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Atlas Iron says it will pay $33 million for the final 25 per cent stake of the Daltons tenements near its existing operations.
The company said the tenements will be bought from its joint venture partner Haoma Mining for $10 million in cash and $23 million in discounted Atlas shares.
In a statement Atlas said the acquisition was an important part in developing its Mt Webber project.
"Mt Webber is a crucial piece of the Atlas growth strategy, which will involve the construction of several new mines to increase our total production rate to 12 Mtpa by June 2013 and which will ultimately see the company use rail transport for the first time as it targets increasing annual production to 46 million tonnes by 2017."
The remaining exploration tenements are still subject to the existing joint venture between Atlas and Haoma.
Atlas said it would make additional payments to Haoma if there were any upgrades to resource reserves on the Daltons tenements.
According to The Sydney Morning Herald Haoma has traditionally focused on gold development and the company is expected to explore for minerals other than iron ore on the remaining tenements it holds with Atlas.