Atlas Iron has announced its plans to develop the Corunna Downs Iron Ore Project in the Pilbara region of Western Australia.
The cost of this development will be approximately A$47m-$53m ($36m-$41m), which the company intends to fund from the operating cashflow after the expected amendments to the Term Loan B facility.
Atlas Iron managing director Cliff Lawrenson said: “This is a strong vote of confidence in Atlas by our lenders, several of whom are significant Atlas shareholders.
“Corunna Downs, together with Mt Webber, will rebuild our production rate to approximately 12Mtpa after Wodgina and Abydos cease production in the first and second half of 2017 respectively.
“The amendments to the facility will enable Atlas to capitalise on current and future opportunities provided by the stronger iron ore price.”
Atlas is currently evaluating different opportunities to decrease the C1 cash cost to the lower end of this range.
Corunna Downs is expected to start iron ore shipments from March 2018, with an initial production rate of 4Mtpa over the five to six year mine-life.
Atlas plans to combine the production of Mt Webber with Corunna Downs to export 12Mtpa by the June 2018 quarter.