Atlas blow boosts bid
Atlas Iron shareholders indignant with a $300 million all-scrip bid for their shares from Mineral Resources are under increasing pressure to accept the offer after more bad news from the miner yesterday.
The Cliff Lawrenson-led Atlas warned of a $75 million to $100 million impairment in its fullyear accounts as it continues to battle steep discounts for its lowgrade iron ore combined with higher operating costs.
Atlas said the discounts coupled with high sea freight and fuel prices had increased the likelihood of an impairment charge against the value of its producing assets, but that it would not affect cashflow or compliance with its debt obligations. While full-year production guidance was unchanged between nine million and 10 million tonnes, annual cost guidance would rise from $54-$58/wmt, including freight costs, to $58wmt-$59/wmt.
The news makes it more difficult for shareholders to argue for a sweetener from MinRes to its one-for-571 share offer. Some shareholders have vowed to vote against the scheme, arguing it undervalues the company. A vote is scheduled for July.
Last month, the company revealed an operating loss for the March quarter.
Atlas Iron's stockpile at Port Hedland Port Authority's Utah Point.