WSA announces: Flying Fox mine and exploration update


    ASX & TSX: WSA

    WEST PERTH, Western Australia, June 5 /CNW/ - The Board of Western Areas
is pleased to announce the following significant updates at a number of areas
in the 100% owned Forrestania Nickel Project:

    Flying Fox - Mine Development and Ore Production

    Significant progress was achieved at Flying Fox in May. A total of
7,200 tonnes of stoping and development ore were mined during the month.
Approximately 18,000 tonnes of Flying Fox ore have been treated at LionOre's
Lake Johnston concentrate plant since production commenced at the end of 2006.
    Production should increase to 10,000-15,000 tonnes per month when the
large, high grade T1 ore body is accessed during the December quarter. The
Flying Fox decline is progressing well with monthly advance rates in line with
forecast. A new jumbo drill rig and other new underground equipment will
arrive on site next week and are expected to improve the decline advance rate

    Flying Fox - Ore Reserve and Mineral Resource upgrades

    Over the past few months drilling at Flying Fox has been focused on
increasing the ore reserves at the T1 and T2 deposits. The T1 ore reserve
announced previously (containing 15,000 tonnes nickel) was estimated assuming
a nickel price of US$5.50/lb compared with the current price of around
US$22/lb nickel. An ore reserve upgrade for the T1 and T2 deposits resulting
from mine design optimisations is expected to be announced in August.
    Two drill rigs are currently drilling at T1 and T2. Recent drilling
results have been very positive confirming and extending areas of nickel
mineralisation defined previously. Results include an intersection of 3.5m of
stringer and matrix sulphides (assays awaited) in drill hole FFD 161W3 in a
previously untested area above T1. Further drilling is planned in this area.
    An additional surface drill rig is expected to commence at Flying Fox in
early June bringing the total at Forrestania to four surface and one
underground drill rigs. The new drill rig will be used to test for extensions
to the T4 deposit and to define a mineral resource at this deposit.

    Flying Fox - Exploration

    Drilling will commence soon to test the potential for the "T6" deposit
below the fault at the base of T5. T5 is one of the highest grade nickel
deposits in the world and consists of a Probable Ore Reserve of 843,000 tonnes
at 5.9% nickel (estimated at a nickel price of US$5.50/lb) plus an Inferred
Mineral Resource of 164,000 tonnes at 6.8% nickel. Drill hole intersections
near the base of T5 announced previously include down hole widths of 21.8m @
5.7% nickel, 16.1m @ 9.7% nickel, 10.3m @ 8.0% nickel and 13.0m @ 9.2% nickel.
    The potential for "T6" is considered to be excellent. High grade massive
sulphides have been intersected almost continuously over 900m vertical depth
extending from the top of the Outokumpu Mine to the limit of Western Areas
drilling at the base of T5. The massive sulphide mineralisation is offset by
four late stage horizontal faults intruded by granite.

    Diggers South - Ore Reserve and Pre-Feasibility Study

    An ore reserve estimate and the results of the pre-feasibility study for
the Diggers South deposit are expected to be released within the next two
weeks. A decision to mine Diggers South is expected by the end of 2007.

    Diggers South - Exploration

    Drilling is in progress to test the potential for significant high grade
massive nickel sulphide mineralisation below the large Diggers South deposit.
Two previously announced drill holes intersected massive sulphide with assays
up to 7.8% nickel occurring at the base of the cumulate ultramafic channel
which hosts the disseminated Diggers South mineralisation.
    Diggers South has current mineral resources which contain 80,300 tonnes
nickel as disseminated and stringer sulphides. The deposit remains open along
strike and at depth.

    Cosmic Boy - Infrastructure

    A major expansion of the Cosmic Boy village is required for the
anticipated mine development at Diggers South in 2008. The village currently
has 180 en-suite rooms and is fully occupied. An additional 100 rooms are
planned to be installed during the next six months

    The full report with extended commentary and diagrams can be viewed at
    the company website

    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 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:; Craig
Oliver, Finance Director - Western Areas NL, Telephone +61 8 9486 7855, Email:; Ann Nahajski, Investor Relations - Porter
Novelli, Telephone +61 8 9386 1233, Email:;
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