Western Areas announces new high grade nickel discovery at Forrestania


    ASX & TSX: WSA

    WEST PERTH, Western Australia, Oct. 16 /CNW/ - The Board of Western Areas
is pleased to announce what appears to be a significant new high grade nickel
discovery in the first diamond drill hole (WBD 18) at the recently named
'Spotted Quoll' prospect, 6km south of the Flying Fox Mine.
    Preliminary results from a 4.6m zone of primary sulphides produced an
average grade of 4% nickel with values up to 9% nickel. The results are
considered to be very significant and suggest potential for another nickel
deposit of the Flying Fox 'type'. The nickel grades are indicative estimates
based on 46 Niton readings taken on the drill core.
    Drill hole WBD 18 is the first to test a surface EM anomaly which was
identified in November 2006. WBD 18 intersected 6.6m of sulphides from 118.9m
down hole depth including a 4.6m zone of strong matrix sulphides from 121.0m
down hole depth. The sulphide zone dips to the east below an interpreted
cross-cutting granite intrusion, similar to Flying Fox. Spotted Quoll is
located 6km south of Flying Fox and 3km south of New Morning/Daybreak along
the same geological contact which hosts these high grade massive nickel
sulphide deposits.
    Preliminary analysis of the 4.6m sulphide zone was undertaken using a
portable Niton XRF analyser with systematic readings at 10cm intervals. Higher
grade spot readings within the sulphide zone include 6.6%, 7.5% 7.1% and 9.1%
nickel. Core samples are being sent for independent assay to confirm the Niton
results and will be announced as soon as possible.
    Managing Director, Mr Julian Hanna, said "These results are an exciting
new development for Western Areas. They add further support to our view that
Forrestania is a world class nickel province with potential to produce nickel
from several mines over many years."
    "The Spotted Quoll discovery is the result of some very clever detective
work and persistence by our geological consultants Newexco led by Adrian Black
and Bill Amann. The surface EM anomaly targeted in drill hole WBD 18 was
dominated by a much stronger conductor to the east produced by overlying
barren sediments. Previous drilling by Amax in the early 1970's tested the
overlying sequence and stopped just short of the new nickel sulphide zone."

    The intersection in WBD 18 is significant for a number of reasons:

        1. It opens up potential for another deposit of similar type to
           Flying Fox and New Morning/Daybreak

        2. It is the first time high grade primary nickel sulphides have been
           discovered at shallow depth (~100m) at Forrestania in fresh,
           unoxidised host rocks.

        3. It confirms the potential for further discoveries along the
           Western Nickel Belt which extends for 25km within Western Areas

        4. It highlights the effectiveness of the exploration techniques and
           geological models being used at the Forrestania project.

    A down-hole EM survey of WBD 18 will be carried out as soon as possible.
This should assist interpreting the new sulphide zone to plan the follow up
drilling program.

    Current Diamond Drilling and EM Programs

    The recent results at Spotted Quoll highlight the success that is being
achieved at a number of projects in the current exploration campaign. The
A$225 million funds raised by Convertible Bonds issued in June 2007 has
enabled Western Areas to increase the rate of drilling and geophysical surveys
to test a wide range of priority targets in Australia and Canada.

    Diamond drilling programs in progress in the following areas:

        1. Flying Fox T1 infill underground diamond drilling to confirm high
           grade ore reserves ahead of initial T1 production expected next

        2. Flying Fox T4 testing south of the current limit of drilling and
           following up recent intersections 6.5m @ 6.5% Ni and 9.3m @
           5.1% Ni

        3. Flying Fox T6/T7 third drill hole underway to follow up on
           previously announced massive sulphide intersections and multiple
           EM conductors

        4. Digger Rocks resource drilling underway for Stage One open pit -
           part of proposed three stage Diggers South mine development

        5. Jocks Dream 150km north of Forrestania - drilling underway below
           previous shallow RC drill hole intersections with up to 4% nickel

        6. Lynn Lake drilling underway below Sherritt Gordon's previous high
           grade 'EL' nickel/copper/cobalt mine in northern Manitoba

    EM, IP or helicopter VTEM surveys planned during the December quarter:

        1. Spotted Quoll down hole EM to help define geometry of new sulphide

        2. Flying Fox T6/T7 down hole EM to extend coverage for current
           drilling program

        3. Lake King IP survey to test south of recent nickel sulphide

        4. Mt Finnerty surface EM survey over nickel/copper soil geochemical

        5. McBride Lake VTEM to test for extensions to 8% zinc deposit in

        6. Copper Hills regional airborne EM survey to define base metal

    Preliminary results from these drilling and geophysical programs are
expected throughout the December quarter. Details of these projects have been
included in previous releases.

    Flying Fox - Mine Production and Development

    7,000 tonnes of ore was mined from the T Zero ore body during September,
in line with expectations. Mine development is continuing at above forecast
rates with approximately 280m of total mine development completed in
September. A cross cut from the main decline is currently being developed to
access the large, high grade T1 ore body in November.

    The full news release including pictures can be viewed at the Western
Areas website at www.westernareas.com.au.


    Note: The nickel grade estimates for drill hole WBD 18 quoted in this
release are indicative only and have been estimated using a NITON XLt 592
portable analyser which is not JORC compliant.

    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 results,
mineral resources or ore reserves 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 'adds
further support to our view that Forrestania is a world class nickel province
which has potential to produce nickel from several mines over many years.'
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 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
NL, Telephone +61 8 9486 7855, Email: jhanna@westernareas.com.au; Craig
Oliver, Finance Director - Western Areas NL, Telephone +61 8 9486 7855, Email:
coliver@westernareas.com.au; Ann Nahajski, Investor Relations - Porter
Novelli, Telephone +61 8 9386 1233, Email: anahajski@wa.porternovelli.com.au;
Or visit: www.westernareas.com.au

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