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| Aurox, Atlas To Cooperate At Port Hedland, Western Australia |
| = Utah Point Port Cooperation Agreement signed February 22 = |
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Australian iron ore developer Aurox Resources Limited and iron ore producer Atlas Iron Limited announced February 22 that they have entered into the Utah Point Cooperation Agreement in relation to cooperation at the Port Hedland multi-user berth Utah Point, which is currently being constructed by the Port Hedland Port Authority (PHPA). <Scope of Cooperation at Utah Point> The Agreement provides, subject to the approval of the PHPA, for Aurox and Atlas to work together to facilitate the efficient and cost effective operation of the Utah Point facility, for the mutual benefit of both companies. The cooperation includes such things as: stockyard configuration, joint planning and scheduling, and joint negotiations with the PHPA to optimize the Utah Point facility. <Capacity Allocations> Aurox has, subject to the approval of the PHPA, granted Atlas a first right to use any of Aurox's excess or unused capacity at Utah Point. In addition, Aurox and Atlas have agreed to share equally any capacity allocation to which Aurox becomes entitled in excess of its current allocation. Pursuant to Aurox's agreement with the PHPA, if the use of the Aurox reclaimer results in an increased throughput for the Utah Point berth by more than 2 Mtpa, Aurox's allocation will increase from 10 Mtpa to 12 Mtpa. According to Aurox, the Agreement will not negatively impact Aurox's capacity allocations or its ability to operate as planned at Utah Point. Aurox's capacity of 6 Mtpa from March 2012, rising to 10 Mtpa from 2015, remains Aurox's 100% owned entitlement for use by its Balla Balla project. <Service Provision> As part of Aurox's development of Balla Balla, Aurox will install at Utah Point certain wholly-owned materials handling equipment. This equipment will include a stacker and reclaimer with significant latent capacity due to the single-berth nature of Utah Point. As part of the Agreement, Aurox has agreed to offer reclaiming services, to the extent unused capacity permits and as may be desired by Atlas, for an agreed service lee. These services would generate additional income for Aurox should Atlas use the services and importantly should facilitate efficiency gains at Utah Point. <Atlas' funding for Aurox's Port Payment Obligations> Atlas has agreed to lend Aurox A$13.86 million for Aurox to make its March 31 2010 payment obligation to the PHPA. The loan is unsecured, interest free and repayable by no later than 12 months from the date of the Agreement and may be repaid earlier at Aurox's discretion. If the loan is not repaid within 12 months, then Atlas may elect to extend the time for repayment or (subject to the consent of the PHPA) require Aurox to assign to it any pre-paid Facility Charges (up to the outstanding balance on the loan) in settlement of the loan. Interest shall commence to accrue on the outstanding balance of the loan if Atlas elects to extend the term of the loan. <Atlas Iron> Atlas Iron is mining and exporting from its 100%-owned Pardoo Iron Ore project, located 75 kilometers road from Port Hedland in the Pilbara region of Western Australia. Atlas shipped over 1 Mt of Pardoo Direct Shipping Ore (DSO) in its first year of operation. Atlas is working to further expand its production following commissioning of the Utah Point port facility in the second half 2010. When combined with additional export tonnages from its Wodgina and Abydos DSO Projects, the Company is targeting exports at an annualized rate of 6 Mt by the end of 2010, growing to 12 Mt by 2012. |
| last modified : Wed 03 Mar, 2010 [10:06] |
