MARCH 2009 QUARTERLY REPORT 30 April 2009 ATLAS IRON LIMITED HIGHLIGHTS FOR THE QUARTER ASX SYMBOL: AGO Three long term off-take agreements executed for the remaining ABN 63 110 396 168 70% of Pardoo DSO Project product. Ground Floor Increased Pilbara DSO Resources by 45% to 56.7 million tonnes. 10 Richardson Street WEST PERTH WA 6005 225,923 ore tonnes mined for the quarter. PO Box 223 200,771 dry tonnes shipped for the quarter, with production WEST PERTH WA 6872 ramping up to the planned 1 million tonnes per annum. Phone +61 8 9476 7900 Further drill results from Wodgina Fax +61 8 9476 7988 o 46 metres at 58.3% Fe; www.atlasiron.com.au o 38 metres at 59.1% Fe; and CONTACTS o 26 metres at 60.8% Fe. David Flanagan Entered into a binding Heads of Agreement with Talison for the Managing Director use of infrastructure at the Wodgina mine. Mark Hancock High grade drill intercepts announced in exploration at Pardoo Chief Financial Officer (Alice East) Ken Brinsden 96 metres at 63.3% Fe; Operations Manager o Andrew Paterson o 66 metres at 62.6% Fe; and Geology Manager o 44 metres at 64.1% Fe. Tony Walsh Port Hedland Port Authority commenced construction of the new Company Secretary Utah Point export facility, due for completion in the second quarter of 2010. About Atlas Iron Limited Atlas is a rapidly growing iron ore explorer and miner Subsequent to end of March Quarter in the Pilbara of Western Australia. Announced outstanding drill results from Wodgina The Company commenced o 68 metres at 60% Fe, and export of iron ore from Pardoo in December 2008 o 46 metres at 60.6% Fe. and is on target to grow Reported Ridley Magnetite Reserve - 970 million tonnes at 36% production to 3Mtpa by Fe, DTR grade of 68.3% Fe and 3.8% SiO . 2010. 2 With ongoing success from Delivered Ridley Magnetite PFS results for expanded concentrate the Abydos project, the production of 15 million tonnes per annum at 68.3%Fe. Company is targeting total export tonnage of 6Mtpa Secured six million tonnes of annual iron ore port capacity at the from 2010 and 12Mtpa by Utah Berth public assess port facility. 2012. Atlas has $67.1m cash and no debt as at 29 April. QUARTERLY REPORT ATLAS IRON LIMITED March 2009 INTRODUCTION Atlas Iron Limited (Atlas or Company) is exporting iron ore through the port of Port Hedland and actively exploring for Direct Shipping Ore (DSO) in the Pilbara of Western Australia. With a growing number of high quality iron ore projects and one of the largest exploration landholdings in the Pilbara (over 8,900 kilometres2 located close to existing infrastructure), the Company is effectively defining resources and reserves capable of being mined with relatively low capital expenditure. The Company is targeting a total of 170 to 220 million tonnes of iron ore at between 57% Fe and 60% Fe from its combined Pilbara projects. Figure 1: Pilbara Project Location Plan While exporting iron ore from the Pardoo mine (Atlas’ first mine development), Atlas is also active in feasibility assessment, new acquisitions, target generation and grass roots exploration. Ongoing project definition through acquisition, exploration and feasibility projects has delivered a strong project pipeline which the Company considers has the potential for production rates up to 12 million tonnes per annum of Direct Shipping Ore (DSO) by 2012. As the Company demonstrates its capacity to discover, assess and execute, it is well positioned to advance a number of projects concurrently with the intention to both expand the Company’s production base and extend mine life. MARCH 2009 QUARTERLY REPORT Page 2 of 11 QUARTERLY REPORT ATLAS IRON LIMITED March 2009 PARDOO PROJECT Atlas’ Pardoo Project is located 75 kilometres by road from the Public Access Port of Port Hedland, in the Pilbara of Western Australia. Mining and the export of iron ore shipments has now commenced and the Company is targeting exports of 1 million tonnes of DSO iron ore during its first 12 months of operations. Production at Pardoo is anticipated to grow to 3 million tonnes on an annualised basis by 2010. Exploration, Resources and Mine Development – Pardoo DSO Exploration and Resource Development Drilling During the March quarter the Company completed 190 RC holes for 8,218 metres and 3 diamond holes for 190 metres at Pardoo. The drilling consisted of follow-up resource definition and exploration work around existing resources at Isobel, Olivia and Willy, as well as some additional drilling at Alice and Alice East. Further infill and extensional drilling is planned at Pardoo in the latter half of the June Quarter. Figure 2: Pardoo Project: Site location plan Pardoo DSO Mine Development and Production Construction of Stage 1 at the mine was essentially complete at the end of the March quarter, with only minor works outstanding including water bore commissioning, minor road works and MARCH 2009 QUARTERLY REPORT Page 3 of 11 QUARTERLY REPORT ATLAS IRON LIMITED March 2009 office/admin facilities completion. Stage 1 comprises the works required to establish mine production at the targeted 1 million tonne per annum production rate. Full working faces are now established within the Bobby and Connie pits, with pit development works in progress at Alice East and West. Ore tonnes mined and processed during February and March were consistent or higher than the targeted 1Mtpa initial mine production rate. Table 1 below outlines the March 2009 quarter production in comparison to the previous quarter (December 2008). Table 1: Pardoo Mine Production March December Variance Variance Quarter 09 Quarter 08 Quarter (%) (t) (t) (t) Ore Tonnes Mined 225,923 167,190 58,773 +35% Ore Tonnes Processed 234,329 143,400 90,929 +63% Ore Tonnes Shipped (Dry) 200,771 56,653 144,148 +254% During the quarter the Port Hedland Port Authority announced that the required approvals for the proposed Utah Point export facilities were granted, and that construction of the facility had commenced. Atlas looks forward to the commissioning of Utah during the second quarter of 2010 to facilitate the first 3Mtpa allocation Atlas secured as a foundation customer for the facility. Subsequent to the end of the quarter the Company was pleased to announce that it had also secured a further 3Mtpa annualised capacity until February 2012, taking the Company’s total capacity at Utah to 6Mtpa until February 2012, providing an opportunity for the Company to secure initial capacity for its Abydos/Wodgina project development. Consistent with Company’s objective of growing the Pardoo Mine production to 3Mtpa during 2010 work is underway to expand the mines production base, including consideration for the installation of a larger crushing and screening plant (via contract arrangements) to handle the increased throughput. Mine approval submissions for the expanded mine capacity are well progressed. In parallel, discussions are continuing with Fortescue Metals Group to facilitate higher export volumes for the Pardoo Project through the Anderson Point facility in Port Hedland Harbour whilst the Utah Point Facility is under construction. ABYDOS DIRECT SHIPPING ORE (DSO) PROJECT The Abydos Project is located 100 kilometres south of the Public Access Port of Port Hedland in the Pilbara of Western Australia. Similar to Pardoo, the project area contains potential for hosting significant bedded supergene iron ore deposits (BID) and channel infill deposits (CID). The project area contains prospective Archaean banded iron formation host rocks abutting BHP-Billiton State Agreement tenements, known to host iron ore mineralisation. Exploration, Resources and Mine Development Resource Development During the March quarter, with Wodgina becoming the main focus of the Company’s exploration effort, there was no RC drilling completed at Abydos. A small team of Resource Development personnel remained at Abydos conducting regional reconnaissance and rock chip sampling, prospect mapping and drill pad rehabilitation. MARCH 2009 QUARTERLY REPORT Page 4 of 11 QUARTERLY REPORT ATLAS IRON LIMITED March 2009 Figure 3: Lalla Rookh Mineralised Trend Abydos DSO Mine Development The Company has completed a Preliminary Feasibility Study (PFS) for its proposed 3Mtpa DSO project (based on its core Abydos tenement package) and subject to achieving approvals in line with statutory guidelines Atlas is targeting mine production from late 2009. Upon the successful completion of the PFS during July 2008, the Company embarked on the Definitive Feasibility Study (DFS), which is now well underway. The Abydos DFS is scheduled for completion in June 2009, at which time the Atlas Board will consider mine development. Atlas has previously announced that it had entered into a binding Heads of Agreement which contemplates infrastructure sharing with Talison Pty Ltd, the owners of the Wodgina Tantalum mine. The ability of the Company to access the Wodgina mine infrastructure provides significant advantages in the Abydos projects development through reduced up-front capital expenditure, improved environmental approvals processes and reduced operating expenditure. Infrastructure sharing opportunities are enhanced further with the ongoing exploration success Atlas is generating in its Wodgina exploration activities (see following). MARCH 2009 QUARTERLY REPORT Page 5 of 11 QUARTERLY REPORT ATLAS IRON LIMITED March 2009 Figure 4: Abydos DSO Project – Pre Feasibility Study Mine Layout Engineering assessment contributing to the Abydos Project DFS is ongoing and includes detailed road designs, rail crossing assessments, disturbance footprints and infrastructure layouts. These elements will contribute to the submission of the Company’s formal approvals documentation for submission to government prior to the end of the June quarter. All studies contributing to the proposed Abydos mines approvals process are either completed or nearing completion. Upon completion of the aforementioned surveys and studies, the data will then be compiled for inclusion within the ‘Environmental and Social Impact Assessment’ that will form the basis for the ongoing project approvals in line with government requirements.