Shares in Atlas Iron (AGO) rose by as much as 6.88% today after the iron ore explorer announced it has entered into an agreement to acquire the iron ore rights to ten tenements in Western Australia's Pilbara region from unlisted tantalum miner Talison Minerals Pty Ltd.
Atlas has agreed to pay $4 million to Talison in Atlas shares after a formal agreement, set to be executed by 30th June 2008.
Under the terms of the agreement, Talison will retain the rights to other minerals and is entitled to a 0.5% revenue-based royalty if Atlas develops an iron ore resource greater than five million tonnes.
Atlas said the newly acquired tenements are between 75 and 160km from Port Hedland, less than 60km from Fortescue Metals Group's and BHP Billiton's railways, and not far from a major highway. Some of the tenements also adjoin the company's Abydos project.
"This acquisition adds to Atlas' Pilbara interest and provides us with the opportunity to apply our iron ore exploration expertise on an additional 10 tenements in a world class iron ore province", said Atlas managing director David Flanagan.
"These tenements are very prospective for iron ore and we look forward to doing a thorough examination of the iron ore potential."
At Atlas' Abydos project, the company is planning to generate annual export tonnage greater than six million tonnes per annum (Mtpa) from 2010.
At its nearby Pardoo project, Atlas says it is on track to commence exports by October, ramping up production to 3Mtpa by 2010.
Shares in Atlas were 7 cents higher to close at $1.96 on Friday.
