ATLAS IRON LIMITED (AGO)



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General Information
Company Name: Atlas Iron Limited
Stock Code: AGO
Website: www.atlasiron.com.au
GICS Sub-Industry: Diversified Metals & Mining
Market Cap ($M): 902
Equiv. Shares (M): 915

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
 $ 0.955 $ 0.975 $ 0.990 $ 0.955 $ 0.985 8,146,996 $ -0.030  -3.046 %

Current Broker Consensus Recommendation more
Recommendation: Hold
Recommendation Date: 21st Mar 2014
12 Month Target Price (average): $1.081
Brokers Surveyed: 7

Company Overview

Business Description:
Atlas Iron Limited (AGO) is an independent Australian iron ore company which produces and exports mining and exporting Direct Shipping Ore (DSO) from its mines in the Northern Pilbara region of Western Australia. Currently, AGO’s projects have total Resources of 1.17Bt@ 56.1% Fe and Reserves (Proven and Probable) of 506.8Mt @ 56.1% Fe. FY13 DSO shipping is 7.4Mt.

Strategy Analysis:
Atlas operates three iron ore mines at Pardoo, Wodgina and Mount Dove in the Pilbara region of Western Australia. Production exceeded 6Mtpa by the end of 2012 with 12Mtpa targeted by 2014. Atlas continues to pursue acquisitions predominantly within the Pilbara region. An exploration program has been rolled out with a substantial increase in the resource and reserves position so far. Atlas Iron reported a net loss of $256.04m for the half-year ended 31 December 2012. This result was adversely impacted by a previously announced non-cash impairment charge on capitalised tenement costs and a non-cash write-down on non-core assets of $258.0m. Revenues from ordinary activities were $288.26m, down 15.6% from the same period last year. Basic and Diluted EPS was (28.3) cents compared to 0.7 cents last year. The net operating cash outflow was $5.32m compared to an inflow of $117.71m in the pcp. The interim dividend declared was 3.0 cents compared with 3.0 cents last year. The company is now producing at a rate of 8Mtpa and is on track to increase production to 10Mtpa by the end of June 2013.


Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2015  F -22.6 -2.5 -140.2 -40.0 0.0 0.0 0.0
2014  F 56.4 6.1 277.6 16.1 0.0 0.0 0.0
2013  A 14.7 1.6 -81.3 86.8 3.0 2.1 0.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F
Atlas Iron (AGO) $888 M -- 6.2527 0.0096 52.1505 7.1905 7.1219 0.0309 0.0309 0.0307
BHP Billiton (BHP) $122,365 M -0.2435 0.0830 -0.0500 15.9923 14.7663 15.5428 0.0328 0.0294 0.0307
Iluka Resources (ILU) $3,810 M -0.6600 0.1399 1.3166 29.6707 26.0297 11.2360 0.0099 0.0215 0.0427
Rio Tinto (RIO) $27,614 M 0.5848 -0.2605 0.0467 8.2528 11.1606 10.6622 0.0339 0.0309 0.0338
Sims Metal Management (SGM) $2,026 M -0.7514 4.5651 0.6395 118.3990 21.2752 12.9763 0.0000 0.0108 0.0302

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
AGO 0.58 8.72 0.56 0.05 1.29
Market 1.07 15.9 1.26 1.99 1.71
Sector 0.88 12.2 0.67 0.72 4.97

Directors
Name Position Start Date
Mr David N Flanagan Executive Chairman 15 September 2004
Mr Mark David Hancock Executive Director,Joint Company Secretary 04 July 2008
Mr Kenneth Edward Brinsden Managing Director 21 February 2012
Mrs Kerry Sanderson Non-Executive Director 21 February 2012
Mr Geoffrey (Geoff) J Simpson Non-Executive Director 28 May 2012
Mr David Hannon Non-Executive Director 06 August 2004
Ms Tai Sook Yee Non-Executive Director 31 May 2010
Mr Jeff Dowling Non-Executive Director 08 November 2011
Dr David Marshall Smith Non-Executive Director,Lead Independent Director 06 November 2009

Management
Name Position
Robert Wilson Chief Development Officer
Anton Rohner Chief Financial Officer
Jeremy Sinclair Chief Operations Officer
Yasmin Broughton Company Secretary,General Counsel

Substantial Shareholders
Holding Name
85,612,258 (9.41%) IMC Resource Investment Pty Ltd (formerly IMC Resources Pty Ltd)

Calendar of Events
Date Event
24 February 2015 Report (Interim)
30 January 2015 Report (Quarterly)
28 January 2015 Report (Quarterly)
16 October 2014 Report (Quarterly)
26 September 2014 Report (Annual)
21 August 2014 Report (Prelim)
23 July 2014 Report (Quarterly)
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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