AGO - Atlas Iron

[stock nub]

It was about a chinese company coming over to Perth to check out Ridley.
The West spoke to David Flannagan and he confirmed that some chinese investors had been recently.

 

[adobee]

Cant believe how crazy AGO seems to go after a cap raising always.. insane jump this morning... hardly any sellers could really fly like last time.. again just when I had sold out.. unbelievable..

 

[justiceotp]

This company is so well run it continues to do well. I am a long term holder.

Adobe I'm interest to know why you sold?

 

[mrluva]

I was going to buy AGO last week But trading got suspended. Now it seems its bit too late. I wuldnt get SPP benefit now and Also when these SPP hit the market, AGO share price might drop.

 

[adobee]

This company is so well run it continues to do well. I am a long term holder.

Adobe I'm interest to know why you sold?

I thought there was alot of resistance around 1.50 and need the money in my bank account as I was getting finance for a property.. thus sold out of this to increase by cash balance.. bit disappointed now as I was holding from about 80c.. Jumped in this morning and bought 10k as I thought it might break out further but will put out if it doesnt and wait for a bit of a retrace..

 

[mrluva]

Got 3K at $1.95.dont know if that was the rite thing to do?????why couldn't i resist???hope it picks up...........

 

[justiceotp]

You might still do alright the mug punters will see today's gains in tomorrows papers and buy up. It seems to be stacked heavily on the buy side at the moment.

 

[LeeTV]

Just wondering what holders of AGO are concidering with the current ssp. I for one will be taking up the full allocation and holding.

FURTHER consolidation is expected in the Pilbara region, with Atlas Iron mobilising a plan to cement its place as the fourth-largest iron ore miner through a $500 million alliance to be announced today.

The Australian understands that Warwick Resources, which is 20.88 per cent-owned by Atlas, and Hannans Reward are set to announce a deal that consolidates their iron ore projects in the East Pilbara.

Speculation of a deal began to build earlier this week when Atlas, which started shipping to China last year, announced plans to raise up to $116.7m to fund the expansion of its Pilbara operations in Western Australia.

Both Hannans and Warwick were placed in trading halts yesterday pending an announcement regarding a "mineral rights transaction".

It is understood the strategy is to make Warwick a major iron ore player with the acquisition of Hannans' Jigalong Project iron ore rights. Hannans is expected to become a major shareholder of Warwick. WA explorer Hannans' primary projects are the Forrestania Nickel project east of Perth and the Jigalong iron ore project in the Pilbara.

Last month, Pilbara-based minerals developer Fox Resources launched an aggressive $5.9m takeover bid for Hannans, which rejected it; the offer lapsed last week.

Fox had argued that combining the two organisations would make sense in the current economic climate, and would provide long-term benefits for the shareholders of both companies.

One analyst said it was strange that Hannans had rejected the Fox bid, arguing the synergies were not there, but was prepared to talk to Warwick.

The combined Hannans and Warwick projects would have about 225 million tonnes of direct shipping ore and a ground position of about 5000sqkm. Hannans will retain all manganese, gold, base metals and uranium rights within the Jigalong project.

It is understood that Atlas sees its stake in Warwick as a strategic position to help it spread its influence through the Pilbara.

Warwick is an emerging iron ore explorer with projects in Newman, near BHP Billiton's Jimblebar mine, but it is at the mercy of the mining giant, which has refused to share its infrastructure.

Rio Tinto and BHP revealed a massive $US116 billion ($146bn) merger of their Pilbara iron ore operations earlier this month, stirring hope in the junior sector that the ore giants might ease up on sharing infrastructure.

Atlas already has a port access agreement with Fortescue Metals Group, which is open to sharing its infrastructure with rivals.

http://www.theaustralian.news.com.au/business/story/0,28124,25657152-643,00.html

 

[GaryS]

I for one will be taking up my full allocation. I would have taken more if I had been able.
This company seems to have made all the right moves so far. Just my worth

 

[Pager]

This company is so well run it continues to do well. I am a long term holder.

Heard that before Allco finance, Sons of Gwalia, Babcock and Brown just to mention 3 were all supposedly "so well run"

Remember not so long a go Tamaya Resources, was another very well run junior with world class assets, had a capitol raising to secure its future improve the balance sheet, then a month later was bust

As Far as im concerned anyone who claims to have well run business that will do well especially from Western Australia and in the mining business equals extreme caution required

I also hold AGO, any sign of weakness in this one will mean a quick exit, as to taking up offer, will take it up if its below the current SP and sell the equivalent of my current holding.

 

[LeeTV]

Heard that before Allco finance, Sons of Gwalia, Babcock and Brown just to mention 3 were all supposedly "so well run"

Remember not so long a go Tamaya Resources, was another very well run junior with world class assets, had a capitol raising to secure its future improve the balance sheet, then a month later was bust

As Far as im concerned anyone who claims to have well run business that will do well especially from Western Australia and in the mining business equals extreme caution required

I also hold AGO, any sign of weakness in this one will mean a quick exit, as to taking up offer, will take it up if its below the current SP and sell the equivalent of my current holding.

If you are a holder then you should already know that the offer is well below the current sp, $1.39 to be exact. Fridays closing price was $1.79

 

[johannlo]

Well the indicators aren't flash (MACD bearish crossing) and on the higher boundaries of the bollinger w/ weakening volumes.

That and the standard logic of SPP = drop as people sell off (to take part in the SPP) + dilution.

I'm looking closely at this stock and waiting for a better entry point (pref as close to SPP as possible LOL). Actually tossing up between this and MGX as an entry into iron ore sector, any thoughts appreciated.

 

[LeeTV]

Good looking reports out of China. Hopefully with the DOW also currently up 113 points AGO will stage a nice rally tomorrow and get back on track for cracking $2.00 (and beyond).

China Manufacturing Expands a Fourth Month, PMI Shows (Update1)
By Bloomberg News
http://www.bloomberg.com/apps/news?pid=20601012&sid=aVHsWwtr5OIw


July 1 (Bloomberg) -- China’s manufacturing expanded for a fourth month as a 4 trillion yuan ($585 billion) stimulus plan and record bank lending revive the world’s third-largest economy.

The official Purchasing Managers’ Index rose to a seasonally adjusted 53.2 in June from 53.1 in May, the Federation of Logistics and Purchasing said today in Beijing in an e-mailed statement. A reading above 50 indicates an expansion.

The Shanghai Composite Index rose above 3000 points for the first time in a year, copper gained and the yen fell as the report added to signs that the global economy may be over the worst of its slump. China’s economy may keep improving in the third and fourth quarters, enabling the nation to meet its 8 percent economic growth target for this year, central bank Governor Zhou Xiaochuan said this week.

“China’s recovery is gathering further momentum,” said Lu Ting, an economist with Bank of America Merrill Lynch in Hong Kong. “It has been recovering faster than the market had expected.”

Another PMI, released today by CLSA Asia-Pacific Markets, also showed an expansion.

Copper for delivery in three months rose 2.2 percent on the London Metal Exchange as of 11:15 a.m. in London. Shanghai’s benchmark stock index closed 1.7 percent higher at 3,008.15. Yuan forwards rose for a second day.

U-Shaped Recovery

China’s recovery will be U-shaped, with export growth returning to “normal” by the end of this year or early 2010, central bank adviser Fan Gang said at a forum in Beijing today. The nation is the world’s second-biggest exporter.

The economy will revive “faster or earlier” than elsewhere because China limited asset bubbles, including in housing, Fan said.

An export-order index rose to 51.4 in June from 50.1 in May, expanding for a second month, the government-backed PMI showed. A measure of new orders fell to 55.5 from 56.2.

“Fiscal stimulus projects are gathering steam and everything is going according to plan,” said Sherman Chan, an economist with Moody’s Economy.com in Sydney. “The pickup in export orders is the most encouraging sign for an economy that’s been very externally dependent.”

Output and employment indexes climbed, the survey showed. Input prices jumped as raw-material costs rose.

Growth is likely to continue to improve in June, Zhang Liqun, an economist at the State Council Development and Research Center, said in the statement, describing the economy as in a “preliminary” recovery.

Stimulus, Lending

The outlook for China contrasts with that of Japan, where sentiment among large manufacturers rose less than economists estimated in June, signaling the economy may be slow to recover from its deepest postwar recession. An index of confidence climbed to minus 48 from a record minus 58 in March, the Bank of Japan’s Tankan survey showed today in Tokyo.

In China, the stimulus plan and new loans of 5.84 trillion yuan in the first five months, almost triple lending a year earlier, are driving growth.

“China’s stimulus program is having a demonstrable effect on domestic spending, which has resulted in increased manufacturing activity,” said Jing Ulrich, Hong Kong-based chairwoman of China equities at JPMorgan Chase & Co.

Bank of America Merrill Lynch and JPMorgan raised this week their forecasts for second-quarter economic growth. The former expects 7.6 percent, compared with 7.2 percent previously. JPMorgan increased its forecast to 6.9 percent from 6 percent.

Copper, Steel

Prices of copper, used for autos and construction, have climbed more than 60 percent this year as Chinese buyers boost imports to records to replenish stockpiles.

Higher coking coal prices are adding to evidence that demand for steel is recovering. Fushan International Energy Group Ltd., a producer of steelmaking coal, said last month that it raised prices for the first time since January.

China’s lending boom sparked a 32.9 percent surge in urban fixed-asset investment in the first five months, the fastest growth in five years. New loans in June may exceed 1 trillion yuan, triple lending in the same month a year earlier, China Business News reported June 30.

To contact the reporter on this story: Kevin Hamlin in Beijing on khamlin@bloomberg.net

Last Updated: July 1, 2009 06:41 EDT

 

[LeeTV]

Race on for iron ore juniors
--------------------------------------------------------------------------------
Wednesday, 8 July 2009
Kate Haycock

http://www.miningnewspremium.net/StoryView.asp?StoryID=1030869

THE junior iron ore sector could be set for a period of merger and acquisition activity with several plays in the Pilbara saying consolidation is necessary for access to infrastructure and money.

Despite the volatility of the past year and the drama surrounding iron ore prices, the Pilbara remains a hotspot of activity for explorers.

With the Rio Tinto-BHP Billiton iron ore joint venture, juniors are also likely to provide a viable alternative for Chinese steel mills – provided these companies can actually get their ore to market.

Brockman Resources, BC Iron, Iron Ore Holdings, FerrAus and Warwick Resources are among the more active explorers in the region.

However, the barriers to entry for these juniors remain high, and principally involve money and the size of their resources – although companies like Atlas Iron have proved it is not impossible to make smaller projects viable.

Either way, seeking a deal with a larger company in the region is one way for a junior play to get a leg up towards production.

So far, the smaller plays have been reaching one-on-one agreements with larger companies to unlock the value of their tenements, with aggressive M&A activity eschewed in favour of more cooperative agreements.

DJ Carmichael resource analyst James Wilson predicted there would be a lot of activity in the junior iron ore space in coming months and years.

However, he said while there were a lot of juniors in the Pilbara only a handful had the right projects to do deals with bigger companies, and there were only a small number of bigger companies in a position to do these deals.

He told MiningNews.net the majors, Rio Tinto and BHP Billiton, could be effectively counted out of the picture for acquisitions, joint ventures or other sorts of arrangements.

While the two majors are combining their iron ore assets, which may open up railway access for juniors in the Pilbara, this was “years off” at best.

Wilson said Fortescue Metals Group and Atlas Iron would be the most obvious predators but the industry appeared to be moving towards “cooperation agreements” rather than M&A.

BC Iron, for instance, has done a joint venture deal with Fortescue Metals Group over its Nullagine tenements and also won access to FMG’s railway system.

“The BC Iron deal is the gold standard of these deals,” Wilson told MNn, adding that the deals cost nothing but had plenty of upside for shareholders.

Other cooperative arrangements include Warwick Resources, which shook hands with Atlas Iron in April over a deal that will see the companies pursue a strategic alliance for the exploration and development of Warwick’s projects near Newman in Western Australia’s Pilbara region.

Iron Ore Holdings, meanwhile, has done a unique mine gate sales deal with major mining house Rio Tinto over its Phil’s Creek deposit – the only junior to do so.

Then there is the much larger Aquila Resources, which through its Australian Premium Iron project controls half a billion tonnes through a complicated structure that encompasses the holdings of several smaller plays like Red Hill Iron and Helix Resources.

Aquila too has done a cooperative deal with Fortescue Metals Group over the potential Anketell Point port development that could help FMG unlock the value of the Solomon deposit and Aquila open up the API venture.

Among the smaller companies, Perth-based Warwick – which has yet to define a resource – has said it would open up lines of communication with its neighbours.

Warwick managing director Bruce McQuitty said the company would be talking to producers that own infrastructure and other iron ore explorers in the region.

The company’s projects are in the eastern Pilbara region and McQuitty said there were substantial resources in that area not controlled by the majors, including those of FerrAus, another company which has said consolidation is necessary in the Pilbara.

McQuitty said in his view achieving economies of scale were necessary to unlock an infrastructure solution in his part of the Pilbara.

“We’re aggressively drilling that target tonnage out with a view to converting that to resources, and that will give us a better, more confident platform to undertake consolidation activities going forward, whether that will be in a corporate fashion or joint venture fashion,” McQuitty told MiningNews.net.

McQuitty said Warwick was in discussions with other juniors and “existing producers” with a view to potentially unlocking infrastructure.

“We’ve seen [consolidation] before in the gold sector around Kalgoorlie, for example, we’re seeing it on the east coast with coal projects and coal seam gas, and we’re now looking at this having to happen in the Pilbara region.”

FerrAus chairman John Nyvlt last week made similar comments about his company’s view of the future of the Pilbara.

He said companies needed to define a larger resource base in excess of 500 million tonnes that would help juniors access rail and port infrastructure.

“As such, FerrAus would like to see, and will promote, further consolidation and rationalisation of the junior iron ore sector in the Eastern Pilbara.”

While Atlas Iron is tipped as being a consolidator in the region, Atlas managing director David Flanagan said his company had no interest in being an aggressive predator.

“We’re not in the mood to go out there and take on an M&A rampage,” he said.

However, he added that the company’s door was open for business to other juniors.

“Warwick came to us and wanted us to take a 20 per cent stake in the company and we did. If someone else came to us wanting to do a deal we would consider it,” he said.

Flanagan was also instrumental in creating the North West Iron Ore Alliance, a body representing juniors in the Pilbara.

He told MNn he would strongly encourage iron ore juniors in the region “to pick up the telephone and speak to Justin Walawski [head of the alliance] and ask how you can get involved”.

“Atlas is not a unique company and there are lots of companies that could do what we’ve done. The North West Iron Alliance wants to support other entrants,” he said.

However, Flanagan said Atlas had learned a lot from starting its own mine and this experience would help it develop further deposits.

For BC Iron managing director Mike Young, mergers and acquisitions will be on the menu for his company once it becomes an established producer – but Young views BC Iron as the company making the moves, not as a potential target, especially after its deal with FMG.

“The fact we’ve got a joint venture with FMG and an infrastructure solution, that JV and our shareholding almost protects us,” he said.

However, he said from the moment the company found its Nullagine deposit, it was always BC Iron’s business model to get into production and then use the cash flow to grow the company by potentially engaging in M&A.

Young also said there would be plenty of options for successful iron ore plays in coming years with capital harder to get, especially for producers looking to expand, and that would inevitably lead to consolidation.

However, he warned tie-ups that looked good on paper might not work in reality.

“A lot of these deposits and a lot of the companies that people might think make obvious bedfellows are a long way apart, and if you’re going to do a merger or acquisition you want to be looking at synergies,” Young said.

 

[LeeTV]

The spp was heavily over subscribed and those that took up the offer, including me, will only be getting roughly 50% of what we paid for and a refund will be mailed out this week. Expected quotation of spp shares is still 22nd July, 2009.

All in all not a bad result. Spp @ $1.39 closed today @ $1.80 it's too bad we only got half.

http://asx.com.au/asxpdf/20090720/pdf/31jn28444z8bff.pdf

 

[LeeTV]

24 Jul 2009 1.825 4.29% 1.865 1.775 5,029,828
23 Jul 2009 1.750 -0.85% 1.770 1.700 3,547,022
22 Jul 2009 1.765 1.15% 1.775 1.735 1,427,797
21 Jul 2009 1.745 -3.06% 1.820 1.680 2,663,420
20 Jul 2009 1.800 0.56% 1.850 1.750 2,643,201
17 Jul 2009 1.790 5.92% 1.790 1.710 3,734,449



Big volumes today and in big chunks:



03:34:16 PM 1.830 300,000 549,000.00

12:00:19 PM 1.850 17,080 31,598.00
12:00:19 PM 1.850 67,800 125,430.00
12:00:19 PM 1.850 81,800 151,330.00
12:00:19 PM 1.850 161,300 298,405.00
12:00:19 PM 1.850 4,100 7,585.00
12:00:19 PM 1.850 30,000 55,500.00
12:00:19 PM 1.850 1,800 3,330.00
12:00:19 PM 1.850 1,800 3,330.00
12:00:19 PM 1.850 1,898 3,511.30
12:00:19 PM 1.850 10,000 18,500.00
12:00:19 PM 1.850 50,000 92,500.00
12:00:19 PM 1.850 20,000 37,000.00
12:00:19 PM 1.845 27,393 50,540.09

10:56:32 AM 1.800 10,000 18,000.00
10:56:32 AM 1.800 50,000 90,000.00

10:10:46 AM 1.800 46,776 84,196.80
10:15:05 AM 1.805 60,000 108,300.00
10:38:34 AM 1.800 30,000 54,000.00

10:09:35 AM 1.800 25,000 45,000.00
10:09:35 AM 1.800 80,485 144,873.00

A good week for AGO

 

[LeeTV]

27 Jul 2009 1.930 5.75% 1.970 1.850 4,532,628

Good volume again today with buyers lining up for more at around 7 to 4 ratio. IO prices up. Due for an announcement soon in light of capital expenditure(spp) and resource upgrades. We could be testing the $2 barrier this week if this trend continues and global conditions remain optimistic.

 

[LeeTV]

Atlas Iron to Begin Wodgina Production in 2010
03 August 2009

http://www.mining-technology.com/news/news61002.html

Atlas Iron expects to start production at its Wodgina DSO Project in the Pilbara region of Western Australia in January 2010 following a nine-month feasibility study.

The first exploration drill hole at the project was completed in November 2008 with an intention to begin mine development in just over 12 months, Atlas MD David Flanagan said.

Production is expected to begin at an initial rate of two million tonnes per annum (mtpa) quickly growing to 3.6mtpa in 2010, with trucking to the new Utah Point port facility in Port Hedland commencing during April 2010.

Flanagan said that the low strip ratios and the project’s location close to Port Hedland mean that the firm is very willing to invest in the project.

“The first exploration drill hole was completed at Wodgina in mid-November 2008. With mining commencing in January 2010 we intend to move from first drill hole to mine development in just over 12 months. This is a remarkable story and testament to the capabilities of our team” Flanagan said.

The project has required minimal capital outlay of just A$9.57m due to being able to leverage off the existing infrastructure at Talison Mineral’s Wodgina Tantalum mine, Atlas said.

Operating costs are expected to be between A$38 and A$45 per tonne over the course of the mine’s life.

 

[LeeTV]

http://www.atlasiron.com.au/IRM/Company/ShowPage.aspx?CPID=2177&PageName=Wilson

Recommendation
Production at Pardoo was better than our estimate and is on track to
produce 1 Mt in calendar 2009 and for a 2.5 Mtpa rate during 2010.
Wodgina and Abydos projects are progressing toward development. The
Ridley magnetite project feasibility study returned a capital requirement
well above expectations, reducing our valuation and target but near term
earnings have increased with good production from Pardoo. Our risked 12
month price target reduced by 5% to $2.59/share. With our price target at a
29% premium to the share price we have retained our BUY
recommendation for AGO for the value expected from future production
growth with ambitious production targets progressing to 12 Mtpa by 2012.

Price Performance
Aug 08 Dec 08 Apr 09 Aug 09
$2.50
$1.25
Security/Capital Details
ASX Code AGO
Market Cap $775 M
Issued Shares (dil) 385.3 M
Avg Mth T’over 31.78 M
12 Mth High – Low $2.68 - $0.44
Key Data/Ratios – FY 2009
EBITDA / Sales -208.9%
EBIT / Sales -213.9%
Debt / Equity 0.0%
Interest Cover -127.8 x
ROE -35.3%
EPS Growth -46.3%
DCF $2.64
12 Mth Price Target $2.59
Key Points
Production from the Pardoo project is on track for 1 Mt of iron ore for
calendar 2009 and to produce at a rate of 2.5 Mtpa during 2010 while it
ramps up to its target of 3 Mtpa. A total of 287,837 tonnes were mined in the
June quarter and 152,091 tonnes shipped. A cape-sized shipment (151,276
tonnes) just slipped into July. Production was better than our estimates with
regard to the ramp-up of Pardoo toward its targets.
Demand for iron ore product has continued to be strong though pricing has
been uncertain due to the lack of official agreement by Chinese customers.
AGO has been selling cargoes on a spot basis up to July 2009. From this
point onward sales under long term contracts will be priced provisionally
based off the benchmark price that has been adopted in Asian markets
(other than China), with usual quality adjustments for AGO ore relative to
benchmark specifications. Increased AUDUSD exchange rates have been
offset somewhat by increased spot iron ore prices since the end of FY2009.
At the end of the June quarter AGO held $124m cash, which has increased
to $164m cash following completion of a placement and share purchase
plan.
With the completion of the Ridley magnetite feasibility study the capital
requirement at $2.27 billion was much larger than expected, by $1 billion,
offset somewhat by the value of an increase in planned production rate from
10 Mtpa to 15 Mtpa of concentrate and a higher expected recovery of
magnetite into concentrate.
Near term however AGO’s production at Pardoo is ramping up quicker than
we had estimated, which has increased our near term forecasts.
After adjusting for these revisions our forecast NPAT for FY2010 has
increased by 19% to $60.9m and FY2011 forecast increased by 5% to
$174m. Our DCF value reduced by 16% to $2.64 and our risked 12 month
price target reduced by 5% to $2.59/share.
With our price target at a 29% premium to the share price we have retained
our BUY recommendation for AGO for the value expected from future
production growth with ambitious production targets progressing to 12 Mtpa
by 2012. These targets are supported by AGO’s development performance
to date and our outlook for global (and in particular Chinese) steel markets.

 

[LeeTV]

Another great announcement expect the sp to head north today, 2.10 - 2.15 is my bet

Maiden Resource for Mt Webber DSO Project

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=00974598