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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) – Myles Fang (iron ore marketing) – Larissa Brown (company secretary)

Issued shares 247.3m Unlisted options, share 23.6m Cash: $81m (30 March 2011) Substantial shareholders: Unlisted options, share rights and Deutsche Bank warrants 23.6m (of which 5.1m are in- the-money) Fully diluted 270 9m Substantial shareholders: – Acorn Capital 6.7% – Bob Duffin 5.9% Fully diluted 270.9m Market cap (undiluted) Fully diluted Partially diluted $180m $197m $190m

SAREIC Presentation 3 May 2011

Other institutions hold ~24% Partially diluted $190m

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Our Key Project Assets

IRON ORE

• DSO: Peculiar Knob,

Buzzard and Tui Buzzard and Tui deposits

• Magnetite BIF: Kestrel

d G h k H i and Goshawk, Harrier, Eagle, Kite and Falcon at Hawks Nest H tit BIF B d

• Haematite BIF: Buzzard

and Tui footwall COAL

• Penrhyn, Perfection

Well, Pidinga, Lochiel North EXPLORATION

• Mt Brady, Windy Valley

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Peculiar Knob Status Peculiar Knob Status Report Report

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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)

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Mine operating surplus $250m pa at current prices for 6 years (stand alone)

Mineral Resource Estimates Peculiar Knob Peculiar Knob

Category Million Tonnes Fe % P % SiO2 % Al2O3 % LOl % 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 1 5 64 6 0 03 6 15 0 20 0 2 Inferred resource 1.5 64.6 0.03 6.15 0.20 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 SAREIC Presentation 3 May 2011

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To WPG s knowledge, Peculiar Knob is Australia s highest grade undeveloped Fe deposit

Port Pirie

C t lli t i k l k f

• Controlling our own port is a key plank of
• ur strategy – now and into the future
• We will use a transshipment operation

i il t th t t Wh ll similar to that at Whyalla

• 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

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Hawks Nest Iron Ore

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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 i i (“H k R t”) WTF for mining (“Hawke Report”)

• Final Review lodged but not yet

released publicly – expected H1 p y p 2011 – WPG expects favourable

• utcome shortly
• WPG is confident that mining will
• WPG is confident that mining will

be allowed in all but the “Red Zone”

• f the WTF which is in the extreme

SE

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SE corner

Mineral Resource Estimates Totals – DSO Deposits

(Peculiar Knob, Buzzard, Tui) (Peculiar Knob, Buzzard, Tui)

Category Million Tonnes Fe % P % SiO2 % Al2O3 % LOl % 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 37.6 62.8 0.04 8.0 0.8 0.7 Total resource 37.6 62.8 0.04 8.0 0.8 0.7

NB: Addition of Buzzard and Tui will double the DSO tonnage available relative to P li K b t d l b i SAREIC Presentation 3 May 2011

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Peculiar Knob on a stand-alone basis

Mineral Resource Estimates Magnetite Deposits Magnetite Deposits

• Kestrel

Category Million Tonnes Fe % P % SiO2 % Al2O3 % LOl %

• 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 220 36 0 06 38 0 9 0 7

• All magnetite

Total resource 220 36 0.06 38 0.9 0.7 Category Million Tonnes Fe % P % SiO2 % Al2O3 % LOl % Kestrel – measured, 220 36 0.06 38 0.9 0.7

• All magnetite

Kestrel measured, indicated and inferred 220 36 0.06 38 0.9 0.7 Goshawk - inferred resource 148 35

• Cl

t ti l

Harrier - inferred resource 54 35

• Eagle - inferred

resource 92 31

• Clear potential

to increase total resource to >1 billion tonnes

Kite - inferred resource 30 51

• Falcon - inferred

resource 25 32

• billion tonnes

with further drilling SAREIC Presentation 3 May 2011

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Total resource 569 36

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

b t D f ’t t t it but Defence won’t yet support it

• Will commence when Commonwealth endorses Hawke Report

recommendations which is expected soon

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recommendations which is expected soon

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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 Fe Grade Range Tonnage Range Million Tonnes Fe Grade Range % Magnetite BIF 790 – 890 32 – 37 Haematite BIF 1,400 – 1,680 22 – 43 Total 2,190 – 2,570 22 – 43

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Coal Projects

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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

Coal Category Exploration Target Tonnage Range (mt)

Peculiar Knob haul road and rail loader

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

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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

t ti l t l ft power station coal or export coal after upgrading using clean coal technology

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WPG – Evergreen Energy Coal JV

Evergreen Energy Inc has developed the K-Process, a clean coal upgrading technology that upgrades lo al e s b bit mino s coals and lignite to higher low value sub-bituminous coals and lignite to higher rank thermal coal quality. K-Fuel is a new generation of energy processes that can significantly reduce air emissions and other g y pollutants from coal-burning power plants. Key Points of JV:

• 50/50JV in which WPG contributes coal

tenements in SA and Evergreen the technology and know-how technology and know how

• JV has the exclusive right to use the K-

Process for the first 15 mtpa upgraded coal produced anywhere in Australia (not just f WPG’ t t ) d i ht t from WPG’s tenements) and right to participate in any other Australian production

• WPG will send coal core samples from

Penrhyn and Lochiel to Evergreen for

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y g testwork in the next 2 months

Pig Iron

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Pig Iron

Pig iron is an intermediate value added product that sits between iron ore and pellets on the one hand, and steel on the other hand and steel on the other hand. Pig Iron:

• Was the ultimate production objective of the
• ld SASE project that was based on iron ore

from Peculiar Knob and Hawks Nest and coal from Lake Phillipson

• Can be produced by many processes,

including a blast furnace, Ausmelt process (A i ) K b IT Mk 3 t t (Ausiron), Kobe IT Mk-3, etc etc

• Can be used as feedstock for electric arc

furnace

• Cheap Chinese modular blast furnaces can

p now be bought “off the shelf”

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What If?

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What’s the Potential if We Achieve This?

Annual Tonnage

• Peculiar Knob is low risk starter

project capable of underpinning WPG’s pipeline of other projects

Annual Tonnage

m i

WPG s pipeline of other projects

• There is no exploration risk in the

projects – all have JORC compliant

l l i

• n

t

• n

p j p resources

• Export tonnages can leverage off PK

n n e s

infrastructure – particularly Port Pirie; they don’t rely on Port Bonython though it would help

Annual Revenue

though it would help

• Will may need a new DA to export

these tonnages from Pirie

$ m i l l i

• n
• Price assumptions: DSO fines,

magnetite cons US$180/t; clean coal US$120/t; pig iron US$480/t

n s

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US$120/t; pig iron US$480/t

Finally - The Finally The Takeaway Takeaway

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WPG Resources – More than a One Trick Pony! One Trick Pony!

• Peculiar Knob is fully funded and virtually fully

permitted – sales in 2012 pe tted sa es

• PK cashflow and infrastructure will underpin WPG’s

pipeline of other projects – Port Pirie facility a key plank Strong cashflo > strong di idend potential

• Strong cashflow => strong dividend potential
• Hawks Nest DSO and WISCO JV just require

Commonwealth approval following Hawke Review – imminent

• Clean coal JV development strategy will leverage off

Evergreen Energy process and does not just on g gy p j Penrhyn and Lochiel North

• Pig iron production will move WPG down value-added

path path

• No present intention to call on shareholders to fund

these projects – funded from retained earnings or by JV partners

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partners

Competent Persons p

• The review of exploration activities and results and the mineral resource estimates for the Peculiar Knob, Buzzard and Tui DSO

deposits, and the non-Kestrel magnetite deposits at Hawks Nest contained in this presentation are based on information compiled by Mr Gary Jones, a Member 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. He has sufficient experience which is relevant to the style of mineralisation and 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 presentation of the matters based on his information in the form and context in which it appears.

• Th

i l ti t f th K t l tit d it t H k N t t i d i thi t ti i b d i f ti

• The mineral resource estimate for the Kestrel magnetite deposit at Hawks Nest contained in this presentation 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 p g p ( ) Heyden has consented in writing to the inclusion in this presentation of the matters based on his information in the form and context in which it appears.

• The review of exploration activities and results for the Penrhyn and Lochiel North coal deposits and the coal resource estimates

contained in this presentation are based on information compiled by Mr Gary Jones, a Member 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 He has and Metallurgy. He is Technical Director of WPG 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 presentation of the matters based on his information in the form and context in which it appears.

• The exploration targets in this presentation are based on the currently available drill hole data and are conceptual in nature. There has

been insufficient exploration to define a mineral resource, and it is uncertain if further exploration will result in the determination of a mineral resource

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