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ASX & TSX: WSA
WEST PERTH, Western Australia, June 19 /CNW/ -
Western Areas NL ("Western Areas") (ASX and TSX: WSA) is delighted to
announce the pricing of an issue of A$225 million of convertible bonds
("Convertible Bonds") due 2012. The Joint Lead Managers and Bookrunners were
Macquarie Equity Capital Markets Limited ("Macquarie") and UBS AG, Australia
The Convertible Bonds are to be issued at a premium of approximately 45%
to the last price of Western Areas shares prior to the launch, the highest
conversion premium ever achieved for a Convertible Bond by an Australian
The Offer was heavily oversubscribed, with strong demand from investors
in all major capital markets including the United Kingdom, continental Europe,
North America and Asia Pacific. Western Areas granted the Joint Lead Managers
and Bookrunners an increase option to purchase a further A$25 million of
Convertible Bonds that was exercised in full on 18 June 2007, resulting in a
total issue size of A$225m.
Western Areas' Managing Director, Julian Hanna, said "The success of this
convertible bond underlies Western Areas' growth potential and the financial
markets bullish outlook for nickel. This transaction positions the Company to
assess and bring on potential additional production at Diggers South and New
Morning/Daybreak. Additionally it allows Western Areas to expand into other
strategic and quality projects in both Australia and Canada."
The Convertible Bonds are direct, unconditional, unsubordinated, senior
and unsecured obligations of Western Areas, carry a coupon of 8.00% per annum
and are convertible into Western Areas shares at an initial conversion price
of A$8.16 per share (subject to standard adjustments for certain capital
The conversion right of the Convertible Bond can be exercised by the
holder any time after 41 days from completion, subject to Western Areas' right
to cash settle in lieu of the issue of ordinary shares.
Unless previously redeemed or converted, the Convertible Bonds will be
redeemed at par on 2 July 2012. Western Areas has the further right to redeem
all outstanding Convertible Bonds at their principal amount on or after 20
July 2010 if the Western Area share price exceeds for a specified time 130% of
the conversion price.
Application has been made for a listing of the Convertible Bonds on the
Singapore Stock Exchange.
Proceeds from the offering will be used to further advance Western Areas'
objective of becoming a major nickel producer in Australia and Canada.
Specifically, proceeds will be applied to the following:
- funding the pre-feasibility study at Diggers South where mineral
resources were upgraded in late March 2007 to 80,300 tonnes of nickel
with potential to be brought into production;
- continuing the scoping study of potential mine development at the New
Morning/Daybreak deposit where mineral resources were recently
upgraded to 30,700 tonnes of nickel with potential to be brought into
- ongoing exploration at Western Areas' highly prospective tenements
along the 90km Forrestania project;
- potential construction of a 250,000 tonnes per annum concentrate
plant at Cosmic Boy that could be operational during 2008;
- restructuring of Western Areas' remaining hedging commitments; and
- funding possible nickel project and corporate opportunities.
About Western Areas
Western Areas is an Australian based high grade nickel sulphide explorer
and producer. The company has a current market capitalisation of approximately
A$950M (C$850M) and is one of only two nickel companies listed on both the
Australian and Toronto Stock Exchanges. (ASX & TSX code: WSA)
The company's core asset is the 100% owned 90km long Forrestania Nickel
Project, located 400km east of Perth, Western Australia. The primary
discovery, Flying Fox, is one of the highest grade nickel mines in the world.
The current total mineral resource comprises approximately 1.4M tonnes at an
average grade of 6.5% nickel containing 90,500 tonnes of nickel. Underground
production from the Flying Fox mine commenced in October 2006 with forecast
product targeted at 13,000 tonnes of nickel in concentrate per annum by 2010.
A pre-feasibility study is well advanced to bring a second mine into
production at Diggers South, 40km south of Flying Fox. If positive, Diggers
South has the potential to add in excess of 5,000 tonnes of nickel in
concentrate per annum to overlap Flying Fox production to increase total
targeted production to 18,000 tonnes of nickel in concentrate per annum by
2010. Previously announced mineral resources at Diggers South contain
approximately 80,300 tonnes nickel and drilling to extend this mineral
resources is ongoing.
Exploration continues to remain a top priority for Western Areas with
total mineral resources at the Forrestania Nickel Project recently revised to
contain approximately 208,600 tonnes nickel (refer to recent announcements).
In addition to the focus on expanding Flying Fox and Diggers South
mineral resources, there are number of high priority targets to be tested
along strike from Flying Fox - notably below the current limit of drilling at
the New Morning/Daybreak deposits, 3km south of Flying Fox. Additional
potential also exists along the eastern nickel belt at Forrestania and at
WSA's other exploration projects in the Forrestania region. Western Areas also
recently commenced drilling at the Lynn Lake nickel project in Manitoba,
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, downhole 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 and mine
development activities 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. These 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 statements.
This announcement does not include reference to all available information
on the Company or the Forrestania Nickel Project or the Lynn Lake 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 Company.
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: visit www.westernareas.com.au or contact:
Julian Hanna, Managing Director, Western Areas Telephone: +61 8 9486 7855,
Email: email@example.com; Ann Nahajski, Investor Relations, Porter
Novelli, Telephone +61 8 9386 1233, Email: firstname.lastname@example.org;
Craig Oliver, Finance Director, Western Areas, Telephone: +61 8 9486 7855,
Email: email@example.com; Eric Tang, Investor Relations, Porter
Novelli, Telephone (416) 423-6605, Email: firstname.lastname@example.org