Posted on 07 Oct 2011
ASX-listed OneSteel said on Thursday it would spend A$80-million on bringing the Peculiar Knob mine, which it bought from WPG Resources, into production.
Peculiar Knob, in South Australia, would produce some 3.3-million tons a year of high-grade iron-ore fines, and OneSteel said that it expected to be in a position to start iron-ore sales from the mine by the fourth quarter of 2012.
OneSteel paid A$320-million for WPG’s South Australian iron-ore assets, which was lower than the previous sales estimate of A$346-million, owing to the lower expenditure on the projects during the previous quarter.
The WPG iron-ore assets included the Peculiar Knob high-grade direct shipping ore (DSO) hematite project, as well as the Buzzard and Tui DSO hematite deposits at Hawks Nest, along with the WPG magnetite deposits.
Meanwhile, WPG said that it would proceed to distribute around A$1.05 a share to its shareholders. The distribution would consist of a return of capital of 42c a share, which was approved by WPG shareholders at a general meeting on October 4, as well as the payment of a fully franked dividend that was announced on October 5.
WPG’s main assets now include its 50% shareholding in Southern Coal Holdings, which owns the Penrhyn and Lochiel North coal projects, as well as the exclusive rights to use Evergreen Energy’s coal upgrading process for the first 15-million tons a year of product coal produced anywhere in Australia, along with WPG’s land in Port Pirie and its ability to develop a bulk commodities export facility there.
WPG said that it has started a programme to review new project investment opportunities.
