Windimurra Vanadium Project

Overview

Atlantic acquired 100% of the Windimurra Vanadium Project in 2010.  After achieving first production in January 2012, Atlantic is now accelerating towards full production of 6,300 tonnes per annum of contained vanadium in the first calendar quarter of 2013.

Independent research by CPM shows that the Project will be a lowest quartile cash cost vanadium producer as a result of the following:

• the attractive transaction metrics negotiated by Atlantic that fundamentally restructure the capital base of Midwest Vanadium Pty Ltd (MVPL) and deliver the benefit of over $500 million of prior capital expenditure for a net present value of $68 million of retained debt;
• consolidation of ownership that will streamline the management of the Project under the control of one group;
• the acquisition of the crushing and beneficiation plant that will deliver material long-term cost savings;
• identification of the haematite by-product revenue stream opportunity, thereby releasing significant further cash credits for the Project, driving costs into the lowest quartile; and
• renegotiation of key supply contracts.

New selective mining opportunities that have the potential to release further material cost savings.

Windimurra production is expected to meet about 7% of world demand, and it is expected global demand growth will require the equivalent of a "new Windimurra" to come on stream almost every year. Windimurra will also have the advantage of being one of the world's low cost vanadium producers.

Australian vanadium sold to consumers in the US is subject to a Free Trade Agreement while vanadium producers from China, South Africa and Russia are subject to anti-dumping duties of between 3.5% and 100%.

Location

The Windimurra Vanadium Project is located approximately 600 kilometres north of Perth and 80 kilometres by road from Mount Magnet in Western Australia.

The Windimurra deposit lies within the eastern flank of the large (>2,000km²) Windimurra intruded layered gabbro complex, which is part of the regional Murchison granite-greenstone province.

Development Plan

Following completion of the acquisition of the Project, MVPL began preparations for the recommencement of construction at the Project. This is targeted to begin in early calendar 2011 with a view to achieving first production in mid 2011.

At completion, MVPL completed the acquisition of the existing accommodation camp at the Project site, providing enhanced flexibility to manage the construction and commissioning the Project in the months ahead.

MVPL has now engaged PinC Group Pty Ltd (PinC), an experienced and well resourced project management and project services group, to work with MVPL management to oversee all aspects of construction completion, including developing MVPL's contracting strategy and monitoring the work of individual construction contractors following appointment.

PinC recently completed the successful Utah Point expansion project for the Port Hedland Port Authority and Atlantic is delighted with the early stage discipline and processes that PinC bring to the Project.

Key construction contracts are defined into three distinct work streams:

• Structural, mechanical and piping;
• Electrical and instrumentation; and
• Civil work.

MVPL has made further progress on the implementation of its strategy to monetise the stockpile of haematite at Windimurra and the approximately 1 million tonnes per annum of haematite produced by the Project once it is operational. In particular, constructive discussions have been held with the logistic supply chain partners required to deliver the product into the seaborne world market.

MVPL is also focused on building the management team at Windimurra and a dedicated MVPL recruitment resource has been appointed to oversee this important component of the Project.

Geological Studies

Mineral Resources

The inherited mineral resource base of the project, was based on a mineral resource estimate from a 6 kilometre identified strike length and reported in December 2008. The total resource was 176.59 million tonnes at 0.46% V₂O₅, using a lower cut-off of 0.275% V₂O₅.

To improve the geological knowledge of the targeted start-up mining area (a cutback of the exiting pit) an infill reverse circulation drilling program of 3,400 metres was undertaken between November 2010 and January 2011. The drilling allowed better definition of grade distribution within the stacked flow packages; the identification of enriched grade zones (greater than 0.52% V₂O₅); definition of  the weathering and hence beneficiation recovery profiles; and the extension of the known resource base down to a depth of 150 metres (previously identified to 90 metres).

Based on the drilling results, a revised global mineral resource estimate was compiled to JORC compliance standards and was released in March 2011, resulting in a 19% increase in the mineral resource base of the project to 209.97 million tonnes at 0.47% V₂O₅, using a lower cut-off of 0.275% V₂O₅.

Infill drilling – start-up mining area

Mineral Resources – Windimurra Vanadium Project (lower cut-off of 0.275% V₂O₅)

	December 2008				March 2011
	Tonnes (Mt)	V2O5%	Tonnes (V)	V%	Tonnes (Mt)	V2O5%	Tonnes (V)	V%
Measured	46.68	0.48	126,000	0.27	49.90	0.46	124,700	0.25
Indicated	70.73	0.47	183,000	0.26	100.28	0.47	260,700	0.26
Inferred	59.18	0.44	148,000	0.25	59.79	0.48	161,400	0.27
TOTAL	176.59	0.46	457,900	0.26	209.97	0.47	546,800	0.26

Ore Reserves

The inherited ore reserve base of the project, on the successful completion of the project acquisition by Atlantic Ltd in September 2010, was based on an ore reserve estimate from an identified 3.7 kilometres core of the 6 kilometres resource base reported in December 2008. The total ore reserve was 97.8 million tonnes at 0.46% V₂O₅, using a lower cut-off of 0.275% V₂O₅. The life of mine was 24 years based on 4 million tonnes per annum feed rates.

A new ore reserve study was undertaken in 2011, using the improved mineral resource position and also using the techniques of up to four (4) selective mining grade bins dependant of weathering profile, with interim stockpiling and reclaim of the lower grade proportions, to further optimise the mine schedule and to improve the head grade. The results of the study confirmed that a 10% increase in head grade was achieved using these techniques for the first 10 years of the operation, from the 2008 position of 0.47% V₂O₅ to 0.51% V₂O₅. The pit designs were also extended to a depth of 150 metres where viable, and were optimally sequenced to ensure optimal selectively mined grades were supplied to the plant in priority of grade distributions.

The new ore reserve position resulted in a 30% increase from that reported in 2008, due to the underlying improved mineral resource base and the use of the above selective mining sequencing techniques. The life of mine was also extended to 28 years based on 4 million tonnes per annum feed rates.

December 2008 Ore Reserves
(Global lower cut-off of 0.275% V₂O₅)

Classification	Tonnes (Mt)	Grade V2O5 %	Tonnes  (V)	Grade V %
Proven	40.7	0.47	105,800	0.26
Probable	57.1	0.47	148,500	0.26
TOTAL	97.8	0.47	243,300	0.26

May 2011 Ore Reserves
(Variable lower cut-off dependant of weathering state; Oxide= 0.34% V₂O₅; Transitional = 0.32% V₂O₅; Fresh = 0.27% V₂O₅)

Classification	Tonnes  (Mt)	Grade V2O5 %	Tonnes  (V)	Grade V %
Proven	49.3	0.46	128,200	0.26
Probable	78.3	0.47	206,000	0.26
TOTAL	127.6	0.47	334,200	0.26

The revised pit design comprises up to 7 stages, over a strike length of 4.3 kilometres, for a life of mine of 28 years, to a maximum depth of 155 metres.

2011 Staged Pit Design 

Exploration

The acquisition of the Windimurra project included a package of 100% owned mining and exploration tenements covering a total strike length of 27 kilometres of prospective ground for titano-vanadium, and magnetite based iron ore-style mineralization. The current mineral resource base on which the Windimurra Vanadium mine and processing facility is being commissioned is located on the northern 6 kilometre corridor within this. Of this 6 kilometre strike that has been drilled, the current open-pit mine design extracts an inner 4.2 kilometres. This leaves an extensive 21 kilometre strike package unexplored to the south.

Midwest Vanadium Tenement Holdings

A high resolution aero-magnetic response survey was undertaken over the ground in 2007, with further detailed fill-in lines undertaken in 2008. The responses showed that the high magnetic gabbros associated with the lower layered sequence of Shepherd’s Discordant Zone, which hosts the titano-vanadium horizon at Windimurra, extends through the acquired southerly tenement holdings.

Exploration of the region has had a chequered and limited history, with several companies undertaking low level reconnaissance surveys (Hawkstone Minerals and Ferrovanadium Corp in the 1970’s and early 1980’s; an Alcoa Australia and BHP Minerals Joint Venture in the mid 1980’s and Precious Metals Australia in 1989). All exploration and resource development works were undertaken within the northern 6 kilometre strike length that now forms the Windimurra Vanadium mine.

Aeromagnetic signature, Windimurra southerly extensions

Atlantic initiated the first exploration on this greenfields ground in January 2011, via 5 traverse lines of reverse circulation drilling, 5 kilometres apart, across the high magnetic signature. This scout drill program was not designed nor intended to return a quantifiable mineral resource, but to be used as a tool in confirming the overall geological setting and weathering states, and to return an understanding into the broad V₂0₅, Fe and TiO₂ grade distributions within the belt. As such, it was designed as a preliminary stepping stone in the development of a future targeted strategy for these tenements.

The scout program was successful in confirming the continuous presence of the main vanadium-magneto horizon as expressed in the Shepherd’s Discordant Zone (SDZ) at Windimurra, for the strike length of the southerly tenement holdings.  Widths of mineralization and grades of vanadium bearing units were comparable to Windimurra for the first 9 kilometres south of the proposed current life of mine pit design, and then reduced to approximately half the width by the southern extent was reached, whilst the vanadium grade was maintained. A second peripheral vanadium-magneto horizon was located some 400 metres west of the main SDZ. This unit had an average of 7 metres and an identified strike length of 4.7 kilometres, in the southern section of the tenement holdings.

3D of Aeromagnetic signature with drill lines 

Atlantic is committed to future systematic further exploration of this highly prospective southern extension of the known Windimurra deposit. Future programs will include follow up exploration and definition of resources based on the previously identified 0.80% V₂O₅ outcropping massive magnetite hosted beds that outcrop, as well as specialized steel market ore products within the belt.

Competent Person Statement

Mineral Resources and Exploration Activities
The information in this report relating to exploration activities and mineral resources is based on information compiled by Colin J S Arthur, who is a Chartered Geologist, Member of The Australasian Institute of Mining and Metallurgy and Fellow of the Geology Society of London.  Mr Arthur was, until 20 September 2012, a full-time employee of Midwest Vanadium Pty Ltd in the capacity of Chief Geologist.

Mr Arthur has over 26 years experience in this style of mineralization and the type of deposit under consideration and related mining method and project evaluation.  He has sufficient experience which is relevant to the style of mineralization and to the activity which he has undertaken.  He is therefore qualified as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.  Mr Arthur consents to the inclusion of this report in the form and context in which it appears.

Ore Reserves
The information in this report that relates to Ore Reserves is based on information compiled by Quinton de Klerk, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr de Klerk is a Director and Principal of Cube Consulting Pty Ltd (CUBE).

Mr de Klerk has sufficient experience which is relevant to the activity that he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr de Klerk consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.

Schedule of Tenements

Tenement No	Prospect	Status	Grant date	Expiry date	Conversion	Area	Rent $	Commit $	Rpt/Code
Western Australia Windimurra
E 58/113	Windimurra	G	8 Mar 1991		M 58/275-9 (Sec 67)	35.8 km2	5,274.00	100,000	C 79/1999
E 58/117	Windimurra	G	19 Jan 1992		M 58/279, M 58/282 (Sec 67)	2 blocks	907.00	50,000	C 79/1999
E 58/198	Windimurra	G	18 Apr 1997		M 58/281 (Sec 67)	1 block	453.50	20,000	C 79/1999
L58/27	Stag Well	G	23 Jun 1998	22 Jun 2013		1,675 HA	22,277.50	0
L 58/28	Stag Well	G	23 Jun 1998	22 Jun 2013		790 HA	10,507.00	0
L 58/29	Stag Well	G	12 Nov 1998	11 Nov 2013		46.2 HA	625.10	0
L 58/30	Windimurra	G	12 Nov 1998	11 Nov 2013		2,275.7 HA	30,270.80	0
L 58/32	Windimurra	G	3 Jul 2001	2 Jul 2022		202 HA	2,686.60	0
L 58/35	Windimurra	G	12 Jun 2009	11 Jun 2030		670 HA	335.00	0
M 58/178	Windimurra	G	12 Jul 1991	11 Jul 2012		966.9 HA	14,505.00	96,700	C 79/1999
M 58/272	Windimurra	A	12 Dec 1997	Appl’n		633.8 HA	0.00	0
M 58/275	Windimurra	A	5 Mar 1998	Appl’n		990 HA	0.00	0
M 58/276	Windimurra	A	5 Mar 1998	Appl’n		996.6 HA	0.00	0
M 58/277	Windimurra	A	5 Mar 1998	Appl’n		905.1 HA	0.00	0
M 58/278	Windimurra	A	5 Mar 1998	Appl’n		970.9 HA	0.00	0
M 58/279	Windimurra	G	4 Jun 1999	3 Jun 2020		835.9 HA	12,540.00	83,600	C 79/1999
M 58/280	Windimurra	G	4 Jun 1999	3 Jun 2020		534.6 HA	8,025.00	53,500	C 79/1999
M 58/281	Windimurra	A	5 Mar 1998	Appl’n		157.3 HA	0.00	0
M 58/282	Windimurra	A	5 Mar 1998	Appl’n		71.7 HA	0.00	0
					Approximate	172.0 km2	108,406.50	403,800	19 Tenements in Total

Status References:

A   Application          G   Granted          Q   Plainted

NOTES

• All minimum exploration expenditure commitments on the tenements, as per above, have been met by the Company due to expenditure on exploration, resource development and infrastructure development associated with the Project over the last year.