Atlas Iron Ltd: (ASX: AGO)

RIDLEY MAGNETITE RESOURCE UPGRADE

Atlas Iron Limited [ASX Code: AGO] is pleased to report on a significant resource upgrade for its 100% owned Ridley Magnetite Project, located at the Company?s Pardoo Project just 75 kilometres east of Port Hedland, in the Pilbara of Western Australia.

Details of the updated resource estimate can be found in the following tables.

?CSA Global and the Atlas team have completed a major drilling program, defined a very large resource and added significant value for shareholders?, commented David Flanagan, Atlas Managing Director. ?We now look forward to reporting the balance of the metallurgical test work and engineering that will demonstrate the significant advantages of the Ridley Magnetite Resource?, he added.

With up to 6 rigs operating on two shifts for 6 months, the company has now drill tested the deposit to 350 metres depth over a strike length of some 2,500 metres. 756 million tonnes have been upgraded to the Indicated Resource category.  The increased Indicated Resources can facilitate outstanding mining studies for the reporting of initial reserves later this year as part of the PFS project delivery.

The company continues to receive strong interest from potential development partners and expects to have completed negotiations for the sale of a majority interest in the project by mid 2009.

This increase and upgrade of the resource estimate is an interim result, as drill program assays are still pending due to ongoing laboratory delays. Outstanding assays include those from a 900 metre deep Diamond drill hole testing the magnetite targets continuity at depth. Pending progress of the remaining samples through the lab a revised resource estimate, inclusive of the remaining PFS and extension drill data is expected coincident with the completion of the PFS in December.

The Company maintains its exploration target for the Ridley Magnetite mineralisation of a range of 1.8 ? 2.2 billion tonnes and grade in the range of 36%-37%Fe arising out of increased potential along strike and at depth, along with excellent mineralisation continuity within each stratigraphic unit.

Background

The Prefeasibility study for the Ridley Magnetite Deposit is due for completion in early December 2008.

The company is currently awaiting final ministerial consent with respect to its DSO operations at Pardoo where it is targeting export of at an initial rate of 1 million tonnes per annum during its first 12 months of operations.  Together with additional export tonnages from Abydos the company is ultimately targeting export of 6 million tonnes by 2010 and 12 million tonnes per annum by 2012.

For further information please contact

David Flanagan, Managing Director                           Ken Brinsden, Operations Manager

Tel: (08) 9476 7900                                                     Tel: (08) 9476 7900

Ridley Magnetite ? Statement on Exploration Target and Reserves

Atlas has reported a magnetite resource of 1.45 billion tonnes at 36.5% Fe at its 100% owned Pardoo Project. While the company progresses the pre feasibility study assessing the projects economics, and remains optimistic it will report additional resources in the future, any discussion in relation to targets, resources, reserves or ?ore? over and above the resource of 1.45 billion tonnes at 36.5% Fe is only conceptual in nature. There has been insufficient exploration to define a Mineral Resource over and above the resource of 1.45 billion tonnes at 36.5% Fe, and it is uncertain if further exploration will result in the determination of a Mineral Resource over and above the resource of 1.45 billion tonnes at 36.5% Fe, nor the development of a reserve.

COMPETENT PERSONS STATEMENTS

Resource Estimation Ridley Deposit

The information in this report that relates to mineral resource results is based on information compiled by Mr Malcolm Titley who is a member of the Australasian Institute of Mining and Metallurgy. Malcolm Titley is a full time employee of CSA Global Pty Ltd. Malcolm Titley has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they have undertaken to qualify as a Competent Person as defined in the 2004 Edition of the ?Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves?. Malcolm Titley consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.

Figure 1: ? Ridley Magnetite Resource Location Plan

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