The Wodgina direct shipping ore (DSO) project is located 100km south of Port Hedland in the Pilbara region of Western Australia. Wodgina is part of the Greater Abydos project and adjoins the great northern highway, the FMG railway line and BHPB railway line.
Atlas acquired Wodgina from Talison Minerals in February 2008 and commenced drilling in the following November. Atlas Iron announced the discovery of a new DSO in the first drill completed at Wodgina in December 2008. The company’s two exploration projects (Wodgina and Mt Webber) come under the greater Abydos project area. Wodgina is located 50km to the west of Abydos.
The company plans to sell iron ore from Wodgina to buyers in China, Japan, Taiwan and Thailand.
The project will incur around A$10m of capital expenditure as a start-up cost. Project life will be more than 15 years.
Feasibility Study
Atlas Iron announced the outcome of a feasibility study on the Wodgina DSO in July 2009. The feasibility study covered over nine months of initial exploration and resource development, reverse circulation drilling, diamond drilling and metallurgical test work, process development and mine planning controlled by Atlas Iron. The study indicates strong potential for reserve base.
Production
Wodgina’s production began in June 2010 at a rate of 2mtpa. Delivery of ore to Utah Port began in the first week of September 2010.
Atlas signed a facility agreement with Hedland Port Authority, to get access to public facility at Utah Point in November 2007. The five-year agreement with a three-year option allows export of 3mtpa by Atlas. Under the agreement, facility, berth, stockpile and handling area will be given to Atlas by PHPA on commercial rates.
Resources
In February 2010, Atlas signed a port cooperation agreement with Aurox Resources. The agreement allows Atlas to use the unutilised or surplus berth, shiploading and stockpiling facilities of Aurox.
Atlas Iron announced an initial inferred resource of 8.1mt at 57.5% Fe at Wodgina in January 2009. In January 2010, a 120% increase was reported in DSO resource from 8.1mt at 57.5% Fe to 20.9Mt at 57.7%. The increase in DSO resource was the result of aggressive drilling activities at the mine.
A DSO-grade iron ore prospect was discovered in June 2010. Named Hercules, the prospect is located nearly 3km from the mine infrastructure.
Infrastructure
Atlas has signed an agreement with Talison, the owner of the Wodgina Tantalum mine, to use its infrastructure at Wodgina mine. Under the agreement, Atlas has been using Talison’s modern crushing and screening facility, 10MW gas fired power plant, staff accommodation camp and other administration facilities.
Construction work required for commencement of mining operations includes great northern highway intersection upgrade, mine access road upgrades, pit-ore pad mine haul road and crushing and screening plant modifications to assist iron ore sampling and stockpiling.
Processing
The preliminary mining study, has provided conceptual pit tonnages with very low strip ratios. With the commencement of mining at Anson pits, a highly marketable product targeting at 57.7% Fe, SiO2 (silicon Dioxide) greater than 5.5%, and <2.0% AI2O3 (Sapphire Crystal) and <0.1% P product is delivered to the crushing and screening plant.
The existing resources are sufficient to deliver production of around 20mt over a targeted seven-year mine life at 57.7%+ Fe grade.
The operating cost will be in between A$38 and A$45 per ton over the life of the mine. The initial operating cost will be $50 per ton. The average annual operating cost will be A$41 per ton of ore mined inclusive of royalties for the targeted life of mine.
Drilling
During June 2009, the company declared its drilling results for the Wodgina, Mount Webber and Turner River projects. The RC drilling results for Wodgina project were: 62m at 59.2% Fe and 0.07% P from surface WDRC490, 46m at 60.2% Fe and 0.11% P from 12m in WDRC816; 60m at 57.8% and 0.05% P from 4m in WDRC819; and 44m at 59.5% Fe and 0.03% P from 38m in WDRC705.
The drilling results at Wodgina are a result of additional definition drilling around the high grade Dragon deposit, to the north-east of the Anson deposit.
Reverse Circulation drilling started at Wodgina in November 2008 in an area of enrichment adjacent to Talison’s South Tinstone tantalum open pit mine. This drilling discovered thickness of quality iron grades from surface consequently resulting in Anson prospect.
Environmental Impact
Specialist Studies for assessing the environmental impact began in 2009. The results indicate no major environmental impacts.
Altas signed a Native Title Mining agreement with the people of Kariyarra in September 2009. The agreement preserves cultural values in the region and reduces impact on the environment.
Altas director David Flanagan said: “This agreement also represents the last of three regional based agreements required to support our targeted 12mtpa mining rate by the end of 2012.”
