http://www.onenewspage.com.au/news/Business/20110504/21954013/WPG...

http://www.onenewspage.com.au/news/Business/20110504/21954013/WPG-Resources-gets-green-light-for-mining-DSO.htm

WPG Resources (ASX: WPG) has reported that the Commonwealth of Australia has approved mining in certain zones of the Woomera Prohibited Area (WPA) in South Australia, allowing exploration at the Hawks Nest project.

The Commonwealth released the final report of its enquiry into mining and military activities in the WPA yesterday and has confirmed that both can coexist in the area.

The WPA will be broken into three zones to be known as the Red, Amber and Green Zones. Mining will be allowed in the Green and Amber Zones but not in the Red Zone.

The adoption of the report?s recommendations will allow for mining to proceed at WPG?s Hawks Nest exploration licence project area, which lies in western part of the Amber Zone.

WPG will shortly lodge applications for mining and associated tenements at Hawks Nest so that the direct shipping iron ore (DSO) deposits there can be brought into production to supplement production from WPG?s flagship Peculiar Knob DSO project, which is in the Green Zone.

This expected to extend the life of the combined mining project to more than 10 years on current reserves.

The new regime should also allow WPG?s Hawks Nest magnetite joint venture with Wugang Australian Resources Pty Ltd (WISCO), a subsidiary of China?s third largest steel mill, to proceed.

WPG expects to implement whatever changes are now required (if any) to the joint venture transaction documents that have already been fully executed by the parties in order for the joint venture to meet the new guidelines.

WPG?s Penrhyn coal project, like Peculiar Knob, lies in the Green Zone. None of WPG?s tenements lie in the Red Zone.

Peculiar Knob has a 19.2 million tonnes at 64.0% Fe DSO haematite deposit resource.

The Amber Zone will be further sub-divided into two sub-zones, with part to the east of the Stuart Highway, and part to the west.

Time sharing will be introduced in the Amber Zone with the Department of Defence having the right to ask miners to evacuate the sites for set periods. This will allow for campaign mining in those zones.

National security concerns will be addressed through agreed access conditions to be negotiated with the Department of Defence and investment decisions in accordance with Foreign Investment Review Board guidelines.

On April 29 WPG signed a rail haulage agreement with Genesee & Wyoming Australia (GWA) for the transport of iron ore from its Peculiar Knob high grade direct shipping iron ore (DSO) project.

WPG anticipate mining will begin next year, with sales to begin at the end of the year and build up to 3.3 million tonnes per annum of high grade fines over several months, as rolling stock becomes available.