Atlas secures final off-take agreements

Atlas Iron has now secured off-take agreements for 100% of its Pardoo DSO product for the next three years.

Atlas Iron has now secured off-take agreements for 100% of its Pardoo DSO product for the next three years.

Three agreements accounting for 70% of the iron ore have been reached with three medium-sized Chinese steel mills.

An agreement announced in December 2008 accounted for the initial 30%.

The first shipments under these offtake agreements are expected to be completed by the end of June 2009.

Ore for the initial shipments will be sourced from the Bobby and Alice deposits at the Pardoo Project, where mining is currently underway.

The three agreements include an adjustment mechanism which applies only in the event that spot prices and benchmark prices materially diverge.

Once activated, this mechanism serves to adjust the sales price mid-way to the spot price, in order to maintain the fairness of contract pricing to both parties.

Atlas will soon commence negotiations with interested trading groups and steel mills for sales of product from its Abydos DSO Project.

Atlas is planning to export one million tonnes during its fi rst 12 months of operations at the Pardoo Project, growing to three million tonnes per annum in the second year.

With additional export tonnages from Abydos, Atlas is targeting total exports of six million tonnes per annum for 2010, growing to 12 million tonnes by 2012.

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