WDRAUD $0.30 Roper Bar; on the road to developmentAn important...

WDRAUD $0.30
Roper Bar; on the road to development

An important milestone was reached, in the June 2011 quarter as the company progresses its key Roper Bar iron project in the Northern Territory. The milestone was the lodgement with the Northern Territory government of a �Notice of Intent� to mine and develop the Roper Bar iron deposit.

A �Notice of Intent� is the official notification that the company must give to the Northern Territory government, that it intends to develop an operating mine with associated infrastructure at Roper Bar. The following figure is a schematic of the Roper Bar tenement.






In FAT-MIN-268 we included the same schematic. However, the important change between the two is the yellow region shown above. The yellow region represents the joint ore reserve code (JORC) resource for the deposit which currently stands at 311.8 million tonnes of ore showing 39.9% iron. The following table shows the classification of the current classification of the resource (Fe is the symbol for iron, SiO2 silicon dioxide, Al2O3 aluminium oxide).





Included in the JORC resource is a high grade direct shipping ore (DSO) zone of 14.5 million tonnes of ore. The company intends to focus on the high grade DSO region for first production.

Drilling activities in the June quarter focussed on Area F. A programme of 333 metres of core drilling was completed with the purpose of supplying core samples of the mineralisation for metallurgical testing.

Priority activities in the current quarter at Roper Bar will include the continuation of the 20,000 metre drill programme. The programme will aim to define more of the existing mineralised zone with a view to bring a further 200 million tonnes of resource up to JORC standard.

�To date only around one third of the Roper Bar deposit has been JORC compliant classified.�

Concurrent with the drilling at Roper Bar, the company will progress a number of facets of the project. These include preliminary design and engineering work on infrastructure, plant and mine designs.

The company intends to commence activities to secure all other permits and licences that are required in developing Roper Bar into a mining operation.

�First production of DSO ore is expected in 2013.�

Mountain Creek is the company�s other iron project. The following figure shows a schematic of the Mountain Creek tenement (Western Desert is farming-in to a 70% interest in EL25966).




Field activities at Mountain Creek have detected the presences of high grade iron, with a content of 67% iron in permit EL25688. The company intends to follow-up on these findings with exploration drilling and an airborne gravity survey in the coming months. We look forward to these results as these come to hand.

Mapping of permit EL27143 has identified what could be described as a McArthur River type of zinc-lead deposit. We would refer Members to our initiation of coverage of Rox Resources (FAT-MIN-286), where we provide a description of this type of mineralised deposit. This could potentially be a very exciting find. We do however remind Members that exploration is in its infancy and therefore carries a high risk. We will monitor news flows concerning Mountain Creek closely.

Toudinny Creek � Bundara Creek and Larrimah East are the company�s base metals projects located near Larrimah in the Northern Territory. The investigation of an electro magnetic survey of the tenements, shown in the following 3D figure of the results, has identified two high priority targets.




The 3D modelling will enable the company to plan appropriate drilling locations, with two potential holes highlighted by the two iridescent green markers. The aim of the two drill holes will be to test the conductive zones which have the potential to host mineralised ore. We will monitor news flow with interest.

Members will have received an in specie distribution of Thor Mining Plc Chess Depository Interests (CDI) from Western Desert. The ratio of the in specie distribution was one Western Desert share for 4.1734 Thor Mining Plc CDIs. We are not proposing to cover Thor Mining. We will consider it only against the universe of resource stocks listed on the Australian Stock Exchange.

At 30 June 2011, the company had cash on hand of A$14.5 million, and in our view has sufficient funds to carryout the programmes it is proposing to undertake.

Members whose entitlement did not make a marketable parcel will have received a cash payment to the value of $0.02027498 per Thor Mining CDI entitled to from the in specie distribution.




Western Desert Resources is currently testing resistance at the 200 day moving average of 32 cents. A convincing break above this indicator would suggest of an uptrend to emerge. Should this bullish scenario unfold, the expected upside target is towards the April high of 44 cents.





With reference to the weekly chart, the price action is largely contained in a broad consolidation, between support at 27.5 cents and resistance at 49.3 cents. In the near term, a sustained break above the 39 week moving average is required to see upward momentum pick up.

We remind Members that Western Desert is a high risk play on iron ore, as production is not expected to commence until 2013. We do however like this company and can see the potential for long-term growth in its iron ore resources. We continue to recommend Western Desert as a buy for Members without any exposure.