Looking Beyond the Knob Looking Beyond the Knob Looking Beyond the Knob Looking Beyond the Knob What’s After What’s After What s After What s After Peculiar Knob? Peculiar Knob? Peculiar Knob? Peculiar Knob? Bob Duffin Bob Duffin Executive Chairman Executive Chairman Executive Chairman Executive Chairman WPG Resources Limited WPG Resources Limited SAREIC Presentation SAREIC Presentation SAREIC Presentation SAREIC Presentation 3 May 2011 3 May 2011
Key Corporate Information y p Directors: – Bob Duffin (executive chairman) – Heath Roberts (executive) – Gary Jones (executive) Gary Jones (executive) – Bob Richardson (independent non executive) – Len Dean (independent non executive) – Dennis Mutton (independent non executive) – Lim See Yong (non executive ) Lim See Yong (non executive ) Executives – Martin Jacobsen (COO) – Greg Harding (CFO) Issued shares 247.3m – Myles Fang (iron ore marketing) – Larissa Brown (company secretary) Unlisted options, share Unlisted options, share 23.6m 23.6m rights and Deutsche Bank (of which 5.1m are in- Cash: $81m (30 March 2011) warrants the-money) Fully diluted Fully diluted 270.9m 270 9m Substantial shareholders: Substantial shareholders: – Acorn Capital 6.7% Market cap (undiluted) $180m – Bob Duffin 5.9% Fully diluted $197m Partially diluted Partially diluted $190m $190m Other institutions hold ~24% SAREIC Presentation 3 May 2011 2
Our Key Project Assets IRON ORE • DSO: Peculiar Knob, Buzzard and Tui Buzzard and Tui deposits • Magnetite BIF: Kestrel and Goshawk, Harrier, d G h k H i Eagle, Kite and Falcon at Hawks Nest • H Haematite BIF: Buzzard tit BIF B d and Tui footwall COAL • Penrhyn, Perfection Well, Pidinga, Lochiel North EXPLORATION • Mt Brady, Windy Valley SAREIC Presentation 3 May 2011 3
Peculiar Knob Status Peculiar Knob Status 3 May 2011 Report Report SAREIC Presentation
Peculiar Knob - Current Status APPROVALS AND PERMITTING • Expect Port Pirie DA approval this quarter • Expect EPBC approval this quarter Expect EPBC approval this quarter • Expect MARP approval in July FUNDING FUNDING • $85m equity raised Nov/Dec 2010 • Deutsche Bank US$120m facility financing documents to be signed late May CONSTRUCTION AND PRODUCTION • Expect site access to be available in July • Expect production at 3.3 mtpa to commence late 2011 with sales in Q2 2012 INVESTMENT ARITHMETIC • Capex $139m plus W/C $29m • Cash opex $66/t to FOB plus $6/t royalties • Mine operating surplus ~$250m pa at current prices for 6 years (stand-alone) Mine operating surplus $250m pa at current prices for 6 years (stand alone) SAREIC Presentation 3 May 2011 5
Mineral Resource Estimates Peculiar Knob Peculiar Knob Category Million Fe P SiO 2 Al 2 O 3 LOl Tonnes % % % % % Measured resource 13.6 64.0 0.01 7.11 0.27 0.4 Indicated resource 4.1 63.8 0.02 7.69 0.20 0.4 Inferred resource Inferred resource 1 5 1.5 64 6 64.6 0 03 0.03 6 15 6.15 0.20 0 20 0.2 0 2 Total resource 19.2 64.0 0.01 7.16 0.25 0.4 Sulphur: 0.009%; Cu, Pb, Zn, Ni, Cr; V, Cl, Ba, As, Zr, Sr, etc: at or below detection limit To WPG’s knowledge Peculiar Knob is Australia’s highest grade undeveloped Fe deposit To WPG s knowledge, Peculiar Knob is Australia s highest grade undeveloped Fe deposit SAREIC Presentation 3 May 2011 6
Port Pirie • Controlling our own port is a key plank of C t lli t i k l k f our strategy – now and into the future • We will use a transshipment operation similar to that at Whyalla i il t th t t Wh ll • But we will use a small ship, not tugs and barges • First anchorage 11 nm offshore, top up further out • Capacity 7 mtpa => commercial opportunity p y p pp y for unused capacity SAREIC Presentation 3 May 2011 7
Hawks Nest Iron Ore 3 May 2011 SAREIC Presentation
The Hawks Nest Iron Ore Project • Hawks Nest lies in the old “Core Area of Operations” of the WTF • Defence uses the WTF regularly but most activities are in SE corner but most activities are in SE corner • Government Review Nov 2010 recommends opening up of most of WTF f WTF for mining (“Hawke Report”) i i (“H k R t”) • Final Review lodged but not yet released publicly – expected H1 p y p 2011 – WPG expects favourable outcome shortly • • WPG is confident that mining will WPG is confident that mining will be allowed in all but the “Red Zone” of the WTF which is in the extreme SE SE corner SAREIC Presentation 3 May 2011 9
Mineral Resource Estimates Totals – DSO Deposits (Peculiar Knob, Buzzard, Tui) (Peculiar Knob, Buzzard, Tui) Category Million Fe P SiO 2 Al 2 O 3 LOl Tonnes % % % % % Measured resource 25.7 63.1 0.03 7.6 0.8 0.7 Indicated resource 9.3 61.8 0.05 9.2 0.8 0.8 Inferred resource 2.6 63.1 0.05 7.9 0.5 0.4 Total resource Total resource 37.6 37.6 62.8 62.8 0.04 0.04 8.0 8.0 0.8 0.8 0.7 0.7 NB: Addition of Buzzard and Tui will double the DSO tonnage available relative to Peculiar Knob on a stand-alone basis P li K b t d l b i SAREIC Presentation 3 May 2011 10
Mineral Resource Estimates Magnetite Deposits Magnetite Deposits Category Million Fe P SiO 2 Al 2 O 3 LOl Tonnes % % % % % • Kestrel • Kestrel Measured resource 100 37 0.06 37 0.8 0.6 Indicated resource 60 36 0.06 38 1.0 0.8 Inferred resource 60 36 0.06 39 1.1 0.8 T t l Total resource 220 220 36 36 0 06 0.06 38 38 0 9 0.9 0 7 0.7 Category Million Fe P SiO 2 Al 2 O 3 LOl Tonnes % % % % % • All magnetite • All magnetite Kestrel – measured, Kestrel measured, 220 220 36 36 0.06 0.06 38 38 0.9 0.9 0.7 0.7 indicated and inferred Goshawk - inferred 148 35 - - - - resource Clear potential Cl t ti l Harrier - inferred 54 35 - - - - to increase total resource resource to >1 Eagle - inferred 92 31 - - - - resource billion tonnes billion tonnes Kite - inferred 30 51 - - - - with further resource drilling Falcon - inferred 25 32 - - - - resource Total resource 569 36 - - - - SAREIC Presentation 3 May 2011 11
The WISCO Magnetite Deal – Key Elements g y • WISCO will sole fund first $45m to earn a 50% JV interest in the Hawks Nest tenement (excluding DSO) Nest tenement (excluding DSO) • WISCO cannot withdraw until it has spent $25m and if it does then its interest will be 28% interest will be 28% • Money will be spent on BFS/exploration/development • WPG’s interest cannot fall below 50% and WISCO’s cannot be >50% • WPG will be manager of the JV (BFS and production stages) • WISCO to have right to purchase part of WPG’s share of cons • WISCO will assist WPG with capex and Port Bonython development • Deal fully executed, has NDRC approval and meets FIRB guidelines but Defence won’t yet support it b t D f ’t t t it • Will commence when Commonwealth endorses Hawke Report recommendations which is expected soon recommendations which is expected soon SAREIC Presentation 3 May 2011 12
Exploration Targets, Hawks Nest BIF EL 4248 MC 3809 and MC 3810 EL 4248, MC 3809 and MC 3810 Mineralisation Category Exploration Target Tonnage Range Million Tonnes Tonnage Range Million Tonnes Fe Grade Range Fe Grade Range % Magnetite BIF 790 – 890 32 – 37 Haematite BIF 1,400 – 1,680 22 – 43 Total 2,190 – 2,570 22 – 43 SAREIC Presentation 3 May 2011
3 May 2011 Coal Projects SAREIC Presentation
Penrhyn Coal Project Permian semi-bituminous coal in the Arckaringa Basin 40 km SW of Coober Pedy and 20 km from Pec liar Knob ha l road and rail loader Peculiar Knob haul road and rail loader Coal Category Exploration Target Tonnage Range (mt) Tonnage Range (mt) Sub-Bituminous Coal 200 – 300 • Penrhyn is similar in quality and size potential to Lake Phillipson coalfield held by WEC • WPG is mid way through a drilling program WPG is mid way through a drilling program aimed at outlining 200 mt Inferred Coal Resource – results to date are encouraging • WPG sees Penrhyn as domestic power station coal or export coal after upgrading using clean coal technology SAREIC Presentation 3 May 2011 15
Lochiel North Coal Project Lignite in the St Vincent basin 80 km south of Port Pirie and alongside railway line Coal Category Tonnage (mt) Inferred coal resource 270 • Lochiel North (aka Snowtown) is similar to the Lochiel and Bowmans coal (lignite) deposits deposits • Explored by ETSA in the 1980s as a potential replacement for Leigh Creek • WPG sees Lochiel North as domestic power station coal or export coal after t ti l t l ft upgrading using clean coal technology SAREIC Presentation 3 May 2011 16
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