WPG Resources Limited (WPG): The company has recently finalized the equity portion of funding for their Peculiar Knob direct shipping iron ore operation. The project has a resource which is one of the highest grade and lowest impurity deposits in the country. The NPV for the project is around $1.50 per share based on the projected production rate of 3mtpa commencing in late 2011. Further upside should come from the Hawkes Nest DSO project which adds around $1.00 to my valuation. Blue sky projects include the Penrhyn Coal Project and a large Hematite and Magnetite BIF (Banded Iron Formation)iron ore project which are the subject of a $50m JV funded by Wisco. Provided the company delivers on its timeline for the development of the PK deposit, I expect a substantial re-rating to occur this year.
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a stock to own in 2011
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