Atlas Iron has bought Gondwana Resources’ 90 per cent stake in the Corunna Downs project in Western Australia for $2.1 million in cash.

The Corunna Downs exploration prospect is located approximately halfway between Atlas Iron’s Mt Webber and McPhee Creek prospects in the North Pilbara region.

Gondwana said it did not possess the financial resources to develop Corunna Downs alone, and its iron ore potential could only realistically be developed by a miner with established iron ore deposits and operations in the region, such as Atlas Iron.

Atlas will pay the $2.1 million consideration over three stages.

Gondwana will retain a royalty of $1.13 per tonne for all iron ore mined at Corunna Downs.