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Pilbara iron ore developer Aurox Resources Limited (AXO) and Atlas Iron Limited (AGO)  today announced  they  had  entered  into  a  Scheme  Implementation  Agreement  to affect the merger of the two companies. Atlas will issue Aurox shareholders with one Atlas share for every three Aurox shares they hold upon implementation. Atlas will also make offers to Aurox option holders to issue Atlas shares to them on a ratio determined by reference to the respective exercise price and expiry date of their options. The  Board  of  Aurox  has  unanimously  recommended  that,  in  the  absence  of  a  superior  proposal,  all Aurox  security  holders  vote  in  favour  of  the  Scheme. The Aurox Board members  intend  to  vote  in favour of the Scheme in relation to their personal shareholdings in Aurox, in the absence of a superior proposal.

The merger provides for Aurox shareholders to participate  in  Atlas’  rapidly  growing  production profile,  which  will  position  the  company  as  a globally significant iron ore producer;  retain xposure to the world class Balla Balla Project but at the same time gain exposure to a large portfolio of quality iron ore projects throughout the Pilbara. The merged company will offer investors a substantial growth profile with a pipeline of assets and opportunities.

Managing  Director  of  Aurox,  Mr  Charles  Schaus,  said  the  proposed  merger  is  an  outstanding opportunity for the Aurox shareholders to join with and participate in an impressive diversified iron ore growth company. “The high premium offered by Atlas is a great deal for Aurox shareholders. It reflects the high potential of the Balla Balla project, Aurox’s access to infrastructure and regionally significant water resource.” Mr Schaus said. “With iron ore prices expected to increase significantly in the coming year, this merger will give Aurox shareholders the opportunity to share in the benefits from immediate cashflows,” he said.

Under the SIA Atlas will acquire all of the issued shares in Aurox. Aurox shareholders will receive one Atlas share for every three (3) Aurox shares they hold. As part of the SIA, Atlas has agreed to extend an unsecured, interest bearing loan of up $7.7million to Aurox in order to enable Aurox to redeem the outstanding convertible notes which are due to mature on 30 June 2010.  The loan will be repayable on the earlier of 4 months from the date of draw down and 20 business days after termination of the SIA.

www.aurox.com.au

www.atlasiron.com.au