For personal use only For personal use only For personal use only For personal use only 2 4 Our Vision & Atlas Spirit 6 Our Values 8 Our History 10 Highlights 12 Our Board 15 Chairman’s Review 19 Managing Director’s Review 23 Operations Review 27 Mine Production & Shipping 28 Pardoo Mine Operation 29 Wodgina Mine Operation 30 Utah Point Port Facility 33 Corporate Review 37 Financial & Commercial Review 37 Iron Ore Sales and Marketing 41 Commercial 45 Financial 47 Government Relations 49 Development 55 Projects 59 Land Access, Heritage & Approvals 61 Exploration & Resource Development 67 HSEC 67 Health & Safety 68 Environment 70 Community 72 Philanthropy 75 Our People 78 Employment Opportunities & Diversity 80 Auras 81 Financial Report 82 Corporate Information 84 Directors’ Report 105 Financial Statements 152 ASX Additional Information 154 Corporate Governance Statement For personal use only 3 To build a truly great Australian company that is a fantastic place to work, makes the world a better place and delivers outstanding returns for shareholders. A company our families are all proud of. For personal use only 4 ATLAS IRON LIMITED ANNUAL REPORT 2012 : OUR COMPANY The Atlas spirit is the foundation of its exceptional people and it’s in everyone’s hands. Every manager, leader and employee from the field to the boardroom, makes a genuine difference to the Company. We empower every empoyee to make a difference and recognise the impact that their contribution will have on the success of our business. As Atlas grows from strength-to-strength, it is this unique spirit that keeps us at the forefront of our industry. For personal use only 5 For personal use only 6 ATLAS IRON LIMITED ANNUAL REPORT 2012 : OUR COMPANY We challenge ourselves to be efficient and effective with available resources. We seek improvement and embrace change. We consider the safety aspect of everything we do. Employees own their safety and well being, in and out of work. Working together to meet challenges and develop solutions, we actively engage and support our people and understand and value the contribution of others. We are honest and fair in all our dealings and courageous in making hard decisions that support our business goals. Our decisions and actions will make our families proud. Our people are resilient. We approach challenges with courage and passion. For personal use only The people and organisations we engage with will benefit fairly. We give every opportunity a go and think long term with respect to the relationships we cultivate and nurture. 7 • 9 x employees • Initial concept of Utah Port facilities developed • Permitting started for mining of Pardoo • Sales dialogue in China began • 63 x employees • Landmark Native Title Agreement • Pardoo October with the Ngarla 2008 at 1Mtpa People • 1 x employee • First shipment to China in Dec 2008 – David Flanagan • 2 Spot cargo sales • Initial Public Offering • Wodgina discovery • List on ASX Dec • Global Financial 2004 Crisis • 5 x employees • Pardoo discovery For personal use only • Moderately successful in • 25 x employees the exploration • Abydos discovery of gold but not enough to raise strong interest from investors 8 ATLAS IRON LIMITED ANNUAL REPORT 2012 : OUR COMPANY • 10 millionth tonne • Commencement of construction of Abydos and Mt Dove Mine • 132 x employees • MOU with • $1.35B Mkt Cap QR National on • $120M Cash independent Pilbara Railway • 205Mt DSO Resource 46Mtpa • 54Mt DSO Reserve • Pardoo production 15Mtpa rate increased to 1.8Mtpa 12Mtpa • Aurox Merger • 226 x employees • Company produced at 6Mtpa • Maiden profit • Maiden dividend paid • First ship through new port facility – Utah Point • Giralia and • 72 x employees FerrAus takeover • Pardoo produced • ASX100 For personal use only at 1.3Mtpa • Mt Webber discovery • ASX200 • Warwick Merger 9 Revenues DSO Tonnes Shipped 5.6Mt $585m $618m 600 5 500 4.6Mt 4 400 3 300 2 Millions (m) 200 Reserves (Mt) 1.16Mt 1 100 $84.8m $26.4m 0.4Mt 0 0 2009 2010 2011 2012 2009 2010 2011 2012 Financial Year Financial Year DSO Resources* 1.1 Bt DSO Reserves 414 Mt 1.100 400 80 79 Mt 700 * incl SE Pilbara assets 644 Mt at 30 June 2011 70 600 60 54 Mt 500 50 400 40 300 30 Reserves (Mt) 25.5 Mt 205 Mt Resources (Mt) 200 20 14.8 Mt 100 94 Mt 10 4.4 Mt 7Mt 10.5 Mt 39 Mt 0 0 2006 2007 2008 2009 2010 2011 2012 2006 2007 2008 2009 2010 2011 2012 Years Years For personal use only 10 ATLAS IRON LIMITED ANNUAL REPORT 2012 : OUR COMPANY Operations Corporate Shipped 5.57Mt (4.6Mt - WMT) during the year Maintained strong cash position at 30 June ended 30 June 2012 2012 of $400m Shipped 10 millionth tonne to China Completed off market takeover of South East Pilbara iron ore explorer FerrAus Ltd in Nov 2011 Cash costs per tonne (FOB) within targeted range of A$42 to A$45 Ken Brinsden and Mark Hancock promoted to Managing Director and Executive Director, Commenced construction of Abydos and Commercial respectively Mt Dove mines Sold Yerecoin and Balla Balla magnetite projects Atlas on target to produce at a rate of 12Mtpa for circa $60 million in aggregate plus potential by December 2013 royalty stream 70% increase in DSO Reserves to 414Mt MOU with QR National to progress study on Expanded and extended Wodgina infrastructure independent Pilbara rail Maiden Reserve of 89Mt at McPhee Creek Maiden dividend of 3c per share paid to shareholders Total resources of 1.1 billion tonnes Revenue increases 6% to $618m For personal use only 11 DuringFor personal use only the year the following changes were made to the Atlas Board: • Mr Jeff Dowling joined as Non-Executive Director in November 2011. • In February 2012, Mr David Flanagan, previously Managing Director of Atlas, became Executive Chairman and Mr Ken Brinsden, previously Chief Development Officer of Atlas, was promoted to Managing Director. At the same time Ms Kerry Sanderson AO joined as a Non-Executive Director. • In May 2012 Mr Mark Hancock, also Chief Commercial Officer of Atlas, became Executive Director, Commercial in May 2012. At the same time Mr Geoff Simpson joined as a Non-Executive Director. • Mr Geoff Clifford, outgoing Chairman, retired in July 2011. • Subsequent to year end Mr David Flanagan became Non-Executive Chairman and Dr David Smith was elected Lead Independent Director. 12 For personal use only Left to right: Mark Hancock, Tai Sook Yee, David Smith, David Flanagan (seated), Kerry Sanderson AO, Tony Walsh, Ken Brinsden (seated), Geoff Simpson, Jeff Dowling.Absent: David Hannon 13 For personal use only 14 ATLAS IRON LIMITED ANNUAL REPORT 2012 : David Flanagan – Chairman We would like to thank shareholders for you wouldn’t have if you didn’t do that work. their support and loyalty during this Atlas is proud to support the communities important growth phase Atlas is in. We in which it operates and this year Atlas has are building a great Australian Resources done that well. A highlight this year was Atlas’ Company and look forward to rewarding Community Day where staff were able to shareholders for their continued support give back and support the community of Port and loyalty. Hedland. The day was an absolute success. This year has seen Atlas reach some important Atlas also sponsored Perth’s local 20/20 milestones. Atlas grew its ore exports from cricket team, the Perth Scorchers. 4.6Mt to 5.57Mt. At the same time Atlas This year, there has been some important improved its safety performance. Atlas also changes to the Atlas Board. Ken Brinsden, completed the acquisition of FerrAus Limited previously Chief Development Officer, was and the sale of its Balla Balla and Yerecoin promoted and appointed as Managing Director magnetite projects, and paid a dividend of and David Flanagan, previously Managing 3c per share to its shareholders. Importantly, Director, stepped into the role of Chairman. Atlas has delivered these results by conducting The Board also promoted Mark Hancock, its business consistent with its values Chief Commercial Officer, to Executive Director, and culture. Commercial and appointed three additional Atlas has positioned itself as a business that is not non-executive directors, Jeff Dowling, only capable but also responsible. Atlas would not Geoff Simpson and Kerry Sanderson AO. Atlas is have the capability or the resilience, nor would it proud to have two female directors on its Board have thrived without having engaged with the and have over 30% of its senior managers being communities the way that it has. This engagement female at year end, showing its commitment to builds resilience and an ability to do things that diversity in its workplace. For personal use only David Flanagan in the Pilbara. 15 For personal use only 16 ATLAS IRON LIMITED ANNUAL REPORT 2012 : CHAIRMAN’S REVIEW David Flanagan Chairman For personal use only 17 For personal use only ATLAS IRON LIMITED ANNUAL REPORT 2012 : Ken Brinsden – Managing Director The past 12 months has been a period reinvestment in the Company. That’s a very of consolidation across our mining and credible result considering the circumstances. export operations, including the first full These milestones demonstrate what Atlas is year of production from our Wodgina mine. capable of, we are fortunate to have some Combined production from the Wodgina and fantastic technical resources available to us within Pardoo mines is now 6Mtpa. the Company and this establishes a great platform The team at Atlas has continued to deliver despite for success as Atlas starts to introduce new mines. the challenges that confront the Company from time-to-time, like the Utah Point shiploader outage The next few years will be a very busy time for and cyclones that impacted our production in the Atlas as it strives towards delivering its Horizon 1 March quarter.