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Recent drilling focused on about 10% of an 80km strike length of prospective rock units between Atlas’ Corunna Downs and McPhee Creek iron ore projects, which was interpreted to demonstrate the continuity of an emerging province within trucking distance of Port Hedland.

Testing of prospects at Corunna Downs returned drill intercepts including 108m at 60.4% iron from 36m and 100m at 58.2% iron from surface.

Other results included 78m at 59% iron from 2m and 96m at 59.1% iron from surface.

“This information, combined with the project’s strategic location, leaves Atlas increasingly confident about the potential for Corunna Downs to become a substantial new iron ore province for the company,” Brinsden said.

“The Corunna area is a potential game changer for Atlas.

“It has the scope to provide grade, scale, low impurities levels and be delivered by road to Port Hedland or assist in providing the critical mass of tonnes required for future infrastructure solutions.”

Atlas set an initial exploration target for the first 8km of strike in the north of Corunna at 100-150 million tonnes at 55-58% iron.

Key elements of the geology at the recently tested prospects were identified as a banded iron formation section more than 60m thick and low phosphorous, silica and alumina.

The company said it was continuing exploration and infill drilling within the north of Corunna with a view to realising the potential in the target area.

Last week, Atlas announced it had signed sales contracts for 2014 representing about 60% of its production for the coming year, with negotiations over a further 20% nearing completion and the remainder reserved for sale on the spot market.

The contracts relate to existing production that will roll over into 2014 and for new production from the company’s expanded base.

The contracts range from 400,000 tonnes per annum (equal to one ship per quarter) to 1.2 million tonnes per annum (one ship per month).

Shares in Atlas were last trading 2.9% higher at $A1.22.