Atlas' Abydos project costed at $54m

Emerging miner Atlas Iron Ltd has pegged capital costs of its Abydos iron ore project at up to $54 million following a prefeasibility study.

The company said today a rail haulage option of $54 million plus $11 million contingency was estimated to be a higher cost than the road option which was pegged at $47 million plus $9 million contingency.

Cash operating margins have been estimated at between $30-50 per tonne.

The company is gunning for the rail option having signed a memorandum of understanding with Fortescue Metals Group Ltd last year to use its rail and Anderson Point ship loading facilities to export 3 million tonnes of iron ore each year from Abydos starting in late 2009.

"In the absence of a rail haulage or port solution via FMG the company will be using road trains to haul iron ore to the new public access port facilities at Utah Point in Port Hedland," Atlas said.

The company is targeting an annual 5mtpa production rate from both the Abydos and Pardoo iron projects by 2010.

Pardoo is expected to come online in December.