Perth, July 10, 2006 AEST (ABN Newswire) - Golden West Resources Limited (ASX: GWR), developer of the high grade Wiluna Iron Ore Project, is pleased to announce the Company has today signed an Option Agreement with the Esperance Port Authority to enter into a lease for an area on the Port to construct an iron ore shed.
Subject to relevant regulatory and environmental approvals, construction of the 300,000 tonne capacity shed is expected to commence in mid 2007.
The Board of Directors said the signing of the option agreement was concluded after several months of negotiation.
The Esperance Port Authority has significant experience in handling iron ore port facilities and the Company acknowledges the cooperation of the Authority in concluding this agreement in a timely manner.
Securing land at the Esperance Port is the first of several strategic steps required to advance the production and export of iron ore in accordance with the first stage of a two stage strategy in the development of the Company's Wiluna Iron Ore Project.
The first stage consists of mapping, surface sampling and drilling to outline a JORC resource of three to five million tonnes of high grade iron ore. A drilling program is currently underway with assay results expected in the current quarter.
The resource will generate cash flow for the Company from sales of up to one million tonnes of iron ore per year for a period of three to five years.
The Company's infrastructure strategy is centred on iron ore being transported by road to Leonora and then by rail to the port of Esperance for export to overseas markets.
Funding Strategy
The second stage exploration will be financed by the revenue generated from the first stage and be developed concurrently. It will consist of exploration for, and delineation of a JORC resource of at least one hundred million tonnes of iron ore. A resource of this size will allow the Company to commit to building the infrastructure (rail links and additional export facilities) necessary to increase its production to approximately 10 million tonnes per year with the aim of at least a 10 year mine life.
Based on surface mapping to date, the Company is confident that the objectives of the second stage can be achieved in a timely manner.
Geraldton Iron Ore Alliance
The Company remains a member of the Geraldton Iron Ore Alliance and its proposed Oakajee Port development north of Geraldton. The Board views Oakajee Port as important for the midwest region and is determined to keep several options available for future infrastructure requirements.
Source:
Kevin Skinner
Senior Consultant
FIELD PUBLIC RELATIONS
231 South Road
MILE END SA 5031
Tel: (08) 8234 9555
Fax: (08) 8234 9566
Mob: 0414 822 631
kevin@fieldpr.com.au
Contact
Gary Hutchinson
Managing Director
Mick Wilson
Exploration Manager / Director
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