WPG Resources Ltd · projects in the next few years ¾BHP now 155 mtpa going to 240 mtpa by 2016; 350 mtpa by 2020 and 450 mtpa ultimately ¾Rio 220 mtpa now going to 333 mtpa by

WPG Resources Ltd

Sale of Iron Ore Assets to OneSteel Limited

“One door closes, another one opens!”

Presentation to General Meeting4 October 2011

Chairman’s Presentation to General Meeting 4 October 2011 2

Development Progress


WPG’s Key Project AssetsIRON ORE• DSO: Peculiar Knob,

Buzzard and Tui deposits

• Magnetite BIF: Kestrel and Goshawk, Harrier, Eagle, Kite and Falcon at Hawks Nest

• Haematite BIF: Buzzard and Tui footwall

COAL• Penrhyn, Perfection

Well, Pidinga, LochielEXPLORATION• Mt Brady, Windy Valley


WPG’s Development Plan – Peculiar Knob• Fully permitted• 3.3 mtpa to start May-

June 2012• Haul road from mine to

Wirrida Siding• Maluku Kuru village for

240 persons• Crushing plant at siding• Rail haulage 11,200

tonnes per train 6 days per week to Port Pirie

• Transshipment to Capesize ships in deep water in Upper Spencer Gulf

• One ship every 3 weeks


Mining Contractor• Mining, crushing and rail loading contracts have

been awarded to MACA Ltd• Mining contractor has mobilised to site• But equipment has been parked up awaiting

transfer of contract


Site Accommodation• Maluku Kuru accommodation village is

being built on site for 240 persons • Entire village already built and now being

relocated to site and services connected• Very comfortable standard of

accommodation, messing and recreational facilities


Haul Road and Water Supply Construction

The construction of the haul road from the mine site to Wirrida Siding and the water supply pipeline from the Penrhyn borefield to the crusher, camp and mine are well under way


Rail Locos and Wagons• Road haulage contract awarded to GWA• GWA locos (9 off) for Peculiar Knob

project are being built in Australia• Rail wagons (374 off) are being built in

China by China North Rail• Locos fleet build almost finished• Wagon prototype also almost finished


Port Pirie• Kerman Contractors and their sub-contractors were

well advanced on site preparation when OneSteel deal came along

• We own the key block of land at Pirie• We have put the site on care and maintenance

pending Completion of the OneSteel deal• The land and DA belong to WPG and will not be sold

to OneSteel


The OneSteel Transaction


Sale of Iron Ore Assets to OneSteelWPG has agreed to the sale of all of its iron ore assets to OneSteel Limited for cash. The sale assets include:

– The development ready DSO Peculiar Knob project;

– The Buzzard and Tui DSO deposits at Hawks Nest; and

– The large scale Hawks Nest magnetite project

Certain cash return of $1.05 per share to WPG shareholders; comprising:

– A return of capital of $0.42 per share; and

– A fully franked dividend of $0.63 per share with a franking credit of $0.27 per share

In addition, WPG shareholders will retain exposure to:

– WPG’s non iron ore assets, including the significant Penrhyn coal project

– Cash of approximately $12m (~5 cents per share) on completion

– A proven exploration and asset development team

Cash is expected to be disbursed on 2 November 2011

The transaction is subject to WPG shareholder approval


Key Benefits to WPG ShareholdersRealisation of significant cash return to WPG shareholders

Post-tax proceeds and surplus cash to be distributed to shareholders

Value realised in the midst of uncertain markets

Historically high iron ore prices

Significant volatility in commodity and capital markets

Sale proceeds imply a significant premium to WPG market prices

Avoids risks associated with constructing, funding and operating the Fe Assets

Shareholders retain exposure to:

WPG’s non iron ore assets including the significant Penrhyn coal project

Proven asset development team


Some Relevant ConsiderationsAlthough high grade, Peculiar Knob is inevitably a high cost operation (cost of isolation)There is an enormous amount of new and lower cost production to come on stream from Pilbara projects in the next few yearsBHP now 155 mtpa going to 240 mtpa by 2016; 350 mtpa by 2020 and 450 mtpa ultimatelyRio 220 mtpa now going to 333 mtpa by 2015FMG now 55 mtpa going to 155 mtpa by 2012 and 355 mtpa medium term The iron ore price is now at historical highs and all analysts forecast price will halve in the next 5 yearsSo it makes sense to monetise the project now

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PECULIAR KNOB CFR OPEX $90/t

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PECULIAR KNOB CFR OPEX $90/t

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ne CIF

Historical (62% Fe) Credit Suisse Deutsche Bank Macquarie RBC UBS


Timetable

Share purchase agreement announced on 2 September 2011

General meeting of shareholders to consider transaction being held today

Providing Resolutions 1 and 2 are approved, dividend will be announced tomorrow

Completion of transaction expected to occur on 6 October – WPG gets OneSteel’s money then

Trading of WPG shares on ex-return of capital and ex-dividend commences on 10 October

Record date for return of capital and dividend 14 October

Effective date for the return of capital and dividend 1 November

Distribution of funds to WPG shareholders 2 November

NB: all dates are indicative only


Our Performance


WPG is Now One of SA’s Largest Miners

• WPG’s Market Cap now ~$300m

• Bigger in market cap terms than any other SA-focussed miner other than OZ Minerals

• WPG is on the verge of being included in the ASX 300 list

Source: MorningstarData as at 3 October 2011

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WPG RXM HGO IXR CXM IRD IFE HAV TZN USA LML MEP PNX

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Market CapitilisationsSA Mining Companies


WPG has Delivered Outstanding Returns

• WPG has delivered outstanding TSR when measured over 1, 3 or 5 year time frames

• TSR has been consistent –investment grade

• We’ve beaten the large miners, the large industrials

• Some high flying golds have done better – but lumpy Source: Morningstar

Data as at 3 October 2011

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WPG Going Forward


Overview of WPG Post Completion

Coal Assets

Penrhyn Coal Project– Total current Resource size of 352 million tonnes– Targeting Resource growth of a further 300 – 330 million tonnes

Lochiel North Coal Project– Total resource size of 270 million tonnes

Evergreen Energy Inc. Coal JV– Potential to upgrade WPG coal resources to higher rank thermal coal quality

Port PirieWPG will retain the land acquired for Peculiar Knob development

Significant optionality from 10 year lease on Berth 7 with 2 x 10 year options

Board & Management

Proven Board and management team to be retained by WPG

Funding of not less than $12 million at 30 June 2012 after all costs paid

Organic and M&A acquisition opportunities to be pursued post completion


Coal Fired Power Stations In Construction

Source: Arch Coal


Projected Growth in Coal Demand

Source: Arch Coal


K-Fuel® Upgrades and Product Value

$50

$85 Margin Increase

Target ROM Quality

$/tonne*

*Indonesian Pricing 9/9/2011

The Evergreen Process Works!


Coal Assets: Evergreen Energy JVWPG – Evergreen Energy – Coal JV

Key Points of WPG – Evergreen JV50/50 JV in which WPG contributes coal tenements in SA and Evergreen the technology and know-howJV has the exclusive right to use the K-Process for the first 15 mtpa upgraded coal produced anywhere in Australia and first right to any other Australian productionWPG has sent coal core samples from Penrhyn to Evergreen for test workJV documents have been signed and JV has come into effect

OriginMoisture HHV (kcal/kg)

Raw Coal K-Fuel Product Raw Coal K-Fuel

ProductSource 1 31.72 14.00 3,922 5,043

Source 2 44.96 14.80 3,563 5,666

Source 3 64.12 22.00 2,229 5,069

Source 4 51.91 24.60 3,140 5,139

Source 6 50.06 14.30 3,203 5,648

Source 7 26.95 13.20 4,789 5,862

Evergreen Energy Inc (NYSE Arca: EEE) has developed the K-Process:

– Clean coal upgrading technology – Potential to upgrade low value sub-bituminous

coals and lignite to higher rank thermal coal quality

– Significantly reduces air emissions and other pollutants from coal-burning power plants


The Process Has Operated Commercially• Process designed at Stanford in 1975• Pilot, demonstration and commercial scale

plants have been built• 750,000 tpa commercial plant at Gillette

Wyoming operated for several years until GFC

• Product was sold to power stations


Coal Assets: PenrhynPenrhyn Coal Project

Permian semi-bituminous coal in the Arckaringa Basin 40km SW of Coober Pedy

ResourceTotal Resource of 352.4 mtAdditional Exploration Target of 300 – 350 mt

DevelopmentLarge tonnage suitable for large scale developmentSuitable for upgrading using the Evergreen Energy’s K-Fuel ProcessPotential use for domestic power station or export after upgrading

Penhryn Coal Project - Category Tonnage (mt)Measured 185.4Indicated 150.5Inferred 16.5

Total Resource 352.4


Coal Assets: Lochiel NorthLochiel North Coal Project

Lignite in the St Vincent basin 80km south of Port Pirie and alongside existing infrastructure

Similar to the Lochiel and Bowmans coal deposits

Explored by ETSA in the 1980’s as a potential replacement for Leigh Creek

Development

Potential use for domestic power station or export after upgrading

Lochiel North Coal Project - Category Tonnage (mt)

Inferred 270

Total Resource 270


Port Pirie• We have a 10 year lease on Berth 7 with 2

X 10 year options• DA for construction of facilities approved• DA is for iron ore but we can apply to

modify it for other commodities• Capacity 7 mtpa• Project now on care and maintenance


New Project Investment CriteriaThe Company is flexible but the ideal opportunity will satisfy many of the following criteria:

• Location: preferably in Australia

• Commodity: most, including bulks and certain non-metallics

• Resource: a defined resource, or with a clear path to early establishment of a resource, with upside potential; in most circumstances a big deposit is better than a small one

• Near term cashflow potential

• Vendor: a willing or forced seller – owner in Administration, a non-core asset of a larger company, an asset where a change of management could deliver a better outcome

• Acquisition price: Ideally less than sunk costs; WPG has the ability to raise significant funding for the right project

• Assets where WPG can leverage off its good connections with institutional and retail shareholders, Chinese and Korean offtake parties and strategic investors, and where the Company’s management team can add value.

WPG will not be looking at:

• Opportunities which are largely exploration plays

• Shop soiled assets.

A special class of opportunity which will be well regarded is one that is:

• Located in South Australia, where WPG’s detailed knowledge of the mining sector and the permitting environment can add value quickly

• Able to leverage of WPG’s Port Pirie port land and development capability that can deliver a route to market for projects which may otherwise not enjoy this benefit.


Important NoticeThis presentation contains forward looking statements concerning the projects owned by WPG. Statements concerning mineral resources and ore reserves may also be deemed to be forward looking statements in that they involve elements based on specific assumptionsForward looking statements are not statements of historical fact, and actual events or results may differ materially from those described in the forward looking statements as a result of a variety of risks, uncertainties and other factors. Forward looking statements are based on WPG’s beliefs, opinions and estimates as of the date they are made and no obligation is assumed to update forward looking statements if these beliefs, opinions and estimates should change or reflect other future developmentsData and amounts shown in this presentation relating to capital costs, operating costs and project timelines are based on consultant reports, contractor quotes and internally generated estimatesWPG cannot guarantee the accuracy and/or completeness of the figures or data in this presentationAll dollar amounts indicated in this presentation are in Australian dollars unless otherwise stated.

Competent Person: The review of exploration activities and results for the Penrhyn coal deposit contained in this presentation is based on information compiled by Mr Gary Jones, a Member of the Australasian Institute of Mining and Metallurgy. He is Technical Director of WPG Resources Limited and a full time employee of Geonz Associates Limited. He has sufficient experience which is relevant to the style of deposits under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the December 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). Gary Jones has consented in writing to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.The exploration targets in this presentation are based on the currently available drill hole data and are conceptual in nature. There has been insufficient exploration to define a mineral resource, and it is uncertain if further exploration will result in the determination of a mineral resource

Documents

WPG Resources Ltd · projects in the next few years ¾BHP now 155 mtpa going to 240 mtpa by 2016; 350 mtpa by 2020 and 450 mtpa ultimately ¾Rio 220 mtpa now going to 333 mtpa by