HIGHLIGHTSFOR THE SEPTEMBER 2011 QUARTER · 25/10/2011 · The Company is targeting exports at a...

ATLAS IRON LIMITEDQUARTERLY REPORT

SEPTEMBER 2011

SEPTEMBER 2011 QUARTERLY REPORT of 14

25 October 2011

HIGHLIGHTSFOR THE SEPTEMBER 2011 QUARTER 1.465 Mt (WMT) shipped during the September 2011 quarter, consistent with the June

2011 quarter.

Maiden dividend of 3 cents per share paid post quarter end following maiden annual profitannounced during the quarter

Atlas achieved an average price per tonne for its product of ~ USD 152/t CFR (DMT)

Unaudited notional cash operating costs (FOB, excluding royalties) remain consistent withguidance of $42-45/t range for the 2012 financial year

$373 million cash on hand at 30 September 2011. $390 million cash on hand at 21October 2011 after payment of $26.6 million in dividends post quarter end

Atlas’ successful off-market takeover offer of FerrAus Limited closed on 5 October 2011with Atlas moving to compulsory acquisition on 6 October 2011

DSO Resources at the end of the September 2011 quarter stand at 1.035Bt at 56.3%Fe

Atlas is on target to continue to ship at a rate of approximately 1.5Mt in the December2011 quarter (6Mtpa)

Wodgina expansion commenced and initial payments of $23.1 million made to GlobalAdvanced Metals, as part Wodgina infrastructure access agreement announced in May2011

$18.7 million strategic investment in Brazilian iron ore explorer and developer, CentaurusMetals (ASX Code: CTM) completed

Horizon 1 Strategy feasibility studies (inclusive of rail analysis) is expected to completedby 31 March 2012

“This has been a massive period for Atlas. The team have delivered on production targets withincost guidance, announced our first profit, paid a maiden dividend, achieved the takeover ofFerrAus, completed 45,000 metres of drilling, advanced delivery of our growth projects andgrew DSO resources to over 1 billion tonnes,” commented Atlas Managing Director, DavidFlanagan. “Shareholders are getting the benefit of a terrific team of people who are all workingvery hard to build a Great Australian Company.”

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FIGURE1 - Atlas: Pilbara’s Emerging Powerhouse

INTRODUCTION

Atlas commenced exporting direct shipping grade iron ore from the Pilbara of Western Australiain December 2008. Following the commencement of mining at Wodgina in June 2010, Atlas hasnow ramped up iron ore exports from 1Mtpa to approximately 6Mtpa. As a consequence, theCompany is now generating significant cash flows with further growth to come from the NorthPilbara and South East Pilbara projects. The Company is targeting exports at a rate of 12Mtpaduring the 2013 financial year and 22Mtpa during the 2015 calendar year. With the completionof the acquisition of FerrAus Limited after the end of the September 2011 quarter, the Companyis active in the assessment of its South East Pilbara assets to further expand exports, targeting46Mtpa.

Atlas is working to become a globally significant supplier of steel making raw materials throughthe discovery and development of relatively low capital cost iron ore projects. With theseincremental steps the Company will then develop larger scale, low cost, long life operations.This should deliver significant important strategic options for the Company, further value forshareholders and great outcomes for the communities in which we operate.

The people who work in our business continue to deliver outstanding results and their efforts aregreatly appreciated. With our people, iron ore deposits, infrastructure assets and growth model,Atlas is well positioned to continue its rapid expansion.

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OPERATIONS

MINE PRODUCTION AND SHIPPING

Table 1: Production

September June VarianceQuarter

Variance

Quarter ‘11 (t) Quarter ‘11 (t) (t) Quarter(%)

Ore Tonnes Mined 1,462,187 1,464,502 (2,315) 0%

Ore Tonnes Processed 1,416,909 1,467,056 (50,147) -3%

Haulage to Port 1,407,784 1,514,822 (107,038) -7%

Note 1: See Appendix 1 for detail of mine production at Pardoo and Wodgina

Table 2: Inventory

September June VarianceQuarter

VarianceQuarter

Quarter ‘11 (t) Quarter ‘11 (t) (t) (%)

Run of Mine Ore Stocks 339,385 331,948 7,437 +2%

Final Product Stocks - Site 100,258 82,654 17,604 +21%

Final Product Stocks - Port 33,653 85,029 (51,376) -60%

Table 3: Shipping

SeptemberQuarter ‘11 (t)

JuneQuarter ‘11 (t)

VarianceQuarter

(t)

VarianceQuarter

(%)

Ore Tonnes Shipped (Wet) 1,464,653 1,464,823 (170) 0%

Ore Tonnes Shipped (Dry) 1,368,619 1,364,771 +3,848 +0.2%

Production for the September 2011 quarter has achieved Ore Tonnes Shipped consistent withthe June 2011 quarter, and with the positive effect of the now fully commissioned HPGR crusher(rolls secondary crusher) at the Wodgina plant, processed tonnes and hauled tonnes areanticipated to uplift in future quarters. Cash operating costs of production remain stable monthon month, and are consistent with guidance of $42-45/t for the 2012 financial year.

Atlas remains on target to continue to ship approximately 1.5Mt (wet) of DSO in the December2011 quarter (consistent with annualised exports of 6Mt).

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MARKETING

Iron ore sales for the September 2011 quarter were 1.465 Mt WMT (1.368Mt DMT), unchangedfrom the June 2011 quarter (1.465 Mt WMT (1.364Mt DMT)).

Due to a number of shipments late in September 2011, there was 308,000 tonnes for whichcash proceeds were not received at month end, compared to 110,000 tonnes which carried overfrom the June 2011 quarter. This impacts on net cash generated for the September 2011quarter, with all funds received post quarter end.

Achieved pricing outcomes in the September 2011 quarter were strong and were comparablewith the June 2011 quarter. The Australian dollar weakened slightly but continues to impact onnet AUD sale proceeds. The Company has two forward exchange contracts outstanding at thedate of this report. Each is for USD 14 million and they are due for settlement in November 2011and December 2011 respectively at rates less than parity.

As noted by other iron ore producers and in media coverage, the iron ore market has softenedduring October 2011 due to reduced Chinese steel demand and uncertainty on Europe’sfinancial position. This will likely result in lower realised prices in the December 2011 quarter.However, it is expected the iron ore price will stabilise shortly as sale prices near the levels ofmarginal cost of Chinese iron ore production.

PROJECTSSince embarking on its Pilbara Iron Ore development strategy in 2006, Atlas has focussed onbuilding a strong mine project and infrastructure pipeline that provides various developmentoptions for the Company. In so doing, Atlas now has many and varied development options infront of it, with the cash flow from existing and future mines to assist in underwriting itsdevelopment objectives. Furthermore, with many feasibility studies and two mine developmentsbehind it, Atlas now has the track record, skills and experience to optimise these options andcontinue to deliver on its development strategy. During the September 2011 quarter Atlas spent$18.6 million dollars on project development (excluding the initial payments of $23.1 millionmade to Global Advanced Metals as part Wodgina infrastructure access agreement announcedin May 2011).

INTRODUCING ATLAS IRON’S ‘HORIZONS’ GROWTH PROGAM

Horizon 1

The ‘Horizon 1’ Growth Program defines Atlas’ near term focus, extending its North Pilbaradevelopment model to produce at a rate of 12Mtpa during the course of the 2013 financial year,and then filling Atlas’ 15Mtpa Utah Point allocation (contractually available from September2015).

The ‘Horizon 1’ growth program incorporates and envisages changes to the previous TurnerRiver Hub (TRH) development strategy. Changes in the scope of the original TRH project havearisen as a result of the recent acquisition of Giralia Resources NL, the extension of theWodgina Mine infrastructure agreements and now the acquisition of FerrAus Limited, each ofwhich provide further opportunity to either rationalise infrastructure or enhance the developmentof the North Pilbara logistics chain, including consideration for a North Pilbara rail case.

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The ‘Horizon 1’ Growth Program now encompasses several mine and infrastructuredevelopments, including;

Expansion of the existing Wodgina DSO Mine, inclusive of a crushing hub for both theWodgina and soon to be developed Abydos mine,

Development of the Mt Dove mine as a standalone DSO project, Development of the Mt Webber mine, inclusive of a crushing hub for both the Mt Webber

and potential future McPhee Creek operations early start-up, Development of an off-highway private haul road network to support North Pilbara

production, and Further development of Utah Point port facilities to realise Atlas’ ultimate 15Mtpa port

allocation.

Horizon 1 projects remain Atlas’ highest priority and attract the most management resources toensure targets are met.

Horizon 2

Atlas’ ‘Horizon 2’ Growth Program targets the expansion of the Company’s production basefrom 15Mtpa targeting up to 46Mtpa, through expansion of its North Pilbara production,development of its South East Pilbara Resources and further expansion of the Company’slogistics chain including port and rail developments. Atlas’ acquisition of FerrAus Limited isconsistent with the Company’s efforts to deliver on its ‘Horizon 2’ Growth Program. Furthermore,progress is being made on both port and rail solutions through the Company’s participation inNorth West Infrastructure and parallel negotiations around the various options for rail solutions.

These are ambitious and achievable targets that build directly on the Company’s skill set,infrastructure rights and expanding resource assets. This represents a clear and logical meansto deliver exceptional value to shareholders.

Horizon 3

Atlas’ ‘Horizon 3’ Growth Program targets expansion of the Company’s activities to become a‘Great Australian Company’, moving into alternate jurisdictions in both Australia and overseas,beyond Direct Shipping Iron Ore and into further Carbon Steel commodities. Whilst not Atlas’main focus, further options are being assessed and developed to progress growth in theCompany’s project pipeline to reflect this strategy.

Horizon 3 is essentially keeping an eye out for low risk opportunities for generating potentiallyworld class resource projects. Existing examples include Atlas’ investments in Shaw RiverManganese (SRR) and Centaurus Metals (CTM). Please refer to the Corporate section withinthis report for further details.

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THE ‘HORIZON 1’ GROWTH PROGRAM IN FURTHER DETAIL

During the year, the Company has been conducting engineering studies to further detail itsplans to expand its Northern Pilbara Projects’ production to 12Mtpa during the course of the2013 financial year. With the acquisition of Giralia Resources NL and the finalisation of the newWodgina infrastructure agreement, and now with the acquisition of FerrAus, Atlas is continuingto review the evolution of its North Pilbara business to take advantage of the Company’s criticalmass developing both in the North and South East Pilbara, as well as the support this providesfor strategies to deliver rail transport of iron ore.

Atlas has previously advised that the results of its engineering studies would be available inSeptember 2011. However, ongoing work is demonstrating the merits in further exploring thedevelopment of a North Pilbara rail network to enhance the Horizon 1 production and costobjectives, and as such Atlas is continuing to further define rail solutions (without compromisingthe Company’s interim production targets and in particular, the 12Mtpa production rate duringthe 2013 financial year).

Atlas is well advanced on the environmental approvals process supporting its ‘Horizon 1’Growth program, including extensive North Pilbara flora / fauna field study work and desktopanalysis. Where required to maintain the relevant projects critical path, environmentalsubmissions to government are either complete, in progress or soon to be submitted togovernment.

In addition, pegging of the required mining, haulage and processing tenure applications is inprogress. That said, securing the required tenure for the development of the proposed off-highway haul road network has taken longer than planned (particularly the required bridgetenure), which is reflected in the delivery of the 12Mtpa North Pilbara production case in the

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latter half of 2013 financial year. As of the date of this report, the last of the bridge tenurerequired to complete the network is expected to be completed shortly.

Atlas expects to provide the results of the Horizon 1 Detailed Engineering Study (DES),inclusive of analysis of the various rail options on or before 31 March 2012. In the interim, Atlaswill continue development of those project streams on the critical path to producing 12Mtpaproduction rate during the 2013 financial year, including but not limited to;

Wodgina Mine expansion; Development of the new Abydos mine; Development of the new Mt Dove mine; and Further development of the Utah Point port including facilities construction within Yard 2.

Ore from Atlas’ Pardoo mine will continue to account for between 1Mtpa and 2Mtpa on anongoing basis.

Wodgina Mine Expansion and the new Abydos Mine

Atlas was pleased to announce in May 2011 that it had struck a pivotal agreement to expandcapacity at its Wodgina Iron Ore mine by 75 per cent, to approximately 7Mtpa. Atlas enteredinto a long term infrastructure agreement with GAM, the owners of the infrastructure at theWodgina Tantalum mine site, for the long-term sharing of the associated infrastructure. The newagreement is for a period of six years with three, two year options at Atlas’ election toencompass a total of up to 12 years. Under the new agreement, Atlas will have access to arange of infrastructure including 100% of the existing crushing and screening plant. Atlas willalso have the ability to expand site infrastructure to suit its production targets, includingexpanding camp accommodation and the capacity of the current utilities.

Under the new agreement announced in May 2011, Atlas will assist in funding, for GAM’sexclusive use, alternate Tantalum crushing and screening capacity on the site by the end of thefirst quarter calendar 2012, at a cost to Atlas of approximately $40.9 million, leaving both partiesfree to optimise their operations to meet varying market conditions. The Wodgina mineexpansion project is now well underway, with engineering and site works in progress to facilitateto the various infrastructure upgrades. The $40.9 million development cost to establish alternatecrushing facilities at Wodgina is additional scope to that contemplated within the original TRHfeasibility work, in which case the crushing facilities were envisaged to be established by thecontractor on a buy-own-operate basis.

The Wodgina mine expansion capital costs are estimated to be $80 million inclusive ofcontingency, prior to the development of the northern road link to port for which further feasibilitystudy outcomes will be presented in March 2012.

As a result of the revisions to the Wodgina Infrastructure Agreement, run of mine productionfrom Atlas’ proposed Abydos DSO mine will now be able to be processed at Wodgina. Abydosis now the Company’s next mine development (subject to final Atlas Board approval), withconstruction set to commence by March 2012 and mine production commencing in the 2013financial year. Mine production is anticipated to be in the range of 2-3 Mtpa over the life of themine, subject to blending and or varied production requirements across the Atlas mine portfolio.

Development of the Abydos mine includes establishing the east-west road link between theAbydos and Wodgina mines, inclusive of three rail bridge structures and two river crossingsacross the East and West Turner Rivers. As a result of this significant scope of work and thegeneral escalation in capital costs, the Abydos mine development is expected to be

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approximately $150 million inclusive of contingency, prior to the development of the NorthernRoad link to port for which further feasibility outcomes will be presented in March 2012.

Haulage of final product to port from both the Wodgina expansion and Abydos project will be viathe existing on-highway haulage model, with the fleet to move off-highway following theproposed commissioning of the private haul road network during the course of the 2013financial year.

Mt Dove DSO Project

Atlas’ Mt Dove DSO Project is a stand-alone development 72 kilometres due south of PortHedland that would transport product via the Great Northern Highway to the new Utah PointPort Facility.

A Feasibility Study to move the Mt Dove DSO Project to execution by June 2012 (subject toAtlas Board approval) is underway and to date concludes that the Mt Dove DSO Projectrepresents an ideal opportunity for Atlas to deliver a high quality blending product. With a lowstripping ratio, near 100% mineral extraction anticipated and a low CAPEX start-up, the Projectis also set to deliver a favourable economic outcome for Atlas.

At a feasibility level of assessment, the project fundamentals for the project resulted in thefollowing:

Capital estimate to establish the access, infrastructure and pit development ofapproximately $22 million;

With relatively low cash operating costs circa $50/tonne expected over the life-of-mine,the Project is expected to generate significant operating cash flows;

Initial Reserve Estimate of 1.766Mt at 58%Fe; Resources of 2.8Mt at 58.1%Fe; Complete mineral extraction within a 12 month period; and Continued processing of stockpiled ROM stocks to enable blending flexibility with

Wodgina, Pardoo and Abydos production, to meet quality and quantity targets.

Mt Webber

Mt Webber will become a further North Pilbara processing hub for the Company, initiallysupporting just the Mt Webber mine. However, Atlas is also continuing to investigate early startup options for its McPhee Creek resources, with the potential of initial McPhee Creek run-of-mine tonnes being crushed at Mt Webber and contributing to overall blended production throughthe off-highway private haul road solution and/or future rail solutions.

Whilst still subject to further engineering studies, the Company envisages crushing capacity inthe range of 4-7Mtpa pending the inclusion of ore from an early start-up at the McPhee CreekDSO project.

Further feasibility outcomes will be presented in March 2012.

Utah Point PortThe new multi-user port at Utah Port in Port Hedland is integral to Atlas’ ‘Horizon 1’ growthprogram, with Atlas holding a right to up to 15Mtpa of port capacity at the port.

To realise this port capacity Atlas will further develop the Utah Point landside facilities (over andabove that already established at ‘Yard 1’) by setting up additional stacking and reclaiminginfrastructure in ‘Yard 2’ at Utah Point. Furthermore, the new Yard 2 infrastructure will ultimately

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be linked to Atlas’ proposed off-highway private haul road network (and potentially at a futuredate to rail infrastructure) to seamlessly interconnect the entire logistics chain to the port.

Atlas’ Yard 2 facilities will be developed in stages, coincident with Atlas’ rights to port capacityfrom March 2012, with facilities modelled on Yard 1 infrastructure initially, supplemented bymore sophisticated stacking and reclaiming infrastructure following the delivery and installationof these long-lead time facilities.

Atlas is progressing its planning and engineering works for the development of its landallocation within the Utah ‘Yard 2’ stockpile area. Environmental approvals for the Yard 2facilities have been confirmed during the quarter, facilitating the commencement of constructionas required by the Company.

The staged development of Utah will be the subject of further feasibility outcomes forpresentation in March 2012.

THE ‘HORIZON 2’ GROWTH PROGRAM IN FUTHER DETAIL

McPhee Creek Mining and Infrastructure Studies

Post completion of the Giralia Resources NL acquisition earlier in 2011, Atlas has continued toprogress studies considering the development options for the McPhee Creek Project.

High level outcomes from these mine and infrastructure studies are expected to support thedevelopment of a North Pilbara rail network incorporating the McPhee Creek, Mt Webber,Abydos and Wodgina mines.

The McPhee Creek mine development studies (at a Scoping level of assessment) recommend a10Mtpa ‘all fines’ mining operation. Notional mine production is being blended through the pitinventory planning available within the other North Pilbara mines.

A short list of infrastructure options is being analysed within the McPhee Creek Infrastructurestudy including rail, on-highway and off-highway road haulage and further combinations thereof.In considering the other projects available within Atlas’ development portfolio, the Infrastructurestudy concludes that the 10Mtpa McPhee Creek mine should form part of a North Pilbara railnetwork that ties-in the McPhee, Mt Webber, Abydos and Wodgina mines.

Atlas’ McPhee Creek Infrastructure Study financial model was based on a stand-alone raildevelopment hauling up to approximately 22Mtpa, pending production throughout the life-of-mine across Atlas’ North Pilbara projects. Whilst this model demonstrated a compellingdevelopment case, there are obvious further synergies in working with 3rd parties to realisefurther capital and operating cost reductions through better economies of scale.

Whilst a North Pilbara rail network provides a platform for Atlas to continue to grow withinHorizon 2, there are further implications for the development and expansion of projects withinAtlas’ Horizon 1 projects. As a result the Company has decided to further analyse the NorthPilbara rail solution and defer publishing further Horizon 1 feasibility outcomes until the parallelrail studies are complete (as above).F

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South East Pilbara Projects (ex FerrAus)

With completion of the FerrAus Limited transaction during the September 2011 quarter theexisting studies underway (the Davidson Creek and Robertson Range Detailed EngineeringStudies) are now being wrapped up such that the applicable data can be drawn into Atlas’Horizon 2 growth program.

In further consideration of the North Pilbara rail network, there are now obvious synergies withAtlas’ South East Pilbara project portfolio given the lesser incremental rail required from theSouth East Pilbara to connect to a potential North Pilbara rail network.

North West Infrastructure

Atlas Iron is a founding member of North West Iron Ore Alliance (now trading as North WestInfrastructure - NWI), a group of independent iron ore companies progressing projects in thePilbara of Western Australia. NWI is advancing the development of its South West Creek portand stock handling facility, with economic studies nearing completion.

With FerrAus Limited becoming a wholly owned subsidiary of Atlas, the Company will continueto push forward the NWI South West Creek port development opportunity, given therequirement of Atlas to expand its port footprint over time, consistent with its future developmenttargets.

As part of Atlas current Horizon 1 and 2 feasibility works Atlas and NWI are actively consideringthe consolidation of respective stockyard facilities in the Boodarie area, to compliment therespective Utah expansion and South West Creek port development.

Horizon 1 and 2 Rail Options

Atlas is investigating a number of rail options for its Horizon 1 and 2 strategies including owneroperator models and third party rail access through commercial agreement with either anexisting / proposed iron ore producer’s rail infrastructure or a third party rail infrastructureservice provider. Atlas expects to provide further disclosure following the results of its railstudies by 31 March 2012.

EXPLORATION AND RESOURCE DEVELOPMENTDuring the September 2011 quarter the Company drilled 594 RC holes and 21 diamond holesfor a total of 45,677 metres across its Pilbara projects. These included exploration drilling atWestern Creek, McPhee Creek and Hickman, and resource development drilling at Abydos andMt Webber. This does not include work completed by FerrAus Limited on its DSO projects.

During the September 2011 quarter Atlas completed $19 million of expenditure on explorationand evaluation studies, resource development and camp establishment.

Moving into the October quarter and the 2012 drilling season, Atlas intends to build momentumat McPhee Creek as additional drill rigs are mobilised to site in the coming months. Withevaluation programs nearing completion at the Abydos and Mt Webber projects, McPhee Creekwill remain the primary focus of exploration and evaluation activity in the year ahead.

In the Southeast Pilbara, Atlas will use the Robertson Range camp and facilities as a base tocommence exploration on the Jigalong project, where the Company intends to test MarraMamba DSO targets beneath alluvial cover. Atlas will continue to progress exploration, andwhere required, further develop the DSO Resources acquired through the acquisition of FerrAusLimited.

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DSO Resources

Subsequent to the end of the September 2011 quarter, the Company has updated its resourceestimates for the McCamey’s North, Robertson Range and Mirrin Mirrin projects. The resultantincrease in contained mineral resources brings Atlas’ combined DSO Resource total to 1,035Mtat 56.3% Fe. An updated Resource summary table is included in Appendix 2.

CORPORATEOff-Market Takeover for FerrAus Ltd (FRS)

On 5 October 2011, Atlas successfully closed its off-market takeover offer for all the shares inFerrAus Limited (“FerrAus”). Atlas has announced it is proceeding to compulsory acquisition ofthe outstanding FerrAus shares.

The finalisation of the takeover crystalises the obligation to pay stamp duty on the underlyingland rich assets of FerrAus. This stamp duty charge and the takeover advisory fees of bothcompanies are likely to be expensed and total approximately $20 million.

Strategic investment in Centaurus Metals

During the September 2011 Atlas completed its acquisition of a strategic interest in CentaurusMetals Limited (ASX code: CTM) (“Centaurus”), an emerging Brazilian iron ore explorer anddeveloper. Under the terms of a strategic alliance with Centaurus, Atlas acquired a 19.85%equity stake in Centaurus for $18.7 million. Subsequent to the end of the September 2011quarter Centaurus announced a resource upgrade (see Centaurus’ website:www.centaurus.com.au for further details).

Magnetite Projects

Commercial negotiations have continued during the September 2011 quarter with potentialinvestors or partners in the Ridley, Balla Balla and Yerecoin projects.

Non-binding proposals for several of the assets remain on foot and the Company is working toconvert these into binding arrangements as soon as possible.

BHPBIO

Consistent with previous disclosure, Atlas is continuing discussions with BHPB Iron Ore oncommercial matters of mutual interest.

Shaw River Manganese Limited

As Shaw River’s major shareholder, Atlas is continuing to support Shaw River’s initiatives tobuild a significant manganese exploration and development portfolio. Work is continuing onShaw River’s ‘Otjo’ Manganese project in Namibia with Shaw River expecting to be inproduction by mid-2012 (see Shaw River’s website: www.shawriver.com.au for further details).F

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CORPORATE PROFILE

DirectorsDavid Flanagan, Managing DirectorDavid Hannon, Non-Executive ChairmanDave Smith, Non-Executive DirectorTai Sook Yee, Non-Executive Director

Company SecretaryTony Walsh

Executive ManagementKen Brinsden, Chief DevelopmentOfficerMark Hancock, Chief Commercial OfficerJeremy Sinclair, Chief Operating Officer

Registered Office and Head OfficeLevel 9, Alluvion, 58 Mounts Bay Road, Perth, WA 6000Tel:+61 8 9476 7900Fax:+61 8 9476 7988Website:atlasiron.com.au

Share Details as at 30 September 2011889,036,055 ordinary shares

Unlisted Options as at 30September 201121,600,000 Unlisted Options

Substantial Shareholders as at 30 September2011IMC Group: 66.75 mil sharesSchroder Investment Management Australia: 50.33 mil sharesBlackrock Investment Management: 48.98 mil shares

Reporting Calendar

Atlas Annual General Meeting: 8 November 2011December 2011 Quarterly Report: 25 January 2012Horizon 1 Definitive Feasibility Study results: By 31 March 2012

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Appendix 1 – Mine Production at Pardoo and Wodgina

Table A: Mine Production – Pardoo

SeptemberQuarter ‘11

(t)

JuneQuarter ‘11

(t)

VarianceQuarter

(t)

VarianceQuarter

(%)

Ore Tonnes Mined 515,729 426,587 89,142 +21%

Ore Tonnes Processed 491,710 483,524 8,186 +2%

Haulage to Port 458,372 502,169 (43,797) -9%

Table B: Mine Production – Wodgina

SeptemberQuarter ‘11

(t)

JuneQuarter ‘11

(t)

VarianceQuarter

(t)

VarianceQuarter

(%)

Ore Tonnes Mined 946,458 1,037,915 (91,457) -9%

Ore Tonnes Processed 925,199 983,532 (58,333) -6%

Ore Tonnes Hauled 949,412 1,012,653 (63,241) -6%

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Appendix 2: DSO Resource Summary

Atlas Iron Limited - Resource Inventory October 2011

Region ResourceClassification Kt

Fe SiO2 Al2O3 P S LOI CaFe(%) (%) (%) (%) (%) (%) (%)

North Pilbara*Measured 15,330 57.5 6.0 1.6 0.07 0.07 8.7 63.0Indicated 149,000 56.8 6.5 2.2 0.10 0.01 9.1 62.5Inferred 272,000 56.0 7.1 2.4 0.11 0.01 9.4 61.9

Southeast PilbaraMeasured 37,400 58.4 4.8 2.8 0.10 8.1 63.6Indicated 341,800 56.6 6.3 3.6 0.10 8.3 61.7Inferred 169,000 55.7 7.1 3.9 0.07 8.7 60.9

West Pilbara Inferred 38,000 53.6 7.5 4.8 0.04 0.00 9.3 59.1Midwest Inferred 12,000 60.0 6.3 2.9 0.06 0.00 3.7 62.3

TotalMeasured 52,730 58.2 5.2 2.4 0.09 0.02 8.3 63.4Indicated 490,800 56.7 6.3 3.2 0.10 0.01 8.5 61.9Inferred 491,000 55.8 7.1 3.1 0.09 0.01 9.0 61.3

Grand Total 1,034,530 56.3 6.6 3.1 0.10 0.01 8.7 61.7CaFe% is calcined Fe calculated by Atlas using the formula (Fe%/(100-LOI%))*100.

* Mt Webber Resources in the North Pilbara are subject to Joint Venture interests in the ratio AGO 70%: AJM 30% for the MtWebber Joint Venture with Altura Mining and in the ratio AGO 75%: HAO 25% for the Daltons Joint Venture with Haoma Mining (seeAtlas’ DSO Reserves and Resource upgrade announcement released on 19 August 2011 for further details on the Mt Webber andDaltons Reserves and Resources).

COMPETENT PERSONS AND JORC COMPLIANCE STATEMENTExploration Results

The information in this report that relates to exploration results is based on information compiled by Mr AndrewPaterson who is a member of the Australian Institute of Mining and Metallurgy and an employee of Atlas Iron Limited.Andrew Paterson has sufficient experience which is relevant to the style of mineralisation and type of deposit underconsideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004Edition of the ‘Australasian Code for Reporting of Exploration Results’. Andrew Paterson consents to the inclusion inthe report of the matters based on his information in the form and context in which it appears.

Geological Data, Interpretation and Resource Estimation – DSO Mineral Resources

The information in this report that relates to mineral resource results is based on information compiled by Mr SteveWarner who is a member of the Australasian Institute of Mining and Metallurgy and a full time employee of Atlas IronLimited. Steve Warner has sufficient experience which is relevant to the style of mineralisation and type of depositunder consideration and to the activity which he has undertaken to qualify as a Competent Person as defined in the2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.Steve Warner consents to the inclusion in the report of the matters based on his information in the form and contextin which it appears.

Reserve Estimation

The information in this report that relates to Reserve estimations is based on information compiled by Mr KenBrinsden, who is a member of the Australasian Institute of Mining and Metallurgy. Ken Brinsden is a full timeemployee of Atlas Iron Limited. Ken Brinsden has sufficient experience which is relevant to the style of mineralisationand type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Personas defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources andOre Reserves’. Ken Brinsden consents to the inclusion in the report of the matters based on his information in theform and context in which it appears.

Dollars

Means Australian dollars.

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