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Atlas Iron (ASX:AGO) announced that it has signed a key new iron ore sales agreement with a major international trading group for 5 million tonnes per annum of Atlas standard fines for up to two years.
Atlas Iron (ASX:AGO) announced that it has signed a key new iron ore sales agreement with a major international trading group for 5 million tonnes per annum of Atlas standard fines for up to two years.
As quoted in the press release:
The iron ore sales agreement, with a major international trading group is for 5 million tonnes per annum of Atlas standard fines for up to 2 years duration The agreement is in the form of 4 x 6 month options excercisable at the customers election (the first of which has been exercised), with floating pricing referencing the 62% Fe index and market linked product quality discounts.
Atlas maintains full flexibility to overlay a range of hedging products direct with the customer or via its banking arrangements, consistent with its previously stated pricing strategy.
Independent to the new iron ore sales agreement, the Company has also executed 6 new fixed price sales contracts for lump and fines cargos in the March 2016 Quarter at an average price net to Atlas of US$50/DMT (~15% of the March Quarter production at ~A$67/WMT CFR at USD/AUD $0.71 exchange). This compares favourably to recently reported Full Cash Costs for the month of August of A$56.52/WMT CFR and to the March 2016 Quarter index which is currently ~ US$48/DMT for 62% fines product.
David Flanagan, managing director at Atlas Iron, commented:
Demand for our ore is strong and that means good agreements, good prices and high quality counterparties. The support we are getting from our customers is evidence that our ore is an important part of their product mix, and that’s good for Atlas.
Click here to read the full Atlas Iron (ASX:AGO) press release.