Exceptional Magazine : 2011 Exceptional Magazine
Altas Iron Limited / Listed category winner Exceptional 2011 “We were the frst iron ore miner to start up without a sales contract. We survived and we thrived." David Flanagan, Atlas Iron Limited Ore inspiring David Flanagan changed the traditional paradigms of the iron ore industry, with a new model that accelerates the time required to commission a mine. Atlas Iron Limited exported its frst million tonnes of iron ore in 2009, delivering on all production milestones within 12 months of start-up. Meet the 2010 Entrepreneur Of The Ye a r Listed category winner. The Entrepreneur Of The Ye a r National judging panel was won over by Flanagan's entrepreneurial thinking, his ability to look at accepted norms and fnd a different way, his ability to capitalise on the resources boom and his ingenuity in competing with the bigger players. In the frst year after Atlas Gold was listed, Flanagan explored for all kinds of metals and industrial materials. When he found iron ore, he changed the company's name and fundamentally challenged the traditional paradigms of the iron ore industry. The traditional model for iron ore producers was long-life mines requiring high capex, but low opex, creating high barriers to entry. Flanagan saw an opportunity for a materially different iron ore model based on low capex, medium mine life and medium opex. Fo r example, iron ore mines normally take years to commission and cost billions of dollars to do so. Atlas exported its frst ore within just four years of listing and within eight weeks of environmental approval --- on capex of only $18 million. Flanagan further differentiated the company by using a unique mutual fairness clause to market his iron ore. Atlas sells its ore at the average of the benchmark price and the spot price. This gives the company 50% exposure to the spot price, with the low counter-party risk of a long-term contract with a direct customer. Atlas also challenged the market perception that the high-grade (62% --- 63%) iron ore sold by the mining majors was the only acceptable benchmark. Flanagan changed this paradigm, in some instances selling ore at 54% grade. The result is a normalised base of 58% and an acceptance by consumers of junior miners in the market. In December 2009, Atlas exported its frst million tonnes of iron ore, delivering on all key production milestones within 12 months of start up. This year, Flanagan was able to acquire Aurox Resources for $143 million. "We have made acquisitions with minimal downside but plenty of potential upside, and we have had a great team to execute projects," he says. Atlas Iron Limited currently has 22,000 shareholders and $130 million in cash on hand. Flanagan’s fve-year plan is to pursue already identifed exploration and infrastructure opportunities.
2012 Exceptional Magazine