Atlas merges with Warwick

Atlas Iron has agreed to an all-share merger with explorer Warwick Resources.

Emerging iron ore producer Atlas Iron has agreed to an all-share merger with explorer Warwick Resources, the company announced this morning in a statement to the Australian Securities Exchange.

Under the terms of the deal, Atlas will issue one of its shares for every three Warwick shares on issue.

According to Atlas, the merger deal represents a 48% premium for Warwick shareholders based on the price of Warwick shares over the past 30 days.

The merger will see the combined company with direct shipping ore (DSO) resources of 154 million tonnes, as well as exploration targets of 165 to 338 million tonnes at 56% to 60% Fe and a Pilbara landholding of more than 15,000km2.

The combined company will ultimately be targeting an export rate of 26 million tonnes of DSO per annum by the end of 2014, Atlas managing director David Flanagan said.

“Larger export tonnages mean lower fixed costs, better buying power, a significant increase in cashflow, stronger returns for shareholders and a more substantial business for the long term,” he said.

“We also look forward to using a longer life production pipeline to make a lasting positive impact in the communities where we operate.”

Atlas began mining and exporting from its maiden 100% owned Pardoo iron ore project in the Pilbara in December 2008.

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