This morning Atlas Iron Limited [ASX:AGO] experienced a massive share price increase of 42.11%.
They are now trading at 27 cents a share, while holding a market cap valued at $250.549 million.
Atlas Iron specialises in the basic materials sector and work as an independent ore company.
Their main objectives are currently in their Abydos and Mt Webber mines, both located in Western Australia.
Bidding scheme
Recently, Mineral Resources Limited [ASX:MIN] announced that they have entered a binding implementation deed with Atlas to combine the companies.
The scheme will result in Mineral Resources (MRL) acquiring all shares of Atlas under the new terms of the agreement which have been established by the companies.
Shareholders of Atlas will gain one new MRL share for every 571 Atlas shares they hold on record, which is based on closing prices between the two companies that add up to a 59% premium.
Existing Atlas shareholders will be joining the MRL register and will retain further interest into the business as it grows down the track.
Purchasing ore
Atlas has signed an agreement back in March with Pilbara Minerals Limited [ASX:PLS].
The agreement will allow Atlas to further purchase ore from Pilbara and export up to 1.5 million tonnes of lithium DSO to engineering company, Sinosteel.
Atlas will be in charge of the ore development from the Pilgangoora, holding responsibility in logistical transportation.
Smallcaps.com reported that Atlas’ Managing Director Cliff Lawrenson stated:
‘We are increasingly confident that this strategy will enable to reduce the price discounts applied to our fines produces while at the same time continuing to enjoy robust margins on our lump product.’
Atlas is currently operating various iron ore projects located in Western Australia’s Pilbara region.
There are approximately 1.15 billion tonnes of mineral resources to be gathered from the project.
Regards,
Ryan Clarkson-Ledward,
For Markets & Money
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