Western Areas NL
TSX : WSA
ASX : WSA

Western Areas NL

August 05, 2008 08:00 ET

Western Areas Announces High Grade Nickel Continues at Spotted Quoll

PERTH, AUSTRALIA--(Marketwire - Aug. 5, 2008) - Western Areas NL (TSX:WSA)(ASX:WSA)

THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Drilling at Spotted Quoll between 200m and 500m depth has continued to produce outstanding high grade nickel intersections in all the drill holes for which assays have been received. The results indicate strongly the potential for a major underground mine below the proposed open pit. A revised mineral resource estimate below 200m is due to be released in late August.

Three drill rigs are testing for extensions below the previously announced mineral resource which comprises 545,600 tonnes at an average grade of 6.3% nickel to 200m depth. A scoping study for an open pit mine to 160m depth indicates potential to produce up to 8,000 tonnes of nickel per annum with production expected to start in mid 2009. The estimated cash cost is US$1.50/lb nickel which would probably make it the lowest cost nickel mine in Australia.

A fourth drill rig is testing the Dooley's Find prospect 300m south Spotted Quoll. This is near the large Willy Willy lava channel, interpreted to be the source of the nickel in this area.

Recent drill hole intersections at Spotted Quoll include:



WBD 67 3.8m @ 6.5% nickel from 311.9m down hole depth
WBD 77 8.0m @ 5.6% nickel from 200.3m down hole depth
WBD 79 3.6m @ 7.4% nickel from 314.1m down hole depth
WBD 80 2.6m @ 12.4% nickel from 162.7m down hole depth
WBD 85 6.8m @ 8.1% nickel from 99.3m down hole depth
WBD 92 5.2m @ 5.2% nickel from 320.2m down hole depth
WBD 101 10.3m @ 5.2% nickel from 291.2m down hole depth


In addition, the deepest drill hole to date WBD 68 intersected 2.4m @ 4.8% nickel (including 1.1m @ 7.7% nickel) from 464.0m depth. This intersection is 190m down dip from any other drill hole at Spotted Quoll. Drilling will focus on this area in the December quarter.

Discussion

Spotted Quoll is located only 6km south of the Flying Fox mine which has the highest grade reported ore reserves of any nickel mine in the world. The estimated cash cost of production at Flying Fox from the T1 and T5 deposits only (excluding T4, T6 and T7) is US$2.50/lb nickel.

Spotted Quoll is also showing early signs of developing into a major underground mine:

1. The majority of intersections have nickel grades between 5% and 12% nickel

2. The high grade mineralisation is very continuous in the area drilled to date

3. The massive and matrix sulphide mineralisation is open at depth and along strike

4. Preliminary testwork indicates high metallurgical recoveries from most ore types

5. Spotted Quoll will benefit from shared infrastructure (power, roads, plant, village)


Western Areas' Managing Director, Mr Julian Hanna said "We are very fortunate with the high grades and size of our nickel deposits. This translates into low cost, long life mining operations which should generate strong profits for shareholders through many nickel price cycles."

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, down hole 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 or mineral resources 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. Examples of forward looking statements used in this release are: 'A scoping study for an open pit mine to 160m depth indicates potential to produce up to 8,000 tonnes of nickel per annum with production expected to start in mid 2009. The estimated cash cost is US$1.50/lb nickel which would probably make it the lowest cost nickel mine in Australia.' and 'The estimated cash cost of production at Flying Fox from the T1 and T5 deposits only (excluding T4, T6 and T7) is US$2.50/lb nickel.', and 'This translates into low cost, long life mining operations which should generate strong profits for shareholders through many nickel price cycles.' 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 Spotted Quoll 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.

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