The story is only...

The story is only beginning:

http://www.internationalresourcejournal.com/resource_in_action/april_11/wpg_resources.html

Advancing its iron ore flagship

They are a straight-talking, honest and expert bunch over at WPG Resources (ASX: WPG), the Sydney-headquartered iron ore miner formerly known as Western Plains Resources that?s on track for production in 2011 and sales in early 2012. In fact, despite accomplishing various feats of progress at the company?s flagship Peculiar Knob direct shipping iron ore (DSO) mine, Hawks Nest DSO and magnetite iron ore deposits and the Penrhyn coal deposit, all south of Coober Pedy, South Australia Executive Chairman Bob Duffin is keen to make sure that we tell it like it is and detail the troughs as well as the peaks.

?We?ve got a reputation as a company and as individuals as being straight shooters,? he says.

With a strong and experienced management team in place, WPG?s reputation for cutting to the chase is not to be underestimated. This is a mining house that tells it like it is?and while its projects, situated in the Woomera Prohibited Area (WPA), are subject to tight environmental and reviews processes, the grades, access to vital infrastructure and potential production volumes far outweigh any temporary delay today.

Updates from Peculiar Knob

Since IRJ last spoke with Duffin in August 2010, there have been numerous key developments made at the company.

?Firstly, we?ve raised $85 million in equity which we completed in December last year. We have a $120 million facility from Deutsche Bank to develop the project, and we?re in the process of awarding contracts for project development,? Duffin says.

?The disappointing thing is that the government has said it?ll take another two months to work through the approvals process. Instead of being able to get into production early?this year with sales in December?we?re still forecasting production this year but sales won?t be until the end of the first quarter next year.?

The project Duffin speaks of is Peculiar Knob?the company?s 100 per cent-owned flagship. Previously, Duffin told us that ?there are plenty of iron ore deposits out there that are capable of delivering 58 per cent iron, but very few are capable of delivering greater than 62 per cent? and Peculiar Knob is one of those few.

It is also fully financed, almost entirely permitted with the final approvals due around July this year, and WPG is aiming at 3.3 million tonnes per annum production. Essentially, everything is in place so that once the approvals are complete the project will be ready to go.

?We?re dealing with these delays, and we have absolutely no doubt that all of the necessary approvals will be granted to us in accordance with the timetable provided by the government itself,? Duffin says.

In November, WPG lodged a formal application for the construction of the shipping infrastructure needed for Peculiar Knob at Port Pirie, including receival, storage and a load-out facility at the port with capacity for up to 7 million tonnes per annum. Duffin says that this is going through the assessment process, and once the government approvals are in place, WPG will be able to move ahead with this development on track too, and as he told us last year, ?port access is the key to turning an iron stone into an iron ore?simple as that.?

Updates from Hawks Nest and Penrhyn

While Peculiar Knob?s high grade nature is a truly stand out feature amongst WPG?s assets today, Hawks Nest also commands attention. Peculiar Knob offers remarkable grades of direct shipping haematite, and Hawks Nest offers direct shipping haematite, magnetite and a haematite banded iron formation. Being in the WPA and coming under the jurisdictional regulations, the project has undergone the Independent Review of Mining Activities?known as the Hawke Report.

?It was first lodged with government in draft form in November last year and it makes very clear in there that mining and military activities can co-exist. The final report was then lodged in December, and we?re looking forward to that becoming available and the government considering and adopting those recommendations,? Duffin says.

?We think that will happen in this current half year. Hopefully by no later than this June there will be a protocol worked out for us to operate mining activities at Hawks Nest. We already have exploration permits in place, but the mining agreement so far as the Department of Defence is concerned does require the government to adopt the Hawke Report recommendations.?

At WPG?s Penrhyn coal deposit?a large tonnage sub-bituminous coal project in the Arckaringa Basin with potential for several hundred million tons of coal?there is more good news. Since embarking on a new drilling program from March 15, significant coal seams have been intersected.

?It?s early days, so there?s still a lot of data to be taken and analyzed, but it?s progressing in line with our expectations,? Duffin says.

?While Peculiar Knob and our iron ore business remains first in order of our priorities, the coal sector is a potentially valuable business for us and we?ve taken a placement in a company called Evergreen Energy which has technology for processing or upgrading the calorific value of sub-bituminous coals.?

A memorandum of understanding has been signed between WPG and Evergreen to jointly develop and commercialize Evergreen?s K-Fuel technology. Duffin says that a Heads of Agreement is in place to formalize this joint venture and the partners are in the process of doing so.

?Coal is very much secondary to our main game?getting Peculiar Knob developed on time and on budget?but it just so happens that the Penrhyn coal project is only 25 kilometres from the rail loading route that we?ll be using for the iron ore project? and there is spare capacity in the port facilities at Port Pirie,? he explains.

?If the coal project was somewhere else we wouldn?t be pursuing it, but it happens to have great access to infrastructure.?
Through taking advantage of what is immediately on offer in terms of projects and infrastructure, WPG has Penrhyn nicely placed behind Peculiar Knob and Hawks Nest?a move which diversifies the company portfolio and offers a favourable asset close to its first-and second-tier focuses today.

The story is only beginning

The development timeline for WPG?s projects over the coming couple of years, most prominently Peculiar Knob, is clearly defined. Final regulatory approvals will be completed by July, Commonwealth Government approval of the Hawke Report is expected for the second quarter, the drilling program at Penrhyn is underway and so is the joint venture with Evergreen.

?There is no doubt that far and away the most important and most critical objectives for us this year are to get those few final approvals in place for the development of Peculiar Knob and to commence construction of the project in the second half of this year?that?s absolutely No.1,? Duffin says.

Of course, in considering the progress WPG has made on all fronts and projects in the past six months, the story starts and ends with this flagship project. As soon as government approvals are complete, the next chapter?that of reaching production and sales?will begin. But equally importantly is the direction and delivery of news from this straight-talking team.

?There?s little hype in what we ever say and we have a strong management team that?s fully capable of building the project,? Duffin says.

?Once it?s built, we?ll operate it and I think we also have a reputation for being good disclosers. Anything that we say we seek to achieve without any embellishment and quite frankly, while it?s disappointing that the permitting process is taking longer than we thought, those sorts of delays are par for the course and despite them we?re absolutely certain that we?ll get there.?

In a couple of months WPG will have its final necessary governmental approvals and the real story will begin?one of site development bolstered by years of solid exploration and planning?and full steam ahead to production. There is no better company to set up, carry out and ultimately tell the tale of this, a story of cautious and measured development of high grade, well-placed and well-run assets.