AGO - Atlas Iron

[Gurgler]

We have a trading halt this morning in relation to a press article, does anyone know what article it is they are referring to ?

Hi justiceotp

Here is another (brief) article:
Iron ore stocks soar as punters back the Pilbara dream
Wednesday January 06, 2010 13:32:38 EST
Jan 06, 2010 (The Australian - ABIX via COMTEX News Network) --
Following the lack of any agreement with Chinese buyers on an iron ore benchmark price in 2009, Australian exporters of the commodity may now stand to gain an increase of 30% in new talks. The forecasts by experts have already caused a rise in the stocks of mining groups with iron ore assets in the Pilbara region of Western Australia. On 6 January 2010 Fortescue Metals Group closed 13% higher at $A5.20, while BHP Billiton was up $A0.54 at $A43.82 and Rio $A2.23 at $A78.58. Atlas Iron, Mount Gibson Iron Ore and Brockman Resources also closed between 4.45% and 7.85% higher.

Publication Date: 7 January 2010

FORTESCUE METALS GROUP LIMITED - ASX FMG
RIO TINTO LIMITED - ASX RIO
BHP BILLITON LIMITED - ASX BHP
ATLAS IRON LIMITED - ASX AGO
MOUNT GIBSON IRON LIMITED - ASX MGX
BROCKMAN RESOURCES LIMITED - ASX BRM
CHINA IRON AND STEEL INDUSTRY ASSOCIATION
STANDARD AND POOR'S ASX 200 INDEX
IG MARKETS LIMITED
Copyright 2010 LexisNexis Australia. All Rights Reserved.


Don't know which they are refering to. Awaiting a clarifying response!

 

[adobee]

Dam i thought this was looking good when it started head butting $2 .. but then forget .. should have got on it .. interesting to see what happens from here thought .. Is Iron Ore back in favour.. ?>!!>! FMG even moving up now ..

 

[YELNATS]

Hi justiceotp



Don't know which they are refering to. Awaiting a clarifying response!

Of the two articles, I would think that the article that AGO would like to clarify is the one in the West Australian newspaper, as referenced by GaryS above.

Let's hope the clarification doesn't put too much of a dampener on their recent share price rise.

 

[Gurgler]

Let's hope the clarification doesn't put too much of a dampener on their recent share price rise.

You were correct (about the focus of the article), and reaction has been positive - so far.


CLARIFICATION ON PRESS ARTICLE
Atlas is currently exporting ore from it’s Pardoo iron ore Project, located 75 kilometres east of Port Hedland in the Pilbara of Western Australia. Atlas is also rapidly advancing the development of a second iron ore mine at Wodgina 100 kilometres south of Port Hedland and working to complete the process of engaging a strategic partner for the development of the 2Bt Ridley Magnetite Deposit located at Pardoo.
Following a request made by ASX to Atlas in response to an article in the media today, Atlas advises that:
● In relation to the Wodgina DSO Project development, which Atlas is currently working to bring into production, Atlas has received strong interest from steel mills seeking to acquire off take to this iron ore. While these discussions are advancing well, they are not complete; and
● In relation to engaging the development partner for the Ridley Magnetite Deposit, Atlas has received strong interest from capable organisations. While these discussions are advancing well, they are not complete.

 

[justiceotp]

An announcement this evening from Atlas for anyone that hasn't noticed yet.


21 January 2010

ATLAS DOUBLES DSO RESOURCE INVENTORY TO 187Mt

Atlas Iron Limited [ASX Code: AGO] is pleased to announce that its resource inventory of Direct

Shipping Ore has doubled to 186.6 million tonnes at 56.6% Fe, paving the way for the planned

increases in production and sales revenue over the next three years.

HIGHLIGHTS
• 97% INCREASE IN DSO RESOURCES IN LAST 6 MONTHS
• 230% INCREASE IN DSO RESOURCES IN LAST 12 MONTHS
• SIGNIFICANT INFERRED RESOURCES CONVERTED TO MEASURED AND INDICATED
• EXPLORATION TARGET OF 430 TO 750Mt AT 57 TO 60% Fe

The revised DSO resource estimate represents an increase of 97% from the figures published in July

2009 and a rise of 230% from this time last year.

“Atlas has worked extremely hard in the field to grow our resource base during 2009, with 100,000m

drilled for the year. That’s been reflected in this result, with a 49% increase in resources on Atlas’

projects plus the additional 46 million tonnes coming from the recent merger with Warwick Resources”

commented David Flanagan, Atlas’ Managing Director.

“This is an excellent result for a company of Atlas’ size during one of the worst economic downturns
in the past 50 years.”

“This resource base sets up the Company to achieve its key goals of growing exports to an annual
rate of 6 million tonnes this year, rising to 12 millio tonnes in 2012.”

 

[lyn1312]

My favourite stock for the past 3 years out of the 14 that i have-I reckon these guys are going to go sooo well. I'm not savvy with reading the charts etc but I have a good feeling about this company. I reckon they are going to outdo FMG - easy. WDYR?

 

[TheAbyss]

Trading halt for AGO.

Looks like the partner has been found for Ridley and a bid is in

They flagged an equity stake not so long ago for this so looks like good news ahead if you are partial to an increased Chinese presence (along with their millions).

They had to get funds to develop Ridley somehow so fine with me.

Onward and upward.

http://www.asx.com.au/asxpdf/20100308/pdf/31p48t1dqwgsxc.pdf

 

[TheAbyss]

Going through the broker reports it looks like the Ridley deal (if Ridley is the cause of the trading halt today) will have a potential two fold effect on the SP.

1. The removal of risk regarding capital costs associated with bringing Ridley into development (2.1 billion). A major partner means no capital rasings etc and the $146 million they have in the bank will at least double and there is no debt so a great result.

2. Most brokers have valued Ridley at $150m (32 cps) so anything above that will add to the current share price valuation. A report today suggested it could be as high as $230 million (see excerpt from Bloomberg report below). If this is the number ten this is worth an additional 16 cents per share to current valuation.

Bloomberg quote

The trading halt comes amid speculation that a consortium comprising of India's NMDC Ltd, Saudi-based ABS Consulting and ASX listed Boulder Steel Ltd have made a $230 million bid for a stake in Atlas' $3 billion Ridley project.

According to Bloomberg, the consortium has offered a non-binding bid for a 70 per cent stake in the project.

 

[Idiode]

The proposed merger of AGO and AXO looks like a good thing.

They have just completed negotiations for sharing of the Utah Point port facilities and a merger will only enhance their economies of scale and expertise.

It simply makes good sense to combine their companies given the proximity to each other and the diversification of their resources.

On the negative side, it looks like there are a lot fingers in this pie, mainly as a result of the need for capital, but I guess Forescue, BHP and RIO all started in a similar vein.

AXO are in need of major capital injections to make their operation sucessful. In some ways they look a little like Australian Magnesium in that they have a technically demanding resource and could easily fail if the capital runs out before the potential of resources are fully realised.

I bought AGO in 2007 when their reports indicated they would be earnings positive within 12 months. I sold half at $4.10 and watched the other half go on a merry old ride. Now, 3 years later, when they are exporting iron ore by the shipload they appear to be further away from profitability than they were in 2007, mainly because of the GFC and the cash needs of their exploration and mining operations. Mr Market values them at $2.31 at close today.

What are the views of the Forum on their future prospects

Idiode

 

[Puntin-on-miners]

A bit of dilution with the recent capital raising. I am new to the markets & was only put on to Atlas 2 weeks ago. Everything looked positive & I bought in @ $2.95 This ain't an easy game. I'm hoping it's only a short term stagnation & things will push forward through 2010. Let's see how we go !

 

[Puntin-on-miners]

My favourite stock for the past 3 years out of the 14 that i have-I reckon these guys are going to go sooo well. I'm not savvy with reading the charts etc but I have a good feeling about this company. I reckon they are going to outdo FMG - easy. WDYR?

I'm with you lyn1312 --> lets support them in their efforts & ride along with Atlas, anyone watching Golden Gate Petroleum (GGP) & Austex Oil (AOK) ?

 

[TheAbyss]

Article in WA newspaper today as per below. Confirms what we already know. AGO will be a stellar IO performer.

http://au.news.yahoo.com/thewest/bu...35/atlas-could-reach-1b-revenue-in-two-years/

Atlas Iron could be turning over nearly $1 billion within two years, according to Credit Suisse analysts, who have crunched the numbers on the iron ore miner's latest production forecasts.

Weeks out from the release of scheme documents for Atlas' friendly takeover of Aurox Resources, Credit Suisse analysts headed by Nathan Littlewood have revised their earnings forecasts for the Pilbara miner.

On Credit Suisse's numbers, Atlas' revenue is poised to soar from an estimated $98.2 million in 2009-10 to $482.9 million in 2010-11 and $906.8 million in 2011-12, which would translate to earnings before interest, tax, depreciation and amortisation of $479.9 million.

Atlas shipped just over one million tonnes of iron ore last year but has yet to turn a profit.

It recorded a $63.14 million loss for 2008-09 on revenue of $26.4 million, mostly as a result of a big exploration bill.

Credit Suisse's bullish figures may help ease concerns that Atlas has been too optimistic in its forecasts.

The company hopes to reach a production run rate of 6mtpa by the end of this year, increasing to 12mtpa by 2012 from its combined Pilbara operations.

In a note to clients, Mr Littlewood said that even on a worst-case infrastructure scenario Atlas' share price - it closed yesterday at $2.02, up 15.5 ¢ - was pricing in iron ore expectations of about $US65 a tonne, compared to spot prices of about $US136/t. Credit Suisse forecasts spot prices will hit $US175/t in the fourth quarter of this year.
Atlas' scheme meeting for the Aurox deal is scheduled for July, with the takeover to be finalised by August.

 

[Bluebeard]

AGO had a really strong finish today and finished at 2.27 - company made another positive announcement today so hopefully the next weeks bring some positive price action.


PS- I hold AGO... None of my posts can be considered financial advice and people should always do their own research before making any investment decision.

 

[Boggo]

Looks like AGO has broken out today, its been hinting for a few days now.

(click to expand)

 

[MEGALADON]

If you like AGO but want to dilute your direct exposure and add in some exploration oportunities, then look at HANNANS REWARD LTD, a small cap with a decent holding in AGO, and current up coming drilling activity near St Barbaras holdings.

 

[quinn123]

Yeah I have some of these: indirect exposure to AGO + potential exploration success...

 

[youngone]

AGO on the rise

Hi

Im new to stock share, have been looking at AGO. Comsec recently annouced a discussion, is this the right time to buy shares with AGO? are they a good company to add to my portfolio over the next 6 months?

Thanks.


Mining stocks are faring better in the wake of positive momentum on the London Metals Exchange. BHP Billiton (BHP) and Atlas Iron (AGO) have entered into discussions which could see AGO use one of BHP�s rail lines in the Pilbara. Shares in BHP are up 0.6pct to $43.72 while AGO is firmer by 5.8pct to $2.90

(comsecc 19/11)

 

[ParleVouFrancois]

Re: AGO on the rise

I'd assume you'd better post this on the AGO thread, Joe/anyothermoderator, could you please move this to the AGO thread and delete my comment? Thanks

 

[fanger]

I'm looking to get back in on AGO, I owned it about 6 months ago and made a tidy profit and I want to buy it on a pull back. I saw the other day it hit the low $2.80's but bounced back by the end of the day. Being the holidays I've got a ton of other things I'm doing and can't follow the market closely so can anybody give my a rough idea where this is heading short term?

 

[fanger]

Can anyboby tell me why AGO jumped 6% yeasterday?