Atlas Iron founder David Flanagan takes over as managing director

ATLAS Iron founder David Flanagan is preparing to steer his troubled company through uncharted waters with the support of loyal contractors.

CEDA resources lunch at Perth Convention Centre. In photo David Flanagan (Atlas Iron Ltd). Photo by Marie Nirme

ATLAS Iron founder David Flanagan is preparing to steer his troubled company through uncharted waters with the support of loyal contractors.

Mr Flanagan stepped aside as chairman of the junior iron ore miner this week to take up his former role as managing director.

It’s been a rollercoaster ride for the Murdoch University chancellor, who saw the mining company through the boom times before passing the baton to Ken Brinsden in 2012.

Atlas was forced to suspended all mining operations and trading in its shares in April when iron ore prices dropped below $US50 a tonne, making the company unprofitable.

But Mr Flanagan is positive about the future and has worked hard to get major contractors to invest in the company.

“If I had been in this business promoting a culture where we scratched, clawed, bit, kicked and fought for every scrap of value off the table with each of our contractors for the last seven years maybe we wouldn’t have the opportunity that we’ve got in front of us right now,” Mr Flanagan told AAP.

Ken Brinsden, who moves from MD to executive director of Atlas Iron

“I think they take comfort when they see the board and me show 100 per cent commitment to the business.”

Mr Flanagan’s business relationships, particularly with the heads of haulage group McAleese, MACA Mining and Qube Logistics, have been vital to keeping the company afloat.

“I am here to solve the problems, to do what has to be done,” he said.

On June 25, Atlas shareholders will vote on a package to raise capital and reduce costs to maintain the company’s listing on the Australian share market.

“Without it, the business isn’t really as strong as it needs to be,” Mr Flanagan said.

Still, Mr Flanagan said he was pleased with the iron ore price’s recent increase, taking it to around $US65 a tonne.

Atlas has sold cargoes for the December quarter of 2015 above its recently stated break-even price of around $US50 a tonne.

Atlas is conducting a capital raising at an issue price of five cents per share, a 58 per cent discount on their current price.

The capital raising will involve a placement for Atlas contractors for up to $30 million worth of new shares, a placement to new and existing shareholders to raise up to $50 million, and a shareholder participation offer to eligible Atlas shareholders to raise up to $100 million.

Atlas will also issue BGC Contracting up to $17.4 million in shares.

Ken Brinsden will step aside as managing director to take on a role as executive director, and former West Australian Attorney General Cheryl Edwardes has been appointed chairman.

Originally published as Atlas Iron founder David Flanagan takes over as managing director