It is reported that Atlas Iron has sold its Balla Balla magnetite iron ore project in Western Australia to junior mineral and energy explorer Forge Resources for USD 40 million.

The project in the Pilbara region also contains vanadium and titanium, which are used to strengthen steel while the consideration paid to Atlas also includes a capped royalty payment based on volumes sold.

Forge said in a statement that the project was a compelling opportunity although two sales contracts signed by Atlas in 2007 required validation with customers.

Atlas is focused on mining easy-to-produce hematite iron ore which does not require processing, and has long sought to sell its magnetite assets including the much larger Ridley project near its first mine, Pardoo.

Forge said it had already received a letter of intent from a major Australian bank for project financing.

(Sourced from www.news.com.au)