ASX ANNOUNCEMENTRAIL TRANSPORT OPTIONFollowing the recent...

ASX ANNOUNCEMENT
RAIL TRANSPORT OPTION
Following the recent announcement by WestNet Rail that it was proceeding to investigate expansion of its track network in the mid west region of WA, Ferrowest has met with WestNet representatives to determine if there will be an opportunity for the Yalgoo Iron Project to utilise the expanded network.
The planning for the Yalgoo Iron Project currently envisages road transport for the proposed project output of 500,000tpa of merchant pig iron. This relatively small tonnage does not, on its own, warrant re-instating the rail line from Mullewa to the project, a distance of approximately 133km. No other proposals for additional rail in the mid west come within an economic distance of the project.
However, under the WestNet Rail proposal it is planned to consider re-instating the rail line that runs through the project tenements in order to service the Golden West Resources Project at Wiluna. The Company and WestNet Rail will investigate the feasibility of using this line to transport the merchant pig iron to the Port of Geraldton. Under this scenario, a 7km spur line would be constructed off the main line into the proposed plant site.
Ferrowest would need to contribute to the overall capital cost of new rail (probably through operating charges) and would therefore not expect any significant reduction in overall transport costs on the 500,000tpa of MPI currently planned but, if successful, it would have the following benefits for the Company:
• while the proposed road transport is minimal, it will lessen the number of truck movements;
• coal transportation to site will not require double handling (currently both road and rail transport); and
• any future expansion in output will result in transport savings.
The possibility of a new line through Mt Magnet and Sandstone to Wiluna being economic is largely governed by other projects that are proposing to move larger quantities of material but the Company is pleased to participate in determining an overall solution provided that the proposed rail can offer equal or lower total transport costs.
If the proposed rail line does not proceed, the Company will simply continue with its proposed road transport.
The Company looks forward to further discussions with WestNet Rail as it advances the studies for the Yalgoo Iron Project.


Yet another step forward for FWL. I hope now the dt's are gone from this stock that we can share in the sustained long term future of this company.

PS - FWL is presenting at AMEC on 25/8/7 in Perth.