Atlas Iron restructures its debt, shares go on a tear

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Atlas Iron has restructured its debt as iron ore prices continue to squeeze the margins of junior miners.

The deal with lenders cuts debt to $US135 million from $US267 million with the maturity date extended to April 2021 from December 2017.

This means interest expenses are reduced by more than 65% as result of the lower debt balance and a reduced interest rate.

The news sent Atlas shares soaring. A short time ago they were up 17.6% to $0.02.

Atlas also said it had managed to lower costs of producing a tonne of ore by a further $A2 to $A4. The company’s full cash costs of producing a tonne are between $A55 and $A59 a tonne.

The price of iron ore is currently around $US40 a tonne (about $A55).

In August, the miner posted a $1.4 billion loss for the 2015 financial year.

The Pilbara miner started mothballing its mines in April because the cost of digging the ore was greater than the price on the global market.

It re-started after doing deals with contractors and cutting costs hard. It also raised $A87 million from shareholders to give the company a cushion against price fluctuations.

Earlier this month BC Iron suspended operations at its Nullagine mine because of the falling price of iron ore.

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