WSA announces the Forrestania nickel concentrate plant go ahead


    ASX & TSX: WSA

    WEST PERTH, Western Australia, Sept. 26 /CNW/ - The Board of Western
Areas has announced a decision to proceed with construction of a nickel
concentrate plant at Cosmic Boy, in the centre of the 100% owned Forrestania
Nickel Project.
    Final engineering design drawings for the Stage One plant are complete,
statutory permitting has been received and the site has been cleared for
construction. The Company is putting the plant construction out for tender
with work expected to commence at the start of 2008.
    Western Areas has already acquired the major components for the plant
including a crushing circuit, ball mill, conveyor system, flotation cells and
filtration circuit. Major existing infrastructure at Cosmic Boy includes grid
power, a large tailings storage facility ("TSF"), borefields, water storage
dams and an ore bin. The Cosmic Boy village is currently being expanded from
180 to 280 rooms to provide accommodation for the plant construction and the
anticipated development of the Company's second mine at Diggers South, 15km to
the south.
    The Stage One concentrate plant is designed with 250,000 tpa capacity and
will initially treat ore from the high grade Flying Fox nickel mine. The
proposed Stage Two plant will have 650,000 to 700,000 tpa capacity and is
intended to treat ore from Flying Fox, Diggers South and potentially the New
Morning/Daybreak and Cosmic Boy deposits. Following the successful convertible
bonds issue in June 2007, the Company has sufficient funds available for the
two stage plant construction as well as for the development of Diggers South.
    Western Areas is currently toll treating Flying Fox ore at Norilsk's Lake
Johnston concentrate plant, 90km east of Flying Fox. The terms of this toll
treatment form part of the Ore Tolling and Concentrate Purchase Agreement
("OTCPA") executed with LionOre Australia (Nickel) Limited, now Norilsk
Australia Nickel Pty Ltd. The OTCPA provides Western Areas with the
flexibility to sell nickel either in ore or concentrate to Norilsk on
favourable terms.
    Benefits from constructing a plant at Cosmic Boy include:
      -  Ownership and management of the concentrate process
      -  Ability to improve metallurgical recoveries
      -  Ability to blend high and low grade ores from a number of deposits
      -  Reduced ore transport costs from Diggers South
      -  Potential to significantly increase profitability
    Western Areas has now consolidated the wider Forrestania region with
major interests in five nickel belts Forrestania, Koolyanobbing, Bullfinch,
Lake King and Mt Finnerty.
    The Board believes that the decision to build a central concentrate plant
will establish Forrestania as a major nickel province producing ore from a
number of sources. The concentrate plant will be a significant asset which is
expected to underpin the future of the Company. The concentrate plant is one
of a number of growth initiatives planned in the area.

    Flying Fox - Mine Development

    The Flying Fox mine is continuing to perform above budget with the main
decline now in the footwall of the high grade T1 orebody. First production
from T1 will come from an area defined by previously announced drill hole
intersections, which include:

        17.2m @ 6.7% nickel
        11.7m @ 7.3% nickel
        6.6m @ 7.5% nickel

    Production from T1 is expected to commence early in the December quarter.

    Flying Fox - T4, T6 and T7 drilling programs

    A release on the progress of the T4, T6 and T7 drilling programs is
expected early next week.


    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 included in this release
is 'intended to treat ore from Flying Fox, Diggers South and potentially the
New Morning/Daybreak and Cosmic Boy deposits.' 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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