PERTH (miningweekly.com) - Australian iron-ore miner Atlas Iron has expanded its footprint in the Pilbara region by acquiring a 90% interest in the Corunna Downs direct shipping ore (DSO) project from fellow listed Gondwana Resources.

The agreement was in the form of a staged 12-month exploration option for 100% of Gondwana’s interest in the project, which is located halfway between Atlas’ Mount Webber and McPhee Creek DSO projects.

Under the terms of the agreement, Atlas would pay a total of A$2.1-million in cash over three tranches, with the first A$350 000 payment due on signing and the second due six months after.

Atlas would then pay the final installment of A$1.4-million on exercising the option and transferring the tenements to Atlas.

Gondwana would retain a A$1.13/t royalty on all the iron-ore mined at the tenement areas, while Atlas would retain the right to buy back the royalty for A$0.20/t of ore reserve.

“We continue to look for DSO opportunities in the Pilbara,” said Atlas MD David Flanagan on Wednesday.

“This project fits perfectly into our Horizon two expansion plans, with the potential to add DSO tons to the Mount Webber/McPhee Creek area.”

Atlas Iron was currently working towards reaching its six-million-tons-a-year shipment target by the end of this year, expanding this to 12-million tons a year during the 2013 financial year and to 22-million tons a year in 2015.

The Horizon two growth programme would extend the company’s production base from 15-million tons a year to 46-million tons a year through expanding the North Pilbara production, developing the South East Pilbara resource and further expanding the logistics chain to include port and rail developments.
 

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