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Atlas Iron to Continue Production

Atlas Iron to Continue Production
May 01, 2015 By Imran Valibhoy Simon Herrmann

In an announcement to the ASX on Friday, Atlas Iron (ASX:AGO) reported that it would continue production at its Abydos project next month. Earlier in the month the company suspended mining after iron price prices fell even further. Mining will also recommence at Wodgina as soon as possible in May, with processing and haulage restarting soon afterward. Two of three suspended mines will continue production after iron ore prices recovered significantly in April. The decision to continue the production operations is due to a significant reduction of forecasted cash costs at the mines. The cost reductions were achieved with the help of the company’s key service providers. Atlas said it would continue to work on defining contractual arrangements with key contractors now that contracting initiatives are economically viable again.

 Part of the decision to resume production was due to the successful production and sale of the company’s first lump cargo from Abydos last month. Up to 65 per cent of Abydos’ production will be in lump production and will be priced at a premium subject to variable iron ore market conditions. Atlas said it expects to be cash flow-positive in May due to its new operating model combined with a positive pricing momentum. The company will continue to monitor its operations in the Mt Webber mine for a potential reopening. Shares of the company have been suspended from trading on Friday. It’s last trading price came in at 12c per share. AGO has fallen over 86 per cent in the last 12 months and 27.27 per cent so far this year.

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Imran Valibhoy Author: Imran Valibhoy May 01, 2015

Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.

Simon Herrmann Author: Simon Herrmann May 01, 2015

Simon is a financial analyst at independent research firm Wise-owl who wants to change the world by disrupting the cliché approach to investment decision making with convergent thinking. Wise-owl’s goal is plain and simple: Find the best opportunities for our members by following a proven methodology and to create long-term value through high-quality advice, innovation, technology and education. We combine industry experience and the agile mentality of a start-up. Wise-owl is the future of stock market investing.

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