Atlas Iron Limited announced that that it has agreed to sell its Yerecoin magnetite project to Cliffs Natural Resources for AUD 18 million cash, with the full amount payable when the deal is completed, being on or before January 31st 2012.

Further payments may be payable based on magnetite and direct shipping ore reserve tonnes as follows:

Within 30 days of a Decision to Mine, Cliffs agrees to immediately pay amounts equal to:
(a) AUD 0.10 per tonne for each tonne of magnetite exceeding 187 million tonnes proven in a Reserve within the Tenements, or if not proven in Reserve, mined or to be mined as a Resource, up to an additional 200 million tonnes
(b) AUD 0.50 per tonne for each tonne of direct shipping iron ore exceeding 5 million tonnes proven in a Reserve within the Tenements, or if not proven in Reserve, mined or to be mined as a Resource.

Mr David Flanagan MD of Atlas said that “This agreement realises value for Atlas from an asset it inherited through the takeover of Giralia Resources. At the same time, the sale agreement enables Atlas to retain some upside in the project. Atlas announced last week that it had agreed to sell its Balla Balla magnetite project in Western Australia to Forge Resources for AUD 40 million plus a royalty. Atlas team is in ongoing negotiations with potential investors or partners in respect of its Ridley magnetite project in the Pilbara.”