At­las blow boosts bid

The West Australian - - WEST BUSINESS - Stu­art McKin­non

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.

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