Annual Report 2016

Management continues to apply its cost-reduction skills to every aspect of the business while

looking for opportunities to add value to our existing iron ore

products.

Record Production

Ramped-up production to 14-15Mtpa Doubled production at Mt Webber from 3 to 6Mtpa

Now shipping a higher-value Atlas Lump product from both Abydos and Mt Webber

Chairman's Report 2

Managing Director's Report 4

FY2016 Snapshot 6

FY2017 Guidance 7

About Atlas 9

Our People and Culture 11

Health And Safety 12

Report On Operations 14

Land Access, Heritage And Environment 19

Exploration And Resource Development 20

Community 22

Mineral Resources and Ore Reserves 23

Financial Report 25

ASX Additional Information 96

Corporate Information 101

Atlas Iron Limited 1

CHAIRMAN'S REPORT

Dear Shareholders

As you know I joined Atlas following the debt restructure and have been Chairman of the Board at Atlas Iron since June and already I have been made aware of the opportunities and the challenges in the iron ore industry.

Some of the opportunities stem from the difficulties Atlas encountered as a direct result of the sharp fall in the iron ore crash in 2015. The extensive cost cuts which have flowed from the innovative contractor-collaboration agreements, under which some of our key contractors have reduced their rates and pegged their returns to the iron ore price and Atlas' cashflow, have opened the door

to an immense opportunity for Atlas shareholders.

Our lower cost base in FY2016 ensured Atlas generated positive cashflows for our shareholders, as highlighted by the stronger financial performance of Atlas in FY2016. Our financial position has also been strengthened by the recently completed debt restructure.

Again, this was undertaken as part of our strategic response to the iron ore price fall in 2015, and will help Atlas to capitalise on its opportunities whilst providing some protection to future price volatility.

At the end of a very challenging 24 months Atlas is now stronger and leaner, poised to reap the benefits that can stem from a much lower cost base, a more robust balance sheet, incredible support from our lenders and shareholders, a collaborative relationship with our key contractors and an experienced team with a strong track record of project development, cost reduction and production growth.

2 Annual Report 2016