Western Plains (ASX:WPG) Defies Massive Market Plunge

Sydney, June 8, 2010 AEST (ABN Newswire) - Shares in Western Plains Resources Ltd (ASX:WPG) defied the massive falls of the Australian market and surged more than 10 per cent on Monday, while the local shares wiped off nearly A$40 billion of the market value. The company said it had reached agreements to sell 9 million tonnes iron ore over five year from its Peculiar Knob project in South Australia.

The non-binding MOU agreements contain provisions to extend the life of the sales arrangements beyond five years, under agreed circumstances, Western Plains said in a statement. The MOUs are expected to be converted into binding sales contracts when the commitment to project development is taken. Sales will be made at market clearing prices on a quality adjusted basis, using a mix of CNF and FOB pricing.

No details about Western Plains' customers were provided in the statement. But the company has previously indicted the iron ore produced from Peculiar Knob will be shipped to Asia.

Western Plains says it intends to take the decision to commit to the project in the second half of 2010. Export sales of at least 2.3 million tonnes per annum are expected to commence in second half in 2011.

Shares of Western Plains closed at A$0.58 on Monday, up from A$0.52 on Friday.

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Michelle Liang Asia Business News Asia Bureau Tel: +61-2-9247-4344 Email: michelle.liang@abnnewswire.net