Atlas Iron Limited : Atlas to deliver next phase of growth
04/26/2012| 08:43pm US/Eastern
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Atlas Iron Limited (ASX Code: AGO) is pleased to report on
its Horizon 1 projects in the north Pilbara. Atlas' continued
assessment and development of its DSO projects demonstrates
they are amongst the world's most capital efficient iron ore
expansion projects.
HIGHLIGHTS
• Mt Dove Mine development to commence June 2012, with
production from Dec 2012
• Abydos Mine development to commence May 2012, with
production from Apr 2013
• Export rate to grow from 6Mtpa to 10Mtpa from June 2013,
increasing to 12Mtpa by Dec 2013
• Low capex cost, in the range of $60-$70 per annualised
tonne of incremental installed mine/plant capacity
• Low cash operating cost at 12Mtpa, targeting $47 to $52 /
tonne in FY 2014
• Atlas' strong cash position and strong operating cash flows
provides ease of financing
• Atlas' Standard Mine Model at Mt Webber (Atlas owned
infrastructure, contractor operated) is a precursor for
future roll out at McPhee Creek and SE Pilbara DSO
projects
Following feasibility work and project development to date,
Atlas is pleased to provide an update of its Horizon 1
project objectives and production expansion plans, including:
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Phase A - 10Mtpa Export Rate
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Status
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Total
Capex
|
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Wodgina Mine and Infrastructure
Upgrade
|
Pit expansions underway and infrastructure construction
approximately 50% complete
|
$252M
|
|
Mt Dove Mine Development
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Permitting advanced. Construction commencing from June
2012. Board approved
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$252M
|
|
Abydos Mine Development
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Permitting advanced. Construction commencing from May
2012. Board approved
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$252M
|
|
Sub total - Phase A
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Additional 6Mtpa installed plant capacity
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$252M
|
|
Phase B - 12Mtpa Export Rate
|
|
|
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Mt Webber Mine Development
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Pending Board and environmental approvals. Construction
to start in Jan 2013. Ramp up to 6Mtpa installed plant
capacity. Atlas owned infrastructure, contractor
operated
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*$250M
|
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Off-Highway haul road
development - 100km and Utah Point port and Boodarie
Link expansions
|
Grant of tenure for haul road is subject to a Warden's
Court
process, the outcome of which may impact on the haul
road's alignment and cost, and has delayed road
construction. Port construction due to commence in May
2012. Port infrastructure capital funding and
operations solutions via 3rd parties, with
discussions well advanced
|
**$170M
|
|
Sub total - Phase B
|
Additional 6Mtpa installed plant capacity
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$420M
|
|
Total Capex - 12Mtpa
|
|
$672M
|
|
LessCapex already spent on
Phase A
|
|
$42M
|
|
Remaining Capex spend
|
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$630M
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*- Atlas notional share. Altura Mining owns 30% of the Mt
Webber joint venture (southern portion of the Mt Webber
deposit) and
therefore notionally owns approx.16% of the combined Mt
Webber reserve. An agreement on the joint funding of the Mt
Webber DSO
project has yet to be finalised.
**- Provisional estimate, pending final road alignment, port
access arrangements and approvals.
"Atlas will deliver massive growth in production and
operating cash flows, with globally competitive capital and
operating costs," Ken Brinsden, Atlas' Managing Director
said. "Expanded mine production is just around the corner
with the imminent development of the Mount Dove and Abydos
mines".
Further details for the North Pilbara development and
production expansions are provided below.
Mine Production Profile
Atlas Pilbara Project Locations - Horizons 1 and 2
Atlas' production objectives over the periods comprising the
2013 and 2014 financial years, inclusive of the introduction
of new mine production capacity from the Mt Dove, Abydos and
Mt Webber mines are indicated below.
14
Mine Production Profile
12
10
Abydos
8
Mount Dove
6
4
Wodgina
2
0 Pardoo
Mount Webber
Jul-12 Jan-13 Jul-13 Jan-14
Cumulative Mine Production Rate
Discrete mine production contribution to total tonnes shipped
will vary from quarter to quarter according to the
requirements of the Company's mine schedules and operating
strategy.
Atlas is targeting cash operating costs to be in the range of
$47-$52/tonne at the 12Mtpa production rate in FY 2014.
NORTH PILBARA EXPANSION PROJECTS Wodgina Mine and
Infrastructure Upgrade Project
Atlas is pleased to report that the additional pits proposed
at the Wodgina Mine have obtained environmental approval and
are now under development, including the Dragon and
Constellation mining area.
Construction of the infrastructure upgrades at the Wodgina
site is now approximately 50% complete.
Wodgina Mine Layout - Showing the Existing Anson Pit and New
Mining Areas at Dragon, Constellation and
Hercules
Mt Dove Mine Development
The Mt Dove Mine delivers additional tonnes and higher grade
ore to the Atlas blend. Mt Dove is proposed to be established
as a wholly contracted operation, with a mine life of
approximately 15 months at a nominal rate of 2Mtpa.
All tenure is established for the project and permitting is
well advanced. Major contracts will be awarded within the
next month with construction commencing during June 2012 and
production from December 2012.
Mount Dove Mine Layout
Abydos Mine Development
The Abydos mine will commence construction from May 2012,
with first production and associated haulage to port
anticipated from April 2013 at a rate of 2-3 Mtpa.
As a result of ongoing difficulties in establishing tenure
(and thereby land access) for the Abydos Mine's haul road
access across an existing railway line, Atlas is taking
advantage of an alternate haulage route that takes mine
production to the North via the Marble Bar road, rather than
the initially proposed haulage to the west. The Northern haul
road option provides for a haulage distance largely the same
as that originally proposed.
Atlas is progressing through a 'Warden's Court' process (the
means by which land access disputes are resolved under the
Western Australian Mining Act) in relation to an objection
received to developing the originally proposed haul road.
Atlas will continue to pursue the process of planning and
permitting the original haul road to provide an option for
future expansion of the Abydos Mine.
Atlas and Venturex agreement on Abydos DSO Project Haul Road
On 26 April 2012, Atlas entered into an agreement with
Venturex Resources Limited (Venturex) to establish a Haul
Road linking the new Abydos mining operation to the existing
sealed Marble Bar Road via Venturex's access road route to
the proposed Venturex Sulphur Springs Hub site. Under the
agreement, Atlas and Venturex will have shared access and
capacity rights to the Haul Road to service and support
Atlas' Abydos DSO project and Venturex's proposed Sulphur
Springs project. Venturex and Atlas have also agreed to
cooperate with each other in relation to investigating the
potential for shared development of other infrastructure
capacity in the region. This is currently Atlas' preferred
haulage route for the Abydos project.
Abydos Mine Layout
Mount Webber Mine Development
The Mt Webber Mine will ramp up to 6Mtpa (subject to the
completion of the Off-Highway haul road development - see
Off-Highway Haul Road Development section below) utilising a
fixed crushing and screening plant to be owned by Atlas and
operated by contractors.
The final infrastructure to support up to 6Mtpa will be
installed as per the Atlas' 'Standard Mine Model', within
which infrastructure capacity is installed in 5-6Mtpa modules
for the Mt Webber mine and subsequent mine developments at
McPhee Creek and the South East Pilbara projects. Atlas
intends to utilise the existing mining contractor model for
mining operations.
The standard mine model will use the principle that the
infrastructure is designed once and rolled out at each new
mining location. Under this approach infrastructure design,
construction and site delivery costs will be reduced,
contributing to overall lower costs of development and faster
mine site construction.
Mount Webber Mine Layout
Off Highway Haul Road Development
In light of the progress being made with respect to rail
haulage solutions, the off-highway haul road will now be
built from Wodgina to Port Hedland, a distance of
approximately 100km. Initial estimates for the likely
combined off-highway haul road capacity will be up to 15Mtpa
pending the various combinations of individual production
from the contributing mines.
Grant of tenure for the off-highway haul road is subject to a
Warden's Court process. The outcome of this process may have
an impact on the road's alignment and therefore cost.
Furthermore the ramp up of mine production capacity at Mt
Webber to achieve 12Mtpa from 10Mtpa has been delayed to
December 2013 as a result of the abovementioned Warden's
Court process.
Utah Point Port and Boodarie Link expansions
Since commissioning of the Utah Point Port in September 2010,
Atlas' confidence in the ability of the port to deliver and
sustain Atlas' expansion objectives has increased. As a
result, Atlas will now look to further incrementally expand
facilities at the Port to support expanded mine production.
This will require further investment in Utah Point by Atlas
and its contractors, in developing expanded landside
facilities.
These facilities include upgrades within the Yard 2 land
area, including; more sophisticated stacking and reclaiming
infrastructure, and ultimately the interconnection of Yard 2
facilities to the terminal of the off-highway haul road
solution in the Boodarie Industrial Estate.
Discussions on infrastructure capital funding and operations
solutions with third parties are well advanced.
Further enquiries please contact
Ken Brinsden, Managing Director Tel: +618 9476 7900
Mark Hancock, Chief Commercial Officer
Production and Shipping Targets
The production and shipping targets for Atlas' DSO projects
are subject to the completion of all necessary feasibility
studies, environmental permitting, port access, financing
arrangements, execution of infrastructure related agreements,
necessary agreements with joint venture parties and timely
project construction
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