Mine Production and Shipping

Transcription

1 Mine Production and Shipping Ore production has grown significantly over the 12 months, as the Company continued to expand its Pardoo mine and commenced development of its Wodgina DSO Project. All of the mine production was sourced from the Company s Pardoo DSO Project during the period. Whilst mining had commenced at the Wodgina DSO Project prior to year end, there were no significant ore tonnages during the pre-strip phase of its development. Table 1: Mine Production 12 Months to June (t) 12 Months to June (t) Variance Year (t) Variance Year (%) Ore Tonnes Mined 1,239, , , % Ore Tonnes Processed 1,258, , , % Ore Tonnes Shipped (Dry) 1,109, , , % Ore production is now well underway at Wodgina with the first shipment exported from the recently constructed Utah Point facility during September Combined production from the Company s Pardoo and Wodgina Projects is expected to reach 6Mtpa by the end of calendar year 2010, with exports going through the newly commissioned Utah Point port facility. Our contractors are a very important part of our team. They make a huge contribution to our business. These people so often go the extra mile to deliver outstanding results. Their efforts are much appreciated. ATLAS IRON LIMITED 13

2 North Pilbara Process Flow Chart for 6Mtpa through Utah BOBBY RIDLEY ALICE OLIVIA E45/2330 CONNIE SOUTH LIMB Great Northern Highway Y a rrie Railway ,000 Fe mineralisation Proposed open cut mining areas Atlas Pardoo Project mine layout 14 ANNUAL REPORT 2010

3 Pardoo DSO Project Atlas Pardoo DSO Project is located just 75 kilo by road from the port of Port Hedland, in the Pilbara region of Western Australia. The Company has continued to expand production at Pardoo with the mine now operating at an equivalent annualised production rate greater than 1.5Mtpa, with production set to grow up to 2Mtpa by the end of the 2010 calendar year. Recent production performance at the mine indicates that it is well on track to achieve this aim. Table 1 outlines the mines production during the 2009 / 2010 financial year. Subsequent to year end, and until the end of August 2010, Atlas had shipped a further 243,559 wet tonnes of DSO ore. Barring a single shipment through the Port Hedland Port Authority s Berth 1 facilities, Atlas has continued to utilise Fortescue Metals Group s port facilities at Anderson Point on a fee-for-service basis. Atlas and Fortescue are the first companies in the Pilbara to have agreed 3rd party infrastructure access agreements. With the agreement well established and over 1.4 million tonnes loaded, the agreement constitutes a watershed in what can be achieved in the Pilbara through cooperative development. Mining during the year focussed on the Bobby, Alice East and West, Connie and South Limb pits with development of the Alice East Extension pit also commencing during the period. Production from each source is optimised to achieve the targeted ore specification, whilst also maximising the life-of-mine. The Company chose to change-out its mining contractor for the Pardoo site during the year following concerns with the contractor s operating performance. As a result, the primary site contractor is now Mining and Civil Australia (MACA), with MACA carrying out both mining and crushing and screening activities. In difficult circumstances (short notice mobilisation) MACA have provided an excellent level of service and positioned the Company well to achieve its production objectives. Consistent with the Company s previous advice, the cash cost of production has continued to decline as production from the Pardoo mine increases. This trend is expected to continue as production from the mine ramps up further and economics of scale are realised. During the year, the Company continued to expand its facilities at the Pardoo Mine with the installation of a new crushing and screening plant and mine camp facility. With this infrastructure now in place the Company now has sufficient facilities to support an expanded production base up to 2.4Mtpa, with production up to 2.0Mtpa targeted by the end of the year. Current mine approvals support production up to 3Mtpa....the Company continued to expand its facilities at the Pardoo Mine with the installation of a new crushing and screening plant and mine camp facility. ATLAS IRON LIMITED 15

4 Wodgina DSO Project The Wodgina DSO Project is just 100km due south of Port Hedland immediately adjacent to the existing Wodgina Tantalum Mine. Mining commenced at the Anson pit at Wodgina during June 2010 (see Atlas announcements dated 30 April and 21 June 2010), within 18 months of the Company s first discovery of iron ore at the Project. Construction at the project is now complete. Wodgina commenced producing finished ore stockpiles in August 2010 with first ore haulage to the port in early September Tonnes for export for the Utah Point commissioning in September 2010 have come from the significant stocks Atlas has built in Port Hedland adjacent to the port facility. With the commencement of mining at Wodgina and the delivery of the new multi-user port at Utah on 17 September, Atlas is on track to more than quadruple combined Pilbara iron ore exports to 6Mtpa rate by December Following an extensive tender process, BGC Limited was appointed as the site s Primary Mining Contractor. BGC are highly experienced within the iron mining arena with significant contracts underway elsewhere within the industry. BGC are now fully manned up and rapidly expanding the mining capacity of Atlas Iron. Taking advantage of the infrastructure access agreement established with Talison Minerals, the owners of the Wodgina Tantalum mine, and capitalising on the fantastic exploration success generated at the project over the last 2 years, the Company has executed a low capital cost project with the capacity to produce at a rate of 4Mtpa by late Overall production for the Wodgina DSO Project is expected to peak at approximately 4.2Mtpa in the medium term. The Company is targeting reducing its operating costs during the year as economies of scale are achieved. Utah Point Port Facility Construction of Port Hedland Port Authority s Utah Point port facility in Port Hedland harbour continued during the period and is now nearing completion with commissioning of the port in September As a result, Atlas is expecting to ship iron ore through the Utah Point facility in Port Hedland harbour at a rate of 6Mtpa by the end of 2010 via combined production from its Pardoo and Wodgina mines. Through the recent acquisition of Aurox Resources, Atlas allocation through the Utah Point facility will grow to 9Mtpa (+2Mtpa in efficiency gains, subsequent to the installation of higher rate reclaiming facilities at the Port) from March 2012, and then to 15Mtpa (+4Mtpa on departure of BHPB) from September With its Utah Port capacity, existing and proposed mine developments, Atlas is positioned to become the 4th largest listed iron ore exporter in Australia within 2 years....atlas is positioned to become the 4th largest listed iron ore exporter in Australia within 2 years. First mining at the Anson Deposit, Wodgina 16 ANNUAL REPORT 2010

5 E45/ ,000 me P45/ ,000 me Tenement boundary Anson Fe Reserve 673,000 me 320 man Camp tennis court swimming pool gymnasium 674,000 me 110km to Port Hedland Targeted Fe Reserve Fe Mineralised Outcrop Gas Pipeline AGO Drilling to date 7,658,000 mn 7,658,000 mn Power Station Camp Access Road M45/351 M45/923 Administration and Offices 7,657,000 mn Haul Road ROM Crushing and Screening Plant 7,654,000 mn E45/2175 M45/1188 7,656,000 mn Mining Contractor Laydown and Workshops Wodgina mine layout and existing Wodgina mine infrastructure Utah Point Multi User Berth (with locally constructed 7,500 tonne/hr ship loader in place) ATLAS IRON LIMITED 17