PERTH (miningweekly.com) – ASX-listed iron-ore miner Atlas Iron MD Ken Brinsden on Wednesday announced that the company would place its Pardoo mine on care and maintenance and wind down the Mt Dove operation.

Discussing the company’s quarterly operations update during a teleconference, Brinsden noted that a recent resource and reserve update had revised the reserve estimate of the Pardoo mine, prompting Atlas to shut down the operation.

“In the scheme of things, the closing down of Pardoo is a minor event, because the operation itself is not a big contributor to our Pilbara production these days,” Brinsden said.

He stated that Atlas Iron would replace the tonnes coming off the Mt Dove and Pardoo mines with new tonnes coming through the Mt Webber mine and from the subsequent expansion of the operation.

The A$146-million Mt Webber operation is being developed in stages, initially producing some three-million tons a year of direct shipping ore material, expanding to a six-million-tonne-a-year operation. First production is set for December.

Brinsden added that no job losses would be incurred with the closure of Pardoo, as both permanent and contract staff would be redeployed to Atlas’ other operations, specifically the Mt Webber site.

Meanwhile, he reported that Atlas had shipped a record 2.22-million tonnes of ore during the three months to June, up 16% on the March quarter. Full-year shipping reached 7.4-million tonnes as the miner focused on increasing its output.

“This is a strong result, with the company continuing to expand production while meeting the quarter’s cost and shipping guidance. It was achieved despite difficult and unseasonable weather conditions,” Brinsden said.

“At a time when we have been investing heavily in the growth of the business, including the development of multiple mines and port facilities, we have continued to maintain a healthy cash balance. This demonstrates the strong cash flow being generated from the expanding mine portfolio.”

Atlas has now expanded its North Pilbara production rate to nearly nine-million tonnes a year, and would reach a yearly rate of ten-million tonnes by the September quarter, and 12-million tonnes by June 2014.

Construction of the Abydos project continued to progress during the quarter under review, and the mine was expected to conduct its first haulage during the second half of August.

The mine would deliver between two- and three-million tonnes a year of ore, over an initial six-year mine life.

Brinsden also announced that Atlas’ total Pilbara ore reserve had increased to 507-million tonnes, while total resource stood at 1.2-billion tonnes, with the miner also announcing a maiden inferred resource of 25-million tonnes, grading 56.5% iron, at its Corruna Downs project.

“We have added another 100-million tonnes in resource in the Pilbara. We have also replaced the tonnes we mined and have seen growth in the company’s underlying reserve base and, importantly, in the Horizon 1 mine, which is producing today,” Brinsden said.

The Horizon 1 ore reserves have increased to 84.6-million tonnes.