Coober Pedy Coober Pedy Iron Ore Projects Iron Ore Projects ...or - - PowerPoint PPT Presentation

Western Plains Resources Ltd

Coober Pedy Coober Pedy Iron Ore Projects Iron Ore Projects

...or ...or… … Ironman Ironman chases PB to provide chases PB to provide safe safe harbour harbour for port developers for port developers Bob Duffin, Executive Chairman Bob Duffin, Executive Chairman SAREIC Conference,1 May 2008 SAREIC Conference,1 May 2008

April 29, 2008 2

Western Plains Resources 2 SAREIC Presentation 1 May 2008

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.

April 29, 2008 3

Western Plains Resources 3 SAREIC Presentation 1 May 2008

Key Corporate Information

Directors:

– Bob Duffin (executive chairman) – Heath Roberts (executive) – Gary Jones (executive) – Bob Richardson (non executive) – Len Dean (non executive) – Dennis Mutton (non executive) – Lim See Yong (non executive)

Executives

– Martin Jacobsen (COO) – Greg Harding (CFO) – Myles Fang (Business Development - China) – Larissa Brown

Cash:$7.1m (28 April) Directors control 26m voting shares plus options Good core group of top 50 shareholders

Issued shares 79.6m Unlisted options 13.3m Fully diluted 92.9m Market capitalisation $88m (at $0.95/share)

April 29, 2008 4

Western Plains Resources 4 SAREIC Presentation 1 May 2008

Our Iron Ore Projects

• DSO: Peculiar Knob RL 103 and

Buzzard and Tui (MC 3810) deposits at Hawks Nest

• Magnetite: Kestrel (MC 3809) and

Goshawk, Harrier, Eagle, Kite and Falcon (EL 3196) at Hawks Nest

• Peculiar Knob tenement is 90 km S of

Coober Pedy, 30 km E of the Stuart Highway, 15 km NW of Oxiana’s Prominent Hill mine and 85 km E of the Adelaide-Darwin railway line

• Hawks Nest tenement EL 3196 (within

which MCs 3809 and 3810 lie) is 115 km SSE of Coober Pedy, straddles Stuart Highway and is 45 km east of the railway line

• It is approximately 580 kilometres by

rail from Gina siding to Whyalla, Port Bonython or Port Pirie and 2,150 kilometres to Darwin

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April 29, 2008 5

Western Plains Resources 5 SAREIC Presentation 1 May 2008

Site Map

5

April 29, 2008 6

Western Plains Resources 6 SAREIC Presentation 1 May 2008

Game Plan

• Bring PK DSO into production ASAP at 3 mtpa – could be in 2009
• Bring Buzzard/Tui DSO into production 12 months later at 1.5 mtpa

so that total DSO sales increase to 4.5 mtpa for 10 year DSO project life

• Continue exploration to expand DSO resource/reserves and extend

life

• Conduct BFS on magnetite deposits with a view to commencing

magnetite concentrate exports at a minimum of at least 6 mtpa from 2012 for >30 year project life

• Develop potential for downstream value add processing of

magnetite – pellets, DRI, pig iron etc

• Understand new type of deposits discovered by recent drilling

program – non shipping grade haematite BIF (“BFO” – 35 to 45% Fe) and how to upgrade it to prepare a marketable product

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April 29, 2008 7

Western Plains Resources 7 SAREIC Presentation 1 May 2008

Status of Approvals

• NTMA signed and registered
• PK MLA lodged May 2007 (in draft – final August 2007 after

feedback) and ML offer expected in May 2008

• PK BFS completed Sept 2007 and project capex banked
• MPLs surveyed and ready to be lodged when lease

conditions known; MARP in final stages of preparation

• Negotiations with pastoral lease holders, EL holders,

contractors have gone as far as possible until all conditions known and other approvals are in place

• Department of Defence approval to operate inside Woomera

Prohibited Area still pending

• EOI for development of iron ore export facility at Port

Bonython expected to be advertised on 5 May 2008

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April 29, 2008 8

Western Plains Resources 8 SAREIC Presentation 1 May 2008

Mineral Resource Estimates DSO Deposits

• Peculiar Knob
• Buzzard
• Total

Category Million Tonnes Fe % P % SiO2 % Al2 O3 % LOl % Measured resource 13.4 63.7 0.01 7.4 0.3 0.5 Indicated resource 4.1 63.4 0.02 8.2 0.2 0.4 Inferred resource 1.5 64.5 0.02 6.0 0.3 0.3 Total resource 19.0 63.7 0.02 7.5 0.3 0.5 Category Million Tonnes Fe % P % SiO2 % Al2 O3 % LOl % Measured resource 12.1 62.1 0.05 8.1 1.4 0.9 Indicated resource 1.5 60.3 0.06 7.9 2.6 1.8 Inferred resource 0.5 62.3 0.07 8.5 1.1 0.8 Total resource 14.1 62.0 0.05 8.1 1.6 1.0

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Category Million Tonnes Fe % P % SiO2 % Al2 O3 % LOl % Measured resource 25.5 62.9 0.03 7.7 0.8 0.7 Indicated resource 5.6 62.6 0.03 8.1 0.8 0.7 Inferred resource 2.0 64.0 0.03 6.6 0.5 0.4 Total resource 33.1 62.9 0.03 7.7 0.8 0.7

April 29, 2008 9

Western Plains Resources 9 SAREIC Presentation 1 May 2008

Peculiar Knob DSO

9

• BFS completed September

2007

• Simple specular haematite

deposit; high grade Fe with virtually no impurities

• Very sharp break between ore

and wall rocks

• Lies beneath 15-30 m cover
• Effectively all resource reports

to reserves

• LOM W:O strip ratio 3.6:1
• Lump: fines - 35%:65%

April 29, 2008 10

Western Plains Resources 10 SAREIC Presentation 1 May 2008

Buzzard DSO

• Generally similar to

Peculiar Knob though marginally lower Fe and marginally higher SiO2

• Cover about 35m
• Metallurgical testwork

and mine design commenced April 2008

• Buzzard is seen as a

satellite pit to main Peculiar Knob operation

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April 29, 2008 11

Western Plains Resources 11 SAREIC Presentation 1 May 2008

DSO Economics

• PK BFS completed

September 2007 – cost estimates updated for Port Bonython April 2008

• Export 3 mtpa growing to

4.5 mtpa after 1 year

• Capex <US$30/annual

tonne

• Opex near mid point of cost

curve for greenfield projects

• Cash operating margin

>$50/t at benchmark price

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Capex (A$m) FOB Opex (A$/t DSO) Mine site 39.0 17.90 Siding/Logistics 16.4 23.10 Port 53.4 3.00 Royalties 3.90 Totals 108.8 47.90

April 29, 2008 12

Western Plains Resources 12 SAREIC Presentation 1 May 2008

DSO Funding

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• Xin Sheng International Private Limited (Singapore

company with Chinese connections) agreed to provide $115m funding for project development as mix of equity, debt and convertible note

• Xin Sheng to take 90% of PK DSO at benchmark price

(plus 7% for first 2 years) and all of Hawks Nest DSO less 10% on amounts in excess of 1.5 mtpa

• Xin Sheng has sought to renegotiate deal in light of

Whyalla port access issue

• WPG will be able to sell remainder on spot market (well

above benchmark, even after 2008/9 65% price rise) or to

• ther long term customers
• WPG has entered into non binding MOUs with 3 Chinese

steel mills plus Korean trader to place uncommitted tonnages on favourable pricing terms

April 29, 2008 13

Western Plains Resources 13 SAREIC Presentation 1 May 2008

Mineral Resource Estimates Magnetite Deposits

• Kestrel
• All magnetite

Category Million Tonnes Fe % P % SiO2 % Al2 O3 % LOl % 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 Total resource 220 36 0.06 38 0.9 0.7 Category Million Tonnes Fe % P % SiO2 % Al2 O3 % LOl % Kestrel – measured, indicated and inferred 220 36 0.06 38 0.9 0.7 Goshawk - inferred resource 148 35

• Harrier - inferred

resource 54 35

• Eagle - inferred

resource 92 31

• Kite - inferred

resource 30 51

• Falcon - inferred

resource 25 32

• Total resource

570 36

• 13

April 29, 2008 14

Western Plains Resources 14 SAREIC Presentation 1 May 2008

Hawks Nest Aeromagnetics

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April 29, 2008 15

Western Plains Resources 15 SAREIC Presentation 1 May 2008

Kestrel Magnetite

• Kestrel is a BIF that outcrops at

Hawks Nest

• Drilled to 135m depth over strike

length of 1,200m with lines 100m apart

• Total resource 220 mt at 36% Fe
• Excellent metallurgical

characteristics – 45% mass recover to concentrate without fine grinding nor flotation

• Scoping study to produce 6 mtpa

magnetite concentrate completed April 2008

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April 29, 2008 16

Western Plains Resources 16 SAREIC Presentation 1 May 2008

Other Magnetite Deposits

• DTR to concentrate varies from 35.8% at

Falcon to 55.2% at Kite

• These are very encouraging results (better

than most WA BIFs) because ROM tonnage and plant size would be smaller for given tonnage of concentrate

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Deposit Hole Intercept Davis Tube Recovery Number (m) %Mass %Fe %P %SiO2 %Al2O3 Kestrel

HKN065

54 45.4 65.2 0.00 8.71 0.11 Kestrel

HKN077

60 44.9 65.3 0.01 8.52 0.07 Goshawk

HKN081

62 48.6 65.3 0.01 7.97 0.15 Harrier

HKN088

72 47.2 66.5 0.01 7.52 0.16 Eagle

HKN100

92 41.2 67.5 0.01 6.41 0.10 Kite

HKN092

68 55.2 69.6 0.01 3.24 0.39 Falcon

HKN091

68 35.8 67.1 0.01 6.53 0.40 Davis Tube Concentrate

April 29, 2008 17

Western Plains Resources 17 SAREIC Presentation 1 May 2008

Magnetite Economics

• Initial capex for 13.5

mtpa ROM project to produce 6 mtpa concentrate for 30 years is $720m (benefits from DSO infrastructure)

• Cash opex $51/t conc
• Pellets, pig iron offer

value-add

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April 29, 2008 18

Western Plains Resources 18 SAREIC Presentation 1 May 2008

Magnetite Funding

• BFS estimated to

cost $15-20m

• WPG seeking JV

partner to fund BFS to earn equity interest in magnetite project

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Top: Pellet stockpiles (Port Latta - Savage River) Right: Pig iron nuggets (Messabi)

April 29, 2008 19

Western Plains Resources 19 SAREIC Presentation 1 May 2008

The Importance of Port Bonython

• In spite of recent iron ore price rises,

iron ore is still a low unit-value commodity

• Therefore, minimising unit costs

matters

• So we will be:

using big trucks (500t load) using big trains (7,200t load) and we want to use big ships (160,000t Capesize)

• Transhipment as at Whyalla

increases opex to FOB by 12%

• Shipping through Darwin increases

FOB costs by 50%

• There is no other suitable deepwater

port in SA

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April 29, 2008 20

Western Plains Resources 20 SAREIC Presentation 1 May 2008

The Port Bonython Bulk User Group

• Formed by 4 iron ore miners in

February 2008 as an umbrella

• rganisation to advance case

for development of common user dry bulk export port

• No government funding

requested for port development, just facilitation assistance; private sector will pay for it

• No need to wait for Olympic

Dam expansion decision – iron

• re companies need it now and

projected tonnages suggest development is bankable

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2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 20,000,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 IMX R esources Western Plains R esources C entrex Metals Ironclad Mining

Tonnage projections from 4 companies 28 February 2008

April 29, 2008 21

Western Plains Resources 21 SAREIC Presentation 1 May 2008

Common User Ports Encourage Minerals Exports

• Experience at Geraldton,

Esperance and Darwin suggests availability of facility will create its own demand

• Owners of these ports

committed to development when demand was less than for Port Bonython

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Top: Geraldton Bottom: Esperance

April 29, 2008 22

Western Plains Resources 22 SAREIC Presentation 1 May 2008

Iron Ore Outlook

• Iron ore demand

expected to continue its inexorable growth, but prices may fall as new supply comes on stream

• Asian customers keen to

encourage independent producers

22 Source: ABARE March 2008

April 29, 2008 23

Western Plains Resources 23 SAREIC Presentation 1 May 2008

The China Factor

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The importance of China to the growth in demand for iron ore must not be underestimated

April 29, 2008 24

Western Plains Resources 24 SAREIC Presentation 1 May 2008

Some Perspectives

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The iron ore sector will be a major contributor to the South Australian economy

Sources: Agricultural and mineral products from South Australia at a Glance, 2007. Port tonnages from Flinders Ports website. WPG projections for 2009/10 (DSO only) and 2012/13 (DSO plus magnetite)

April 29, 2008 25

Western Plains Resources 25 SAREIC Presentation 1 May 2008

Competent Persons

The review of exploration activities and results and the mineral resource estimates for the Peculiar Knob and Buzzard deposit contained in this report are based on information compiled by Mr Gary Jones, a Member of the Australasian Institute of Mining and Metallurgy. He is Technical Director of Western Plains Resources Limited and a full time employee of Geonz Associates Limited. He has sufficient experience which is relevant to the style of mineralisation and types of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the December 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). Gary Jones has consented in writing to the inclusion in this report of the matters based on his information in the form and context in which it appears. The mineral resource estimate for the Kestrel deposit contained in this report is based on information compiled by Mr Arnold van der Heyden, a Member of the Australasian Institute of Mining and Metallurgy. He is an employee of Hellman & Schofield Pty Ltd. He has sufficient experience which is relevant to the style of mineralisation and types of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the December 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). Arnold van der Heyden has consented in writing to the inclusion in this report of the matters based on his information in the form and context in which it appears.