were any doubts Andrew was going to do deals, those should be dispelled."

The binding heads of agreement allows Atlas to export iron ore from its Pardoo project, scheduled for first production in October.

Down the track, Atlas is planning to export from a multi-user berth being planned in Port Hedland, but that will not be ready until 2012.

The company is also supporting Mr Forrest's attempts to get BHP Billiton and Rio Tinto to provide third-party access to their Pilbara railways, which it says would provide more efficient movement to port of iron ore from Pardoo.

Atlas is expected to negotiate a rail haulage agreement with Fortescue to transport ore from its Abydos tenement.

It is also likely to use road haulage to get its product from Pardoo to port.

Mr Flanagan said Atlas had been given room to stockpile ore at Fortescue's port and said loading of two ships was expected this year.

He would not reveal the terms of the agreement.

"It's not for free. We're going to have to pay for it," he said.

"There's an option to do up to two ships by Christmas." After that, a minimum of one shipload a quarter would be exported.

The ore will be shipped to Asian customers.

Atlas plans to export about 6 million tonnes of iron ore annually by 2010 from its Pardoo and Abydos mines and increase that to 12 million tonnes in 2012.

Atlas shares slumped from about $4 in June to $2.17 before they went into a trading halt yesterday.

"A lot of shareholders have been concerned about when we were going to complete that agreement," Mr Flanagan said.

As well as the port deal, Atlas signed an agreement under which Fortescue could take a controlling stake in some iron ore tenements.

The company said: "The primary focus of the joint venture is to define and develop extensions to the Fortescue Metals Group Glacial Valley magnetite deposit."

http://www.theaustralian.news.com.au/story/0,25197,24139187-5005200,00.html

 

[rob]

What is going on, the day they decided to have a trading halt every one went up 8% then they released it at 5.30 the same day following day it opened at about 16% to finishe at 4% since then its done nothing but go down, even with all this good news plus the deal with fmg. whats the price going to be by xmas when they start production only to see it wittled down again. Any comments p[lease trying to make sence out of all of this.

 

[Dickwhit]

I am also curious. All news is good, the latest broker report quotes it as A $5 stock, 2010 profit will be over $200 Million, the Ridley deposit will be about 2 billion tons, & prices head south on minimal trading. I love this stock & think it has great potential. Also Fortescue predicts China's iron imports will increase by 50 million tons per year.
Richard W

 

[Doris]

Does anyone know why AGO has broken up today?

Their reply to the ASX for a speeding ticket this morning simply reiterated announcements from the past five weeks.

It opened up .11, rose to 2.79, seems to be consolidating about 2.62, up 15%.

The intraday price chart looks as though someone knows something new!

 

[michael_selway]

Does anyone know why AGO has broken up today?

Their reply to the ASX for a speeding ticket this morning simply reiterated announcements from the past five weeks.

It opened up .11, rose to 2.79, seems to be consolidating about 2.62, up 15%.

The intraday price chart looks as though someone knows something new!

FRS is up alot too, and a few other IRON ORE's, not sure why though

It must be some takeover speculation?

thx

MS

 

[Doris]

FRS is up alot too, and a few other IRON ORE's, not sure why though

It must be some takeover speculation?

MS

You're right about the IO stocks! FRS is up 10%

Even SDL is up over 17%!

So it's not a takeover speculation.

 

[LeeTV]

Not sure as to why the sudden take off off AGO but am quite happy that it's heading the right way, as a holder : It's was oversold and undervalued imo.
It seems all the companies in the North West Iron Ore Alliance, including BC Iron Ltd, Atlas Iron Ltd, Brockman Resources Ltd and FerrAus Ltd. all did well today up 11.11%, 14.91%, 6.9% & 11.96% respectively.

Capacity at Port Hedland's inner harbour is set to increase to cater for the iron ore expansion projects by BHP Billiton, which today secured an agreement with the state government.

BHP will move to increase its capacity at the port to move a total of 240 million tonnes per annum through the inner habour to cater for the Rapid Growth Projects 5 and 6.

The company's current approved capacity is at 155mtpa.

But the announcement didn't shed any further light on BHP's outer harbour development plans.

Last week, BHP chief executive Marius Kloppers remained tight-lipped on details on the development of an outer harbour, known as the Quantum project, saying it was still in prefeasibility study mode.

In the announcement, the minister added that the government and BHP, along with other interested parties, have been working together to develop up to 400mtpa capacity in the Port Hedland outer harbour which would start exports within five yeas.

Less than two weeks ago, Minister MacTiernan said the development of an outer harbour at Port Hedland did not depend on a commitment by BHP.

The news could add to the speculation that BHP is banking on a successful takeover bid for Rio Tinto, giving it access to Rio's Cape Lambert and Dampier port facilities - both of which have the potential to be expanded.

BHP had previously flagged infrastructure synergies in the Pilbara as one of the attractive features of a BHP-Rio merger.

The expansion comes as facilities at Port Hedland become increasingly squeezed as new iron ore producers come online and BHP and Rio Tinto ramp up iron ore output.

Fortescue Metals Group has completed the development of its own port facilities and plans to eventually ship up to 200mtpa.

Two new multi-user berths and associated infrastructure in the Port Hedland inner harbour, which are yet to be built, are reserved for members of the North West Iron Ore Alliance, including BC Iron Ltd, Atlas Iron Ltd, Brockman Resources Ltd and FerrAus Ltd.

The two new berths will add an extra 50Mtpa iron ore export capacity and could be in operation as early as 2012.

The total inner habour's capacity has now more than doubled over the past two years to move through over 400mtpa.

In its annual report, BHP expects RGP5, with an estimated capital expenditure of $6.1 billion, to be completed in 2011. The project will boost iron ore capacity to 200mtpa.

BHP is currently working on the $1.8 billion RPG4 which is scheduled for completion in 2010 and will increase capacity to 155mtpa.

Planning and Infrastructure Minister Alnnah MacTiernan said the inner habour agreement will also accelerate progress with the $225 million Utah Point berth Development.

"The Utah Point project will see manganese and chromite storage and export operations move further away from the town, so the port can use existing berths closer to town for the ever increasing volumes of general cargo," she said.

"It will also provide long-term capacity for smaller iron ore producers.

 

[Motogoon]

Man what a blow to the price the last couple few days, i'm gutted, thought things were on the way up a couple of weeks ago. Hit a high of 2.79 the other day now in the low 1.80's!

I'm still hanging on but i'm feeling the pain cos i bought in at 3.30 first then 2.50. Pretty much the same story for all my stocks.

 

[LeeTV]

You can count me in that boat too Motogoon

The current market is fugly to say the least, unless you have some spare cash and can swoop on some of the bargains out there. Here's hoping October will bring better sentiment, September is notorious for being a bad month for our market on the whole.

 

[Motogoon]

Hey LeeTV,

Yep i'm pretty much maxed out so there'll be no swooping on bargains for me, just have to hold on to the ones i've got now till things improve, At least i do have faith in the companys i'm holding, hard pill to swallow tho.

 

[fordxbt]

its funny, when this stock was on it's way up to 2.50 i though i missed the boat..no need to worry though i dropped the cash into another falling knife!

 

[Romeo75]

Motogoon I'm like you. I bought in at $3.53 then again at $2.51. As soon as I get my hands on some cash I'll buy more if it stays below $2. But I have learnt a lesson. DIVERSIFY!!! I'm stuck with a handful of spec miners which may take many months to realise their potential

 

[bluekat]

AGO appears to be a great stock, all the boxes look good, , but not in SP.
Is production in January 09 appearing unlikely?.

 

[YELNATS]

AGO appears to be a great stock, all the boxes look good, , but not in SP.
Is production in January 09 appearing unlikely?.

With what appears to be a great report yesterday identifying two new DSO iron ore bodies, and production/export to begin this month, sp has dived to $1.29 today, down nearly 12%.


Puzzling, to say the least/

 

[BraceFace]

With what appears to be a great report yesterday identifying two new DSO iron ore bodies, and production/export to begin this month, sp has dived to $1.29 today, down nearly 12%.


Puzzling, to say the least/

Not really - take a look at what's happening to other Iron Ore miners like BHP, RIO and FMG.
They are being hammered and yet they're actually in production and are diversified (unlike AGO).
It will be some time before AGO is back up around $3.

After a crash/correction, the large caps recover first and the small caps recover last so don't hold your breath on this.

By the way, I hold, so I feel your pain. Gotta take a long term view.

 

[Doris]

Trading halt pending ann on final mining approvals for Pardoo DSO project.

... Monday or when ann out.

 

[jackson8]

am wondering if latest announcement form mgx may be replicated in other iron ore producers over coming months