/THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR
FOR DISSEMINATION IN THE U.S./
ASX & TSX: WSA
WEST PERTH, Western Australia, Feb. 1 /CNW/ - Western Areas today
released the December 2008 Quarterly Activities Report. The report outlined
the progress during the quarter towards achieving the Company's goal to become
a mid tier nickel producer with target production of 30,000 to 40,000 tonnes
nickel p.a. by 2011. Highlights for the quarter included:
- Assays received today from Spotted Quoll drill hole WBD028 -
8.7m @ 11.4% nickel from 88.2m down hole depth. This result is
considered very significant - it is the first intersection at
Forrestania with all assays greater than 10% nickel and it occurs at
shallow depth. Spotted Quoll remains open in all directions - two
drill rigs are on site and a third is due to arrive in mid February.
Flying Fox Highlights:
- T1 mining commenced on 19 November 2007. In the six weeks of first T1
production 8,614 tonnes at 4.19% Ni was mined. Invoiced production
was 7,510t at 4.33% Ni with 91.5% metallurgical recovery. C1 cash
costs per lb Ni in concentrate for T1 were A$3.38 in November and
A$2.83 in December.
- Production from Flying Fox scheduled to target 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 up to
15m wide which contain a total greater than 180,000 tonnes ore at
5.1% nickel containing 9,200t nickel. Mining of these stope blocks
expected to start in March/April.
- The mine decline is at 480m depth and is expected to access T4 in
December 2008. The initial study for a raise bored shaft to increase
ore haulage capacity from deeper deposits in the mine is due for
completion in the March quarter.
- Assuming decline access only (i.e. without haulage shaft) production
is forecast to increase to 10,000 tpa nickel in CY 2009 and
12-14,000 tpa nickel in CY 2010 with overlapping production from T1,
T4 and T5 deposits.
- Western Areas hedge book was restructured in December Q with only
740 tonnes of nickel remaining hedged. From the start of the June Q
all production will be sold at spot price coinciding with increased
production from Flying Fox.
- Positive drilling results continue at Flying Fox where the target is
a 50% increase in total mineral resources to 150,000t nickel by the
end of 2008.
- Revised interpretation of Flying Fox highlights the excellent
continuity of nickel sulphide over a wide area. Below T1,
mineralisation now extends greater than 700m vertical extent in a
zone up to 600m wide to the limit of drilling.
- Flying Fox operations are already cash flow positive. Western Areas
holds $A172M cash and a $A82M debt facility which is drawn to $A54M,
more than required to fund all planned activities of the Company for
2008 and 2009.
Other Mine Developments:
- The Main components for Diggers South pre feasibility study are
complete. The feasibility study is underway. Western Areas is
currently seeking offtake terms for the sale of nickel concentrate to
complete the commercial part of the study.
- Surface earthworks for the Stage One concentrator at Cosmic Boy are
complete with construction due to start at the end of March.
The Quarterly Report in its entirety can be viewed at
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 the revised Mineral
Resources was prepared by Ms Sharron Sylvester and the information as it
relates to exploration and proposed corporate activities is based on
information compiled by Mr Julian Hanna. Ms Sylvester is a member of AIG and
Mr Hanna is a member of AusIMM. Ms Sylvester and Mr Hanna have sufficient
experience which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which each is undertaking to
qualify as Competent Persons as defined in the 2004 Edition of the
'Australasian Code for Reporting of Exploration Results, Mineral Resources and
Mr Hanna and Mr Black consent 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 including nickel production targets. 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
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 9334 7777, Email: email@example.com; Craig
Oliver, FINANCE DIRECTOR - Western Areas NL, 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;
Or visit: www.westernareas.com.au