Australia mining company Atlas Iron has given approval to develop the Corunna Downs Iron Ore Project in Western Australia.

The iron project in Pilbara region is likely to be developed with an investment between A$47-53m ($36-40.8m).

Atlas Iron expects to fund the development cost from operating cashflow after its lenders agreed to support modifications to the Term Loan B facility.

Atlas managing director Cliff Lawrenson said: “This is a strong vote of confidence in Atlas by our lenders, several of whom are significant Atlas shareholders.

“Corunna Downs, together with Mt Webber, will rebuild our production rate to approximately 12mtpa after Wodgina and Abydos cease production in the first and second half of 2017 respectively.

“The amendments to the facility will enable Atlas to capitalise on current and future opportunities provided by the stronger iron ore price.”

The first iron ore shipment from the Corunna Downs project is slated to begin in the March 2018 quarter. It will have an initial production rate of 4mtpa through 5-6 year mine life.

Atlas stated that it is looking at an aggregate export rate of 12mtpa by the June quarter next year from the Corunna Downs project and also the expanded Mt Webber project, which was opened in July 2014 and also located in the Pilbara region.

Corunna Downs is located about 35kms to the west of the Mt Webber Project and also close to Atlas Iron’s existing North Pilbara portfolio as well as Port Hedland.

According to Atlas Iron, the mineral resources found after considerable drilling at the Corunna Downs project site was 65.4mt.