At­las irons out debt

The Australian Mining Review - - NEWS - CAMERON DRUM­MOND WA

ONCE-BELEAGURED iron ore ju­nior At­las Iron will pay back a fur­ther $20 mil­lion of debt on the back of surg­ing iron ore prices.

At­las’ lenders have also agreed to ease loan covenants, in­clud­ing re­duc­ing the min­i­mum cash bal­ance re­quire­ment at the end of each month from $35m to $15m.

At­las manag­ing di­rec­tor Cliff Lawren­son said the de­ci­sion to re­duce debt was in line with the com­pany’s strat­egy to re-po­si­tion the busi­ness, and the strong Aus­tralian dol­lar made the timing op­por­tune.

“A stronger bal­ance sheet will al­low us to face volatil­ity in the iron ore mar­ket with in­creased con­fi­dence.”

“Fol­low­ing this $20m, we will have re­duced our debt from more than $180m in June 2016 to less than $85 mil­lion – cut­ting our in­ter­est cost by about $8m a year,” he said.

“Af­ter eval­u­at­ing other fi­nanc­ing al­ter­na­tives, we con­cluded that a staged re­pay­ment of the term loan is the best op­tion for the com­pany to pre­serve liq­uid­ity while strength­en­ing our bal­ance sheet.

“A stronger bal­ance sheet will al­low us to face volatil­ity in the iron ore mar­ket with in­creased con­fi­dence.

“The de­ci­sion re­flects our com­mit­ment to re-po­si­tion the busi­ness by re­duc­ing debt, grow­ing our ex­ist­ing iron ore busi­ness through Utah Point and di­ver­si­fi­ca­tion be­yond iron ore.”

At­las re­cently re­turned en­cour­ag­ing re­sults from first pass field re­con­nais­sance at its Pan­cho lithium project.

“An­a­lyt­i­cal re­sults from sur­face rock chip sam­pling show sev­eral of the tar­gets have geo­chem­istry that con­firms they are lithi­um­cae­sium-tan­ta­lum style peg­matites that have the po­ten­tial to host lithium en­rich­ment,” the com­pany stated.

“Com­pi­la­tion of these re­sults along with other in­for­ma­tion gath­ered in the field has en­abled At­las to de­fine a spe­cific zone of fo­cus for the next stage of ex­plo­ration work.”

RC drilling at the com­pany’s Cop­per Range project also pro­vided pos­i­tive re­sults.

At­las Iron’s fu­ture is look­ing brighter, hav­ing ac­cel­er­ated its debt re­pay­ments and ex­plo­ration pro­grams.

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