Penrhyn Coal
EL 3336 Robins Rise
ELA 339/09 Lake Woorong
OVERVIEW
WPG has an option agreement to acquire EL 3336 Robins Rise and ELA 339/09 Lake Woorong from Stellar Resources Limited. These adjoining tenements cover a combined area of 1,707 square kilometres and are situated south of Coober Pedy in close proximity to the Company’s iron ore projects in the Northern Gawler Craton.
On execution of the agreement WPG made an initial payment of $100,000 to Stellar and can exercise the option by the payment of a further $250,000 within twelve months. WPG will also pay Stellar a royalty of $0.60 per tonne for any future coal or iron ore production from these tenements. In the event that exploration by WPG defines a JORC compliant non coal or iron ore mineral resource then Stellar has the right to acquire a 49% joint venture interest in that non coal or iron ore deposit by paying WPG an amount equal to three times the amount spent by WPG on that exploration.
GEOLOGY & EXPLORATION TARGETS
Of particular interest to WPG is the Penrhyn coal deposit which is located within the Robins Rise tenement. Penrhyn was discovered in 1995 as part of the South Australian Exploration Initiative and was subsequently explored by the South Australian Steel and Energy (SASE) joint venture. The deposit lies within the Arckaringa Basin and the quality of the sub-bituminous coal is reported to be generally similar to other Arckaringa Basin coals. Estimated dimensions of the Penrhyn trough are 25 kilometres long by 5 kilometres wide and drilling by PIRSA (formerly MESA) has shown that the deposit contains up to four major and several minor coal seams that in places make up a cumulative thickness of up to 15.5 metres.
Outline & Long Section of the Penrhyn Coal Deposit
The relatively flat lying coal seams lie at depths ranging between 70 and 130 metres beneath a 60 metre deep sequence of Eromanga Basin sediments and surficial cover. In WPG’s view, the exploration target at Penrhyn is in the range from 250 to 350 million tonnes of coal. This exploration target is based on the currently available drill hole and coal quality data and is conceptual in nature. There has been insufficient exploration to define a coal resource, and it is uncertain if further exploration will result in the determination of a coal resource.
WPG considers there are several possible uses that may support the future development of the Penrhyn coal measures:
- As a source of coal for a coal to liquids project similar to that planned for other Arckaringa Basin coal deposits near Coober Pedy.
- To provide coal for a small custom designed power station that would supply electricity to the magnetite concentrator for the Hawks Nest project.
- To be used as either a reductant and/or as a source of energy for a pig iron plant to be fed with iron ore from Hawks Nest and other WPG projects in the Northern Gawler Craton.
In addition to the Penrhyn coal deposit, ELs 3336 and 3436 also have potential for the discovery of iron ore, IOCG and uranium mineralisation. The tenements may also contain significant water resources. The Eromanga and Arckaringa Basins contain known aquifers, and several exploration holes drilled in the past in the two tenements have encountered high water inflows.
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