David Flanagan Atlas Iron Limited 67
ASX Small to Mid Caps Conference Hong Kong 2008 Disclaimer
This presentation has been prepared by Atlas Iron Limited (“Atlas” or the “Company”). It should not be considered as an offer or invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No agreement to subscribe for securities in the Company will be entered into on the basis of this presentation.
This presentation contains forecasts and forward looking information. Such forecasts, projections and information are not a guarantee of future performance, involve unknown risks and uncertainties. Actual results and developments will almost certainly differ materially from those expressed or implied.
There are a number of risks, both specific to Atlas and of a general nature which may affect the future operating and financial performance of Atlas and the value of an investment in Atlas including and not limited to economic conditions, stock market fluctuations, iron ore demand and price movements, timing of access to infrastructure, timing of environmental approvals, regulatory risks, operational risks, reliance on key personnel, reserve and resource estimations, native title and title risks, foreign currency fluctuations, and mining development, construction and commissioning risk.
You should not act or refrain from acting in reliance on this presentation material. This overview of Atlas does not purport to be all inclusive or to contain all information which its recipients may require in order to make an informed assessment of the Company’s prospects. You should conduct your own investigation and perform your own analysis in order to satisfy yourself as to the accuracy and completeness of the information, statements and opinions contained in this presentation before making any investment decision. Pilbara Iron Ore Strategy
Production October 2008 Strong Team Near Term Cashflows Low Capital Cost World’s Largest Iron Ore Port World’s Largest Iron Ore Region Large prospective landholding Strategically located tenements First and only third party rail and port access agreement with FMG
3 Corporate
Shareholding Atlas has a very strong shareholder register, IMC Group 19.6% comprising of international and domestic institutions. Black Rock 6.2%
Hunter Hall 5.9%
LinQ Resource Fund 4.9%
Top 20 56.5%
Capital Structure
Ordinary Shares 291M
Market Cap at $1.46 $425M
Cash ~A$120M Debt A$0m Equity Positions Enterprise Value $305m •19.9% Warwick Resources (ASX Code :WRK) Iron Ore Developer Options 48m •40% Shaw River Resources (ASX Code :SRR) Diversified Explorer All $ figures refer to AUD.
4 Board and Management
Board of Directors Key Management Non Executive Chairman David Nixon Operations Manager Ken Brinsden
Managing Director David Flanagan General Manager Pardoo Jeremy Sinclair
Non Executive Director Jyn Sim Baker Chief Financial Officer Mark Hancock
Non Executive Director David Hannon Exploration Manager Mark Gunther
Non Executive Director Geoff Clifford Land Tenure & Approvals Garry Plowright
Company Secretary Tony Walsh Mining Manager Pardoo Adam Liebenberg
Magnetite Project Director Bob Third
Iron Ore Marketing Daniel Taylor
5 Pardoo Mine Layout and Exploration Targets
6 Pardoo Mining Fleet
1 Abydos Proposed Mine Layout
8 Abydos Exploration Targets
Widths and grades reflect results from rock chip sample traverses 9 Mid West Projects
100% Ownership Granted Mining leases <20km to proposed rail route Target 30-40Mt at 60-63% Fe Pending Port and Rail First pass drilling completed at Weld Range – results pending Resource due Q4 2008
10 Project Pipeline – State of play
11 DSO Resources and Target DSO Resources Growth
Calendar Year Ending
12 DSO Conceptual Production Pipeline
1 – Mid-West Production is dependent on the timely delivery of the OPR Port and Rail which is currently due for completion in early 2013.. 13 Next 12 Months Milestones
DSO Production Oct 08 Pardoo DSO Off take agreement Oct 08 Ridley Magnetite Pre Feasibility Study Dec 08 Pardoo DSO Exports Dec 08 Complete Mid-West Scoping Study Jan 09 Revised Resources and Reserves (All Projects) Jan 09 Complete Abydos Definitive Feasibility Study Jun 09 Revised Resources and Reserves (All Projects) Jul 09 Abydos DSO Off take agreement Sep 09
14 Appendix
1. DSO Resources and Reserves July 2008 2. Magnetite Resources 3. Project Development Pipeline 4. Pardoo Mine FlowSheet 5. Path to Production 6. JORC Statements
15 1. DSO Resources and Reserves
16 2. Magnetite Resource
17 3. Project Development Pipeline
PARDOO PARDOO ABYDOS ABDYDOS ABDYDOS MIDWEST PARDOO TOTAL (1Mtpa) (3Mtpa u/g) (3mtpa s/u) (6mtpa u/g) (9mtpa ug) DSO MAGNETITE
Current Resources DSO (Mt) 24 24 15 39 Mt --- Current Resources Mag (Mt) 1.45Bt 1.45Bt
Current Reserves (Mt) 7.4 7.4 - - - - 14.8 Mt
Exploration Target Mt Mag (36 – 38% Fe) - 1.8-2.2 Bt 1.8-2.2 Bt Exploration Target Mt DSO (57-60% Fe)3 30-40 Mt 30 -40 Mt 90-140 Mt 90 -140 Mt 90 -140 Mt 30 -40 Mt 150-220Mt
Target additional Production (MTPA) 1 2 3 3 3 4 51 21 Mtpa1
Target Production Commence Oct 2008 Dec 2009 Dec 2009 Dec 2010 Dec 2010 2013 2013
Target Mine Life +5 Yrs +10 Yrs +10 Yrs +10 yrs +10 yrs +6 Yrs +30 Yrs
Lump:Fines Ratio 40:60 40:60 TBC TBC TBC TBC Conc.
Strip Ratio (waste:ore) 1.8:1 1.8:1 <2:1 <2:1 <2:1 TBC 0.5:1
Transport Road Road Rail / Road Rail Rail Rail / Road Pipe / Rail
Distance to Port 75 km 75 km 125 km 150 km 150 km ~450km 75 km
FMG2/ FMG2 / 2 FMG2 / Port Facilities PHPA2 FMG /PHPA FMG2/PHPA2 Ger/Oak PHPA PHPA2 2 PHPA2
1 – Target magnetite project concentrate production capacity = 15Mtpa, Atlas equity production = 5Mtpa. 2 – Port Access agreement completed 3 – Exploration Target Grade 60 to 63% Fe on Midwest tenements. 18 4. Path to Production – Project Timetables
As a company we are proud of our record of delivering on our promises and will protect this reputation
Pardoo DSO Abydos DSO Mid West DSO Ridley Magnetite
First Drill Testing 3 Aug 2005 3 Sep 2007 3 Sep 2008 3 Sep 2006
Resource Definition 3 July 2006 3 Oct 2007 Dec 2008 3 July 2007
Scoping Study 3 Nov 2005 3 Dec 2007 Dec 2008 3 Jul 2007
Native Title Agreement 3 Mar 2006 Jul 2009 Jun 2010 3 Mar 2006
Pre Feasibility Study 3 Jan 2007 Jul 2008 Dec 2009 Dec 2008
Definitive Feasibility 3 Jul 2007 Mar 2009 Dec 2010 Dec 2010 Study
Award Mining Contracts 3 Apr 2008 Aug 2009 Aug 2011 Jun 2011
Complete Project Jun 2008 Sep 2009 Q3 2011 ~Sep 2011 Permitting
Next Resource Upgrade Q4 2008 Q4 2008 Q4 2008 Q4 2008
Commence Mining / Aug 2008 Oct 2009 Oct 2009 Jan 2012 Construction
Commence Production Oct2008 Dec 2009 Q2 2012 Q1 2013
Commence Shipping Dec 2008 Feb 2010 Q1 2013 5. Pardoo Mine Flow Sheet
20 6. JORC Statement 1 of 2
Pardoo DSO Project – References to Exploration/Production targets and Potential Atlas has reported on 25 July 2008 a resource of 24.05 million tonnes at 56.0% Fe and a probable reserve of 7.387 million tonnes at 57.3% Fe at its 100% owned Pardoo DSO Project. While the company intends to do further exploration on the Pardoo Project tenements and remains optimistic it will report additional resources and reserves in the future, any discussion in relation to targets, resources, reserves or ‘ore’ over and above the resource of 24.05 million tonnes at 56.0% Fe and a probable reserve of 7.387 million tonnes at 57.3% Fe is only conceptual in nature. There has been insufficient exploration to define a Mineral Resource over and above the resource of 24.05 million tonnes at 56.0% Fe, and it is uncertain if further exploration will result in the determination of a Mineral Resource over and above the resource of 24.05 million tonnes at 56.0% Fe nor the development of a reserve over and above the probable reserve of 7.387 million tonnes at 57.3% Fe .
Abydos Project – References to Exploration/Production targets and Potential Atlas has reported on 30 July 2008 a resource of 15.13 million tonnes at 56.9% Fe and a probable reserve of 7.428 million tonnes at 58.1% Fe at its 100% owned Abydos DSO Project. While the company intends to do further exploration on the Abydos Project tenements and remains optimistic it will report additional resources and reserves in the future, any discussion in relation to targets, resources, reserves or ‘ore’ over and above the resource of 15.13 million tonnes at 56.9% Fe and probable reserve of 7.428 million tonnes at 58.1% Fe is only conceptual in nature. There has been insufficient exploration to define a Mineral Resource over and above the resource of 15.13 million tonnes at 56.9% Fe, and it is uncertain if further exploration will result in the determination of a Mineral Resource over and above the resource of 15.13 million tonnes at 56.9% Fe nor the development of a reserve over and above the probable reserve of 7.428 million tonnes at 58.1% Fe.
Ridley Magnetite – References to Exploration/Production targets and Potential Atlas has reported on 2 October 2008 a magnetite resource of 1.45 billion tonnes at 36.6% Fe at its 100% owned Pardoo Project. While the company progresses the pre feasibility study assessing the projects economics, and remains optimistic it will report additional resources in the future, any discussion in relation to targets, resources, reserves or ‘ore’ over and above the resource of 1.45 billion tonnes at 36.6% Fe is only conceptual in nature. There has been insufficient exploration to define a Mineral Resource over and above the resource of 1.45 billion tonnes at 36.6% Fe , and it is uncertain if further exploration will result in the determination of a Mineral Resource over and above the resource of 1.45 billion tonnes at 36.6% Fe , nor the development of a reserve.
MidWest Projects - References to Exploration/Production targets and Potential While the company remains optimistic it will report resources and reserves in the future at its MidWest Projects, any discussion in relation to exploration targets, resource potential, reserves or ‘ore’ is only conceptual in nature, there has been insufficient exploration to define a Mineral Resource at the company’s MidWest Projects and it is uncertain if further exploration will result in the determination of a Mineral Resource.
References to Rock chip sample traverses Rock chip traverse sampling method involved collection a sample totaling approximately 1 to 2 kilogram of rock chips collected by hammering surface outcrop at nominal 1 meter spacing along a predetermined traverse generally across strike of mineralization. Several rock chips are collected at each nominal 1 m spaced sampling spot. Exploration Results in General The information in this report that relates to exploration results is based on information compiled by Mr. Mark Gunther who is a member of the Australian Institute of Geoscientists and is an employee of Atlas Iron Limited. Mark Gunther has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results. Mark Gunther consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Dollars All references to Dollars are Australia Dollars 21 JORC Statement 2 of 2
Reserve Estimation The information in this report that relates to reserve estimations is based on information compiled by Mr Ken Brinsden who is a member of the Australasian Institute of Mining and Metallurgy. Ken Brinsden is a full time employee of Atlas Iron Limited. Ken Brinsden has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Ken Brinsden consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Geological Data, Interpretation and Resource Estimation – Alice, Clare, Hubert, Glenda, and Connie Resources The information in this report that relates to mineral resource results is based on information compiled by Mr Hamish Pescini & Mr Richard Gaze who are members of the Australasian Institute of Mining and Metallurgy. Hamish Pescini is a full time employee of Atlas Iron Limited and Richard Gaze is a full time employee of Golder Associates Pty Ltd. Hamish Pescini & Richard Gaze have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they have undertaken to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves’. Hamish Pescini and Richard Gaze consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.
Geological Data, Interpretation and Resource Estimation – Bobby, Floyd, Emma, Olivia, Avalon Point, Mettams, Mullaloo, and Trigg Resources The information in this report that relates to mineral resource results is based on information compiled by Mr Hamish Pescini & Mr David Williams who are members of the Australasian Institute of Mining and Metallurgy. Hamish Pescini are full time employees of Atlas Iron Limited and David Williams is a full time employee of CSA Global Pty Ltd. Hamish Pescini & David Williams have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they have undertaken to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.Hamish Pescini and David Williams consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.
Geological Data, Interpretation and Resource Estimation – South Limb and Dean Resources The information in this report that relates to mineral resource results is based on information compiled by Mr Hamish Pescini & Mr Malcolm Titley who are members of the Australasian Institute of Mining and Metallurgy. Hamish Pescini is a full time employee of Atlas Iron Limited and Malcolm Titley is a full time employee of CSA Global Pty Ltd. Hamish Pescini & Malcolm Titley have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they have undertaken to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Hamish Pescini and Malcolm Titley consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.
Geological Data, Interpretation and Resource Estimation – Magnetite The information in this report that relates to mineral resource results is based on information compiled by Mr Malcolm Titley who is a member of the Australasian Institute of Mining and Metallurgy. Malcolm Titley is a full time employee of CSA Global Pty Ltd. Malcolm Titley has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they have undertaken to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Malcolm Titley consents to the inclusion in the report of the matters based on their information in the form and context in which it appears. Employees and consultants who contributed significantly to the geological and resource interpretation of the Ridley magnetite resource include Hamish Pescini of Atlas Iron and David Archer of Archer Geological Consulting
22 Pilbara’s Emerging Powerhouse