ASX and Media Release Quarterly activities report September quarter 2013 HIGHLIGHTS Martin Jacobsen, WPG s Chief Executive Officer has been appointed Managing Director. SA exploration program: Results show good potential for sulphide nickel and DSO haematite deposits in SA tenements. New project opportunities: More than 40 projects reviewed with highly detailed value and risk appraisal of prime potential asset selection. New project search: Scoping across wide range of commodities and mining sectors both in Australia and overseas, taking advantage of depth of in-house skills and experience. New project criteria: Projects where WPG can add value to the asset and also ensure bringing shareholder value. WPG well funded: Cash at bank at 30 September $9.8 million, representing cash backing of 3.8 cents per share. 31 October 2013
September 2013 Quarterly Report 31 October 2013 SOUTH AUSTRALIAN PROJECT ASSETS WPG has completed the program of geophysical exploration that was commenced in July on its Muckanippie, Lake Woorong and Robins Rise tenements in the Northern Gawler Craton region near Coober Pedy in South Australia. The location of these tenements is shown the figure below. Penrhyn Coal Location of WPG South Australian Tenements Modelling of the results of the recent geophysical work combined with data from previous explorers has indicated that: Prospect targets within the Muckanippie EL are considered to have excellent potential for discovery of a massive sulphide nickel deposit; and
September 2013 Quarterly Report 31 October 2013 The Robins Rise and Lake Woorong tenements are highly prospective for the discovery of DSO haematite deposits akin to the Peculiar Knob and Hawks Nest deposits that were developed and sold by WPG in 2011. WPG is planning a program of follow up exploration for these targets that will comprise lines of strategically sited scout RAB/aircore holes across the anomalies to test for mineralisation supporting geochemical and geological signatures. Any resulting anomalies will be followed up with more systematic grid based RAB/aircore drilling followed by deeper RC and/or diamond drilling of the highest priority targets that emerge. Muckanippie The Muckanippie EL covers part of the north-western side of the large Malbooma Anorthosite Complex, a large circular intrusion that covers an area of approximately 800 square kilometres and comprises anorthosite, gabbro, diorite syenite, granodiorite and granite. Elsewhere in the world similar anorthosite complexes are host to significant nickel and copper massive sulphide deposits. Location of EL 5154 Muckanippie Prospects The main prospect targets identified as indicated in the figure above include: Nardoo and Nardoo South; Duke; Boys; and Regal.
September 2013 Quarterly Report 31 October 2013 At the Nardoo and Nardoo South prospects ground magnetic surveying has defined strong linear anomalies that are favourably located within the outer perimeter of the Malbooma Anorthosite Complex. The anomaly at Nardoo South shows a strong coincidence with high nickel (up to 1,422 ppm) and high iron values (up to 44.8%) in RAB holes drilled on one line across the peak of this anomaly by a previous explorer (see figure below). WPG considers this prospect has excellent potential for the discovery of a massive sulphide nickel deposit. Nardoo & Prince Prospects Magnetic Images An intense NNE trending anomaly with a strike length of 2.3 kilometres has been defined at the Duke prospect. Modelling indicates this anomaly is due to zones of shallow sub-vertical magnetic material. Moderately anomalous nickel values were also obtained from a line of RAB holes drilled by a previous explorer across this anomaly. The Boys prospect anomaly is a 500 metre long east-west striking anomaly of 1,900 nano teslas which modelling indicates is caused by two parallel south dipping magnetic bodies with a combined width in the order of 170 metres. The magnetic survey at the Regal prospect has defined a complex of three anomalies that have a general north west trend. Based on the known geology it is likely that these anomalies are situated around the margins of a granite intrusion and may indicate the presence of skarn and or massive sulphide style mineralisation.
September 2013 Quarterly Report 31 October 2013 Robins Rise and Lake Woorong The Robins Rise and Lake Woorong project tenements are located on the southern side of the geological terrain known as the Coober Pedy Ridge. Basement rocks comprise a mixed suite of gneiss, schist, quartzite and BIFs of Lower Proterozoic age intruded by adamellite and granite. Several of the former sedimentary units contain high levels of magnetite. In addition to total aeromagnetic coverage, over 80 percent of the combined project area has been subjected to detailed gravity surveying by past explorers. WPG considers the Coober Pedy Ridge is highly prospective for the discovery of DSO haematite deposits and exploration on five of the targets is being focussed on this style of mineralisation. WPG is using a target model developed from the comprehensive in-house knowledge of the ore controls of the Peculiar Knob DSO iron deposit. The targets identified, which are indicated in the figure below, are: Lady Isabella; Jurby; Peel; Adromeda; and Fomax. Location of EL 4907 Lake Woorong & EL 4525 Robins Rise Prospects A high priority target is the Lady Isabella prospect where two inclined RC percussion holes drilled by a previous explorer intersected broad intervals of magnetite bearing gneiss with grades up to 39.5% Fe. The recent program of ground magnetic surveying completed by WPG has covered an area of 7.25 sq km at this prospect and results have defined what appear to be four east-west striking magnetic horizons. These results show there is clearly scope to extend the promising mineralisation intersected in the previous drilling. A 2.2 kilometre long intense linear anomaly has been defined at the Jurby prospect. Modelling indicates this anomaly is caused by a shallow sub-vertical 400 metre wide body of magnetic material that geological interpretation suggests is favourably disposed in regard to the DSO hematite target model being implemented by WPG. A strong linear gravity anomaly that is coincident with the magnetic anomaly as shown in the figure below provides added support to the potential for the discovery of a deposit of high grade iron ore at Jurby.
September 2013 Quarterly Report 31 October 2013 Jurby Prospect Showing Magnetic Image Strong linear anomalies have also been defined at the Peel and Adromeda prospects. Interpretation of this new data is on-going however WPG considers the results have reinforced the view that both prospects have good potential for the discovery of iron ore and/or massive sulphide deposits with further work. A ring of magnetic highs surrounding a kidney shaped central low has been defined from the results of the ground survey at the Fomax prospect. Based on information from known regional geological interpretation these anomalies appear to be situated peripheral to a Hiltaba Suite granite intrusion. In this case, if the original stratigraphy was high in magnetite content as are many of the geological units that make up the Coober Pedy Ridge, then the setting is akin to that at Peculiar Knob and consequently has good potential for DSO hematite mineralisation. Other Projects Lochiel North, Perfection Well and Mirikata No exploration work was undertaken on these project areas during the quarter. CORPORATE Martin Jacobsen, WPG s Chief Executive Officer has been appointed Managing Director. Martin, who joined WPG in 2007, was an integral part of the leadership team for the successful outcomes of WPG s iron ore asset sale to Arrium and has been managing new project acquisition and development identification and assessment. Heath Roberts, who had been a Director of WPG since 2004, resigned from the Board and as an employee to pursue new opportunities in a family run business
September 2013 Quarterly Report 31 October 2013 during the quarter. WPG extends its sincere thanks to him for his contribution to the Company's success during the past 9 years and wishes him well in the future. FOCUS In parallel with its exploration activities in South Australia, WPG has intensified its comprehensive review of mining investment opportunities. In total the Company has reviewed more than 40 projects and companies and carried out in-depth value and risk assessment of those selected as having prime potential. The scope of opportunities being reviewed covers a wide range of commodities and mining sectors both in Australia and overseas taking advantage of the depth of WPG s in-house skills and experience. WPG s focus is to identify projects where it can add value through its management team s skill sets and its strong cash position and at the same time bring fundamental value to shareholders. The Company emphasis is on advanced stage exploration to PFS/BFS stage assets, where WPG can add value by completing permitting and de-risking projects prior commercial development decisions. As at 30 September 2013 the Company had cash at bank of $9.8 million, representing cash backing of 3.8 cents per share. The Company is extremely well placed to weather the malaise in the resource sector and in fact to take advantage of that environment through the considered review and acquisition of economically viable assets. Competent Person The review of exploration activities and results contained in this report are based on information compiled by Mr Gary Jones, a Fellow 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 mineralisation and types 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 report of the matters based on his information in the form and context in which it appears. Further Information For further information please contact WPG s Executive Chairman, Bob Duffin on (02) 9247 3232 or Managing Director & CEO, Martin Jacobsen on (02) 9251 1044.
Appendix 5B Appendix 5B Rule 5.5 Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/2013 Name of entity WPG Resources Ltd ABN Quarter ended ( current quarter ) 51 109 426 502 30 September 2013 Consolidated statement of cash flows Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) administration 1.3 Dividends received Current quarter Year to date (3 months) 1.4 Interest and other items of a similar nature received 116 116 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other (provide details if material) (425) (821) (425) Net Operating Cash Flows (1,130) (1,130) (821) Cash flows related to investing activities 1.8 Payment for purchases of: (a) prospects (b) equity investments (c) other fixed assets 1.9 Proceeds from sale of: (a) prospects (b) equity investments (c) other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Net investing cash flows 0 0 1.13 Total operating and investing cash flows (carried forward) (1,130) (1,130) + See chapter 19 for defined terms. 01/05/2010 Appendix 5B Page 1
Appendix 5B 1.13 Total operating and investing cash flows (brought forward) (1,130) (1,130) Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Net financing cash flows 0 0 Net increase (decrease) in cash held (1,130) (1,130) 1.20 Cash at beginning of quarter/year to date 10,941 10,941 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end of quarter 9,811 9,811 Payments to directors of the entity, associates of the directors, related entities of the entity and associates of the related entities Current quarter $A'000 1.23 Aggregate amount of payments to the parties included in item 1.2 208 1.24 Aggregate amount of loans to the parties included in item 1.10 1.25 Explanation necessary for an understanding of the transactions Non cash financing and investing activities 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest + See chapter 19 for defined terms. Appendix 5B Page 2 01/05/2013
Appendix 5B Financing facilities available Add notes as necessary for an understanding of the position. 3.1 Loan facilities 3.2 Credit standby arrangements Amount available Amount used Estimated cash outflows for next quarter 4.1 Exploration and evaluation 531 4.2 Development 0 4.3 Dividends and Return of Capital unpresented in previous quarter 166 4.4 Administration 495 4.5 Taxation 0 Total 1,192 Reconciliation of cash Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows. Current quarter Previous quarter 5.1 Cash on hand and at bank 38 62 5.2 Deposits at call 280 721 5.3 Bank overdraft 0 0 5.4 Other fixed term bank deposits 9,493 10,158 Total: cash at end of quarter (item 1.22) 9,811 10,941 Changes in interests in mining tenements and petroleum tenements 6.1 Interests in mining tenements and petroleum tenements relinquished, reduced or lapsed 6.2 Interests in mining tenements and petroleum tenements acquired or increased Tenement reference and location Nature of interest (note (2)) Interest at beginning of quarter Interest at end of quarter + See chapter 19 for defined terms. 01/05/2010 Appendix 5B Page 3
Appendix 5B Issued and quoted securities at end of current quarter Description includes rate of interest and any redemption or conversion rights together with prices and dates. Total number Number quoted 7.1 Preference + securities (description) 7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy backs, redemptions 7.3 + Ordinary securities 261,117,428 261,117,428 Issue price per security (see note 3) (cents) Amount paid up per security (see note 3) (cents) 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy backs 7.5 + Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted 170,050 7.7 Rights 4,428,115 0 Vesting date 1 July 2015 7.8 Rights granted during quarter * 5,338,751 0 Vesting date 1 July 2016 7.9 Rights vested during quarter 170,050 7.10 Expired during quarter ** 7.11 Debentures (totals only) 7.12 Unsecured notes (totals only) the Company will also grant 527,922 incentive rights to one Executive Director subject to shareholder approval at the next General Meeting ** during October 2013, 736,882 unvested incentive rights previously granted to employees who left the Company were cancelled in accordance with the Incentive Rights Plan + See chapter 19 for defined terms. Appendix 5B Page 4 01/05/2013
Appendix 5B Compliance statement 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 5). 2 This statement does give a true and fair view of the matters disclosed. Sign here: Larissa Brown Date: 31 October 2013 (Company secretary) Print name: Larissa Brown Notes 1 The quarterly report provides a basis for informing the market how the entity s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report. 2 The Nature of interest (items 6.1 and 6.2) includes options in respect of interests in mining tenements and petroleum tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement or petroleum tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2. 3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities. 4 The definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of International Financial Reporting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with. == == == == == + See chapter 19 for defined terms. 01/05/2010 Appendix 5B Page 5
Appendix 5B Schedule of tenements as at 31 October 2013 Tenement Tenement Number Interest Holder / Joint Venture Details SOUTH AUSTRALIA IRON ORE/BASE METALS/GOLD TENEMENTS Lake Woorong EL 4907 100% Interest held by wholly owned subsidiary Southern Coal Holdings Pty Ltd. Mirikata EL 5075 100% Interest held by WPG Resources Ltd. Muckanippie EL 5154 100% Interest held by WPG Resources Ltd. SOUTH AUSTRALIA COAL TENEMENTS Penrhyn EL 4525 100% Interest held by wholly owned subsidiary Southern Coal Holdings Pty Ltd. Perfection Well EL 4908 100% Interest held by wholly owned subsidiary Southern Coal Holdings Pty Ltd. Lochiel North EL 4670 100% Interest held by wholly owned subsidiary Southern Coal Holdings Pty Ltd. EL = Exploration Licence + See chapter 19 for defined terms. Appendix 5B Page 6 01/05/2013