Atlas Iron Limited (ASX: AGO)

ABYDOS DRILLING CONTINUES TO IMPRESS

Atlas Iron Limited (ASX: AGO) is pleased to announce continuing exploration success from ongoing drilling at our 100% owned Abydos Project located 120 kilometres south of Port Hedland in the Pilbara of Western Australia. Drilling continues to return highly encouraging results and highlight further resource potential.

Since mid February 2008 Atlas has completed 93 RC holes for 4,984 metres and 4 diamond holes for 272 metres with a focus on infill and extension drilling at Mettams, Mullaloo and Trigg deposits on the Lalla Rookh Trend (Figure1).   To date assay results have been returned for 70 RC holes.

Significant open mineralisation has been returned from the western end of the Trigg deposit (i.e. initial resource estimate of 8.57 Million tonnes resource, ASX Oct 2007) with best results including:

Results from infill drilling at the Trigg resource continue to confirm its robustness and down dip potential. This bodes well for the resource estimation upgrade scheduled for mid year.  Best results returned from infill drilling at Trigg include:

    NB. * denotes intercept to end of hole

Significant near surface mineralisation was returned from step out RC holes at the western end of Mettams with better results including: 

Four diamond holes have been completed at Trigg for metallurgy, density determinations and quality control check work to enable a significant portion of the resource to be upgraded to indicated category in the next resource estimate upgrade due mid-year.   Geological logging and density determinations show the ore has excellent physical properties being predominantly competent, hard and dense indicating that metallurgical test work should return favourable lump/fine ratios. 

Atlas’s Managing Director David Flanagan stated that “These are very good results from what is becoming our lead DSO project area and we look forward to ramping up exploration, drilling a lot more holes and growing our resources during 2008.”

Background

The company is also working to complete environmental approvals and commence shipping of direct shipping grade (DSO) iron ore from its Pardoo Project by October 2008.  The company is targeting export of 1 million tonnes of DSO iron ore during the first 12 months of operations with production growing to 3 million tonnes per annum by 2010.  Together with the development of the Abydos project the company is targeting an ultimate production of 6mtpa of DSO before 2012.

On 17 October 2007, Atlas announced an initial JORC compliant inferred resource of 8.6 million tonnes at 57.5% Fe at its 100% owned Abydos Project located 100 kilometres south of Port Hedland in the Pilbara of Western Australia. On 17 December 2007, Atlas reported the completion of a Scoping Study on its Abydos Direct Shipping Iron Ore (DSO) Project. Subject to achieving environmental approvals, the Company plans to commence shipping iron ore from Abydos in the second half of calendar 2009. The company is targeting production at an initial rate of 3Mtpa. Atlas is progressing the Abydos DSO Project to the Pre Feasibility Study (PFS) phase, due for completion by July 2008.

Figure 1 Abydos Project Area

Atlas has reported an initial inferred resource of 8.6 million tonnes at 57.5% Fe at its 100% owned Abydos Project (see 17 October 2007 announcement).  While the company remains optimistic it will report additional resources in the future, any discussion in relation to targets, resources, reserves or ‘ore’ over and above the inferred resource of 8.6 million tonnes at 57.5% Fe is only conceptual in nature, there has been insufficient exploration to define a Mineral Resource over and above the inferred resource of 8.6 million tonnes at 57.5% Fe, and it is uncertain if further exploration will result in the determination of a Mineral Resource over and above the inferred resource of 8.6 million tonnes at 57.5% Fe.

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

  RC DRILL RESULTS – ABYDOS PROJECT    (ABRC144-173, 250-291)