Western Areas NL
TSX : WSA
ASX : WSA

Western Areas NL

October 12, 2009 08:00 ET

Western Areas Announces Mine Development Commences at Spotted Quoll Only Two Years Since Discovery

PERTH, AUSTRALIA--(Marketwire - Oct. 12, 2009) -

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

The Board of Western Areas (TSX:WSA)(ASX:WSA) is pleased to announce that mine development at Spotted Quoll has commenced. The initial openpit mine at Spotted Quoll has been named the "Tim King Pit" after Timothy King, a founding Director of Western Areas. Tim made an important contribution to the early formation of Western Areas but sadly he passed away two years ago. The Board believes that naming this wonderful mine after Tim King is an appropriate recognition of the energy, enthusiasm and vision he brought to the Company.

The commencement of development at Spotted Quoll comes only two years after the first discovery drill hole. On 16 October 2007, Western Areas announced "New High Grade Nickel Discovery at Forrestania" when the first drill hole WBD 18 intersected 6.2m @ 4.8% nickel from 120m down hole depth. Since then the project has achieved many milestones:



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16 October 2007 Discovery of Spotted Quoll
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1 February 2008 Drilling intersects 8.7m @ 11.4% nickel
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18 April 2008 First mineral resource - 34,500t nickel
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16 May 2008 Scoping study for open pit mine
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2 September 2008 Second mineral resource - 75,000t nickel
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12 January 2009 Third mineral resource - 125,500t nickel
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12 February 2009 First ore reserve for open pit mine
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21 May 2009 Newexco awarded Prospector of the Year
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18 September 2009 Minister grants consent to mine
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9 October 2009 Mine development starts at Tim King Pit
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The rapid progress of Spotted Quoll from discovery to development is the result of the hard work and professionalism of Western Areas' exploration, development, metallurgical and environmental staff and consultants. The Board appreciates the support of State and Federal regulatory authorities and relevant State Ministers who were involved in the approvals process.

Mr Peter Cullinan has been appointed Infrastructure Manager and Mr Chris Pyke has been appointed Open Pit Manager for the mine. Mining and Civil Australia has been appointed as the mining contractor. Development of surface infrastructure and an access road to the Tim King Pit has commenced. Considerable effort is also being made to preserve as much of the native vegetation as possible around the mine site.

The announced ore reserve within the pit contains 19,900 tonnes nickel at an average grade of 5.1% nickel, which will place it as one of the highest grade open pit nickel mines in Australia. Production is expected to commence in March/April 2010 and will continue for two years.

The ore reserve in the Tim King Pit represents only 16% of the contained nickel within the current announced mineral resource at Spotted Quoll which contains 125,500 tonnes nickel at an average grade of 6.2% nickel. A feasibility study is in progress for the proposed underground mine which is planned to be accessed from the pit. An initial ore reserve for the underground mine is expected to be announced in early 2010.

Spotted Quoll - Exploration Update

Drilling has produced another high grade intersection 600m down dip below the current mineral resource, at approximately 1000m vertical depth. Drill hole WBD 157 W3/W1 intersected 0.8m @ 5% nickel (preliminary Niton estimate) 50m south of a 1.7m intersection at similar grade plus a wider zone of disseminated and stringer mineralisation. Drilling is now targeting this new zone which appears to plunge directly below the mineral resource. Previous interpretations assumed a northerly plunge to the mineralisation. Although still at an early stage, these recent drilling results are considered to be very encouraging.

A seismic survey of the Spotted Quoll area is in progress to define the 3D geometry of the mineralised contact and identify potential new zones of massive sulphide. As a result of the excellent results from the survey to date, seismic coverage is now being extended to provide data down to 1500m depth. If the seismic survey identifies additional targets at Spotted Quoll, it is likely to be extended elsewhere along the 25km long Western Nickel Belt at Forrestania.

The full report including photos and diagrams can be viewed at the Company's website www.westernareas.com.au

QA-QC STATEMENT:

The information within this report as it relates to exploration results or mineral resources or ore reserves is based on information compiled by Mr Julian Hanna and Mr Tim Peters. Mr. Hanna is a member of AusIMM and is a full time employee of the Company and Mr Peters is also a member of AusIMM and is employed by Piran Mining PL, consultants of the Company. Mr. Hanna and Mr Peters have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.' Mr. Hanna and Mr Peters consent to the inclusion in the report of the matters based on the information in the form and context in which it appears.

Niton values for nickel included in this report are preliminary estimates only and require confirmation by formal assays.

FORWARD LOOKING STATEMENT:

This release contains certain forward-looking statements. Examples of forward looking statements used in this release are: 'average grade of 5.1% nickel, which will place it as one of the highest grade open pit nickel mines in Australia. Production is expected to commence in March/April 2010 and will continue for two years.' and, 'A feasibility study is in progress for the proposed underground mine which will be accessed from the pit. An initial ore reserve for the underground mine is expected to be announced in early 2010'.

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 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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