Atlas shareholders approve $180m raising

Atlas Iron’s new chairman Cheryl Edwardes has made her first pitch to shareholders, saying a $180 million capital raising will insulate the company against future iron ore price volatility.

杭州桑拿

Shareholders will vote on the capital raising at the Atlas annual general meeting on Thursday, two months after the junior miner suspended mining operations and trading in its shares when iron ore prices dropped below $US50 a tonne.

Ms Edwardes said the dilutionary capital raising was an “integral part of the strategy to insulate Atlas against future iron ore price volatility and maximise the company’s ability to generate strong returns for shareholders in the future”.

“In light of the volatile iron ore price environment, participating in the capital raising is not without its risk,” Ms Edwardes told the annual general meeting on Thursday.

“However, the board believes the terms of the offer are both attractive for investors while enabling Atlas to strengthen its financial position considerably.”

Atlas predicts the iron ore price, which is trading around $US61 a tonne, will move between $US50 to $US70 per tonne over the next two years, despite analysts’ predictions that it could drop as low as $US38 per tonne in the months ahead.

Atlas, which has $340 million of debt with US bond holders which is due in December 2017, is confident the majority of its 34,000 shareholders will support the capital raising.

Managing director David Flanagan embarks on an international roadshow to Hong Kong, Singapore, London, Edinburgh, Australia and New Zealand during July.