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FOR DISSEMINATION IN THE U.S./
ASX & TSX: WSA
WEST PERTH, Western Australia, Jan. 24 /CNW/ - The Board of Western Areas
is pleased to announce further progress at Flying Fox:
- Production from the T1 ore body is scheduled to meet the target of
approximately 8,000 tonnes nickel in concentrate in CY 2008. Ore
production is on track to ramp up to 20,000t/mth ore at average grade
of over 4% nickel, early in the June quarter.
- T1 ramp up production will come from two large stope blocks (955 and
945) up to 15m wide which contain a total (greater than)180,000
tonnes ore at 5.1% nickel containing 9,200t nickel. Development is in
progress to access these stope blocks in March/April.
- Only 740 tonnes of Flying Fox nickel remains hedged. From the start
of the June quarter all production will be sold at spot price
coinciding with increased production.
- The mine decline is at 470m depth and should access T4 in December
2008. The initial study for a raise bored shaft from T4 is due for
completion in the March quarter. This is the first step to increase
ore haulage capacity from deeper deposits in the mine.
- Positive drilling results are continuing at T4. Drill hole FFD 190W3
intersected matrix sulphides 40m north of previous drilling,
increasing the width of T4.
- A revised interpretation of Flying Fox highlights the continuity of
high grade massive plus disseminated sulphide over a wider area.
Below T1, mineralisation now extends (greater than)700m vertical
extent in a zone up to 600m wide from the top of T4.
- Surface earthworks for the Stage One concentrator at Cosmic Boy are
complete. Construction is due to start at the end of March.
- Flying Fox operations are now cashflow positive. Western Areas holds
$A172M cash and $A82M debt facility which is drawn to $A54M. This is
significantly more than is required to fund all the planned
activities of the Company for 2008 and 2009.
Flying Fox Production
Production from Flying Fox T1 ore body is ramping up to meet the revised
target of 20,000 tonnes ore per month at an average grade of over 4% nickel.
The target is (greater than)8,500 tonnes nickel in ore, adjusted to 8,000
tonnes nickel in concentrate for CY 2008.
Flying Fox Mine Development
Stoping operations are ongoing in the T Zero ore body and in the top
level of T1. Approximately 70,000 tonnes of ore has now been mined from the T
Zero and T1 ore bodies and 65,000 tonnes have been milled at Norilsk's Lake
Johnson concentrator. The main decline is advancing in the footwall sediments
of the T1 deposit and is currently 470m below surface. Ground conditions
A recent detailed review of mine infrastructure and stoping methodology
has resulted in a positive change in the ore production schedule. More ore
will now be won from long - hole open stopes with two main stoping blocks
being the 955 stope (85,000t @ 5.13% Ni) and 945 stope (100,000t @ 4.89% Ni).
Development to these stopes is in progress and first ore from this area of the
mine is expected in March/April. The new mine plan will facilitate the
increased production target of 20,000 tonnes ore per month.
The decline development is on target to reach the bottom of the T1 ore
body by August 08 with the T4/T5 decline expected to reach the top of T4 in
December 2008. The hoisting shaft scoping study is well advanced with shaft
designs and costs expected by March.
Surface earthworks for the Cosmic Boy mill are complete and construction
tenders from leading engineering firms are due to close in early February.
There are seven diamond drill rigs at three deposits at Forrestania
drilling 24 hours per day.
One underground drill rig is testing T1 north of the dolerite dyke. Drill
hole FUG 156 intersected 18.6m (estimated true width 8m) of massive and
stringer pyrite. This intersection is on the northern edge of Flying Fox and
is not expected to contain significant nickel grades. Two drill rigs are
testing the northern and southern extremities of T4. Recent intersections
include 1.4 metres of matrix sulphides in drill hole FFD190W3 just south of
the dolerite dyke and 2.4 metres of matrix sulphides FFD193W3 on the southern
limit of drilling at T4.
One drill rig is testing the T6 and T7 deposits. The current drill hole
(FFD136W4W1W3W1) will be the final drilled from the west through the footwall
sequence. The drill rig will then move to a new site to test an interpretation
that T5 is continuous with the underlying T6 and T7 deposits. This program
will include testing the centre of the large T7 EM conductor.
A revised interpretation of Flying Fox has highlighted the continuity of
high grade massive and disseminated sulphide over a larger area than
previously considered. If the area of mineralisation defined by Kagara Ltd to
date is included, Flying Fox increases in width from 350m (at the Outokumpu
mine level) to 600m in width (at the T5 level). Below the T1 ore body, massive
sulphide appears to be continuous over more than 700m vertical extent from the
top of T4 (~600m depth) to the current limit of drilling at T7 (~1350m depth).
One drill rig is on site and a second is due to commence soon. The first
10 drill holes have all intersected high grade nickel sulphides at shallow
depth with the thickest and highest grade intersection recently announced in
the most northerly drill hole. WBD 28 intersected 8.6m at an estimated grade
of 7.8% nickel and 0.5% copper (using a Niton portable XRF analyser).
One drill rig is conducting the geotechnical drilling program as part of
the feasibility program. Four out of ten planned geotechnical drill holes have
been completed to date. An additional drill rig is booked to start in mid
February and is expected to move either to Spotted Quoll or Diggers South to
accelerate the drilling programs.
Exploration is continuing to progress on the Company's regional Western
Australian joint venture projects. These include the Mt Finnerty JV with Reed
Resources, Sandstone JV with Troy Resources, Mt Alexander JV with BHP, Lake
King JV with Swan Oak Holdings, Koolyanobbing JV with Portman Ltd and Western
Areas Lynn Lake project in Canada. We expect to be able to announce results
from most of these projects during the March quarter.
QA-QC STATEMENT: Mr Adrian Black from geological consultants Newexco
Services Pty Ltd ("Newexco") is responsible for the verification and quality
assurance of the Company's exploration data and analytical results from the
Forrestania Nickel Project. Surface diamond drill hole collar surveys used
differential GPS, down hole surveys employed a north seeking gyroscopic
instrument; comprehensive density database; high assay confidence with
systematic QA/QC procedures; and validated database. Samples of quarter core
from the drill holes described in this release are prepared and analysed by
ALS Chemex Ltd laboratory in Perth for nickel, copper, cobalt and other
elements. Core samples are crushed and pulverised to 90% passing 75 microns
then analysed for nickel by ore grade determination using the ALS OG-62
method. Assays standards are routinely inserted in the sample stream by
Newexco for quality control.
The information within this report as it relates to exploration results
or mineral resources is based on information compiled by Mr Julian Hanna. Mr
Hanna is a member of AusIMM and is a full time employee of the Company. Mr
Hanna has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity
which he is undertaking to qualify as a Competent Person as defined in the
2004 Edition of the 'Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves.' Mr Hanna consents to the inclusion in the
report of the matters based on the information in the form and context in
which it appears.
FORWARD LOOKING STATEMENT: This release contains certain forward-looking
statements. An example of a forward looking statement in this release is
'Production from the T1 ore body is scheduled to meet the target of
approximately 8,000 tonnes nickel in concentrate in CY 2008.' Forward-looking
statements are subject to a variety of risks and uncertainties beyond the
Company's ability to control or predict which could cause actual events or
results to differ materially from those anticipated in such forward-looking
This announcement does not include reference to all available information
on the Company or the Forrestania Nickel Project and should not be used in
isolation as a basis to invest in Western Areas. Any potential investors
should refer to Western Area's other public releases and statutory reports and
consult their professional advisers before considering investing in the
For Purposes of Clause 3.4 (e) in Canadian instrument 43-101, the Company
warrants that Mineral Resources which are not Mineral Reserves do not have
demonstrated economic viability.
For further information:
For further information: Julian Hanna, Managing Director - Western
Areas, Telephone +61 8 9334 7777, Email: firstname.lastname@example.org; Ann
Nahajski, Investor Relations - Porter Novelli, Telephone +61 8 9386 1233,
Email: email@example.com; Craig Oliver, NL Finance Director -
Western Areas NL, Telephone +61 8 9334 7777, Email:
firstname.lastname@example.org; Or visit: www.westernareas.com.au