WPG Resources Ltd Chairman’s Presentation November 2012
Key Corporate Information Directors: – Bob Duffin (Executive Chairman) – Heath Roberts (Executive) – Gary Jones (Executive) – Len Dean (Independent Non Executive) – Dennis Mutton (Independent Non Executive) – Lim See Yong (Independent Non Executive ) Executives – Martin Jacobsen (Chief Executive) – Greg Harding (CFO) – Myles Fang (Iron Ore Marketing) – Larissa Brown (Company Secretary) – Wayne Rossiter (GM Coal) Issued shares 260.9m Unlisted share rights 3.5m Cash: $14.7m (30 September 2012) (vest in July 2015 if certain conditions met) Substantial shareholders: – Bob Duffin 9.3% Fully diluted 264.4m – Jalinsons Pty Ltd 8.6% Market cap (@ $0.073) $19m Chairman’s Presentation November 2012 2
To Recap: Sale of Iron Ore Assets in 2011 WPG sold its iron ore assets (Peculiar Knob and Hawks Nest and exploration tenements) to OneSteel (now Arrium) for ~$320 million in October 2011 Net earnings of $171 million for FY 2011 Paid fully franked dividend of $0.63/share and return of capital of $0.42 per share (total $1.05 per share) in November 2011 WPG has raised total of $129 million from shareholders since incorporation in 2004, and has paid back more than twice this amount WPG shareholders retained their WPG shares post sale We did not sell our other project assets nor our Port Pirie land with its development approval Peculiar Knob mine in production November 2012 WPG has delivered outstanding investment return to shareholders, and remains committed to this objective going forward Chairman’s Presentation November 2012 3
Our Key Project Assets IRON ORE • Giffen Well COAL • Penrhyn, Perfection Well, Lochiel North EXPLORATION • Lake Woorong, Mirikata, Muckanippie PORT PIRIE • Large industrial land holding (freehold), Development Approval, valid leases over third party land Chairman’s Presentation November 2012 4
Giffen Well Iron Ore Project • WPG’s subsidiary Giffen Iron Pty Ltd farmed into Giffen Well this year • GIPL will complete a $3m PFS in March 2013 • GIPL’s interest will be 25% after PFS by paying $5m to vendor if WPG decides to go forward, and will earn an additional 20% for each $5m spent to maximum of 82% • If a decision to develop a mine is taken GIPL will pay a further $10m to the vendor, at which time vendor has the right to decide whether to retain its equity interest in the project or exchange it for a royalty of $0.70/t of ore mined Chairman’s Presentation November 2012 5
Giffen Well Geology • Three simple lenticular lodes or zones of BIF • Main Zone is ~4 km long by 350m wide in the centre and open at depth • Dips steeply to east • Thin oxidised zone (may be Eromanga Basin sediments in part) • Fe grades are consistent within each zone • Resource estimates used data from 42 drill holes totalling 3,949 metres • Cut off grade of 15% Fe Chairman’s Presentation November 2012 6
Giffen Well Resource Estimate Category Million Tonnes Fe% SiO 2 % P% Al 2 O 3 % S% Oxide Indicated 65.8 33.0 33.6 0.04 2.5 0.05 Inferred 41.4 34.5 35.4 2.7 0.03 0.04 Total 107.2 33.6 34.3 0.04 2.5 0.04 BIF Indicated 361.9 31.6 38.4 1.7 0.64 0.07 Inferred 220.0 30.0 41.4 0.07 2.0 0.55 Total 581.9 31.0 39.5 0.07 1.8 0.61 Total Resource Estimate Indicated 427.7 31.8 37.6 0.06 1.8 0.54 Inferred 261.4 30.7 40.4 0.07 2.1 0.47 Total 689.1 31.4 38.7 1.9 0.52 0.07 Chairman’s Presentation November 2012 7
Giffen Well Metallurgical Characteristics • Davis Tube Recovery testwork done on chips and Magnetite % core from WPG’s drilling Concentrate program • 5m composite samples Fe 68.5 prepared following grinding to P 80 of 25 microns SiO 2 3.87 • Primary ore in Main Zone Al 2 O 3 0.20 gave average concentrate grade of 68.5% Fe with mass pull to concentrate of P 0.008 42% using a 15% Fe mass recovery cut off grade S 0.061 • Metallurgical testwork on oxide material is continuing NB: Primary material in Main Zone only Chairman’s Presentation November 2012 8
Development Concept • Rail spur (22km) and loading loop from Central Australian Rail Line • Power for plant and site services to be obtained from mine mouth power station at Penrhyn coal mine • Accommodation villages at Giffen Well and Penrhyn • Water from dewatering Penrhyn pit • Rail haulage to Port Pirie • Transhipment to Capesize ships in deep water in Upper Spencer Gulf Chairman’s Presentation November 2012 9
Giffen Well Mine • Main lode will be mined at ~13mtpa ore to produce 5mtpa of high grade Fe concentrate • LOM to be ~30 years on current resource estimates • Treatment plant to be of conventional design • Waste and tailings storage to be integrated • Water from Penrhyn pit • Power from mine mouth power station at Penrhyn • Rail haulage to Port Pirie • Other lodes and oxide zones in all 3 lodes are upside potential Chairman’s Presentation November 2012 10
Penrhyn Mine and Power Station 3X25MW • Penrhyn resource total unit coal 352.4 mt thermal coal fired • Open pit mine to be power station in developed to produce China ~400,000 tpa ROM coal • ~85 MW mine mouth power station to be located near starter pit with lowest strip ratio and fed with ROM coal • Pit will be dewatered and water fed to RO plant • High tension power line and water pipeline to link Penrhyn and Giffen Well (105 km) Chairman’s Presentation November 2012 11
Port Pirie • Publicly accessible port operated by Flinders Ports Pty Ltd who manage shipping, maintain port, channel, wharfs etc • We own ~5 ha parcel of freehold land suitable for construction of rail unloading, storage and shipping facilities • We have 30 year agreement with Flinders Ports for access and pricing • We continue to pay lease rentals on other land in Port Pirie • We have development approval (renewal in progress) for 3.5mtpa iron ore but facilities can handle 7mtpa Chairman’s Presentation November 2012 12
Giffen Well – Points of Differentiation WHAT MAKES A GOOD MAGNETITE PROJECT? Giffen Well High head grade High tonnage Low strip ratio Manageable development scale Good metallurgical characteristics – ore and concentrate Access to transport infrastructure Adequate power and water at affordable cost Long life project No reliance on other parties to develop shared infrastructure Affordable capex ? Competitive opex ? Management with track record and commitment to shareholder value Chairman’s Presentation November 2012 13
Competent Person The information in this presentation that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information complied by Mr Gary Jones, a Fellow of the Australasian Institute of Mining and Metallurgy. He is Technical Director of WPG Resources Limited and a full time employee of Geonz Associates Limited. The information is extracted from the following reports: For the Penrhyn coal project: Maiden 352.4 million tonne coal resource estimate for Penrhyn deposit . WPG’s ASX announcement of 7 July 2011 For the Giffen Well iron ore project: Maiden resource estimate makes Giffen Well one of the highest grade BIF iron ore deposits in Australia. 689 million tonnes at average grade 30.9% Fe. WPG’s ASX announcement of 4 October 2012 In addition, the metallurgical testwork reported herein is based on the following reports: Encouraging metallurgical testwork raises WPG’s sights towards iron ore mine development at Giffen Well. WPG’s ASX announcement of 29 October 2012 WPG is not aware of any new information or data that materially affects the information included in the relevant market announcements set out above and, in the case of estimates of Mineral Resources or Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed. Chairman’s Presentation November 2012 14
Important Notice This presentation contains forward looking statements concerning the projects owned by WPG. Statements concerning mineral resources and ore reserves may also be deemed to be forward looking statements in that they involve elements based on specific assumptions Forward looking statements are not statements of historical fact, and actual events or results may differ materially from those described in the forward looking statements as a result of a variety of risks, uncertainties and other factors. Forward looking statements are based on WPG’s beliefs, opinions and estimates as of the date they are made and no obligation is assumed to update forward looking statements if these beliefs, opinions and estimates should change or reflect other future developments Data and amounts shown in this presentation relating to capital costs, operating costs and project timelines are based on consultant reports, contractor quotes and internally generated estimates WPG cannot guarantee the accuracy and/or completeness of the figures or data in this presentation All dollar amounts indicated in this presentation are in Australian dollars unless otherwise stated. Chairman’s Presentation November 2012 15
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