Western Plains Resources is a company with great potential...

Western Plains Resources is a company with great potential upside compared to its current market capitalisation. The company has a clear path to the generation of substantial cash flows, commencing in the second half of 2011 with the development of their Peculiar Knob DSO Iron Ore Project. This project is one of the highest grade, lowest impurity deposits left in the country and should be able to attract premium prices for the iron ore it produces. A couple of broker reviews have valuations around $1.80-$1.90 for the company based almost solely on Peculiar Knob. However, the potential for further growth is outstanding with a similar sized DSO deposit at a similar grade located at Hawkes Nest. This could be the next project which gets the go ahead for development. Add to that the potential for a large Magnetite and Hematite operation, which is the subject of a $45m JV with Wisco (Hawkes Nest excluding Buzzard DSO), combined with the potential to develop a substantial clean coal business at the Penrhyn Coal Project and the potential for multiple upside becomes clear. The company will be conducting a roadshow this week in New Zealand and on the East coast of Australia. I anticipate that the story will be well received by brokers and investors which should translate into on market buying so it should be worth watchin WPG this week. News Due: Commitment to develop the Peculiar Knob DSO iron ore project in South Australia. Price Target: With the company conducting a roadshow this week I expect some strong buying to emerge. Based on a measured move I have a target of between $1.05-1.10 for WPG in coming weeks. Disclosure: Holding WPG