Western Areas NL
TSX : WSA
ASX : WSA

Western Areas NL

October 27, 2009 08:00 ET

Western Areas Announces September 2009 Quarterly Activities Report

PERTH, AUSTRALIA--(Marketwire - Oct. 27, 2009) - Western Areas (TSX:WSA)(ASX:WSA) -

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

Major progress was made at the Forrestania Nickel Project during the September quarter. Western Areas reported record nickel sales; there was an 11% increase in mineral resources at Flying Fox and mine development commenced at Spotted Quoll. Additionally site works commenced for the expansion of the nickel concentrator and further high grade nickel was discovered below the current mineral resource at Spotted Quoll. Western Areas announced an option to acquire the BioHeap leaching technology to treat lower grade ores and new projects in Finland.

The Board believes the Company is in a strong position to benefit from strengthening nickel prices and to generate significant cash flow from the Flying Fox and Spotted Quoll mines. Western Areas had A$90.5M cash (an increase of A$10.3M from the 30 June) at the end of the quarter. In addition, receivables increased to A$21.6M and ore and concentrate stockpiles at cost were valued at A$23.3M at end of the quarter.

Highlights - Operations

1. Record sales of 2,782 tonnes nickel in concentrate sold to BHP Billiton at average price of US$8.02/lb Ni, 36% above the price for the June quarter.

2. Production in line with guidance at 60,064 tonnes processed at 3.8% Ni with 91.5% recovery. Contained nickel in stockpiles comprised approximately 2,500 tonnes nickel at the end of the quarter with 1.5 months ore in stockpiles.

3. Construction is underway to increase the capacity of the nickel concentrator at Cosmic Boy to 550,000 tpa expected to be complete in March 2010.

4. Flying Fox mineral resource excluding Lounge Lizard increased 11% (after mining depletion) to 1.58Mt @ 6.0% nickel containing 95,370 tonnes nickel.

5. Recent intersections at Flying Fox include 7.6m @ 10.5% Ni, 8.7m @ 9.2% Ni and 8.9m @ 7.4% Ni. New interpretation highlights further potential.

6. Mine development commenced at the recently named Tim King Pit at Spotted Quoll. Ore reserve contains 19,900 tonnes nickel at average grade of 5.1% Ni.

7. Drilling below mineral resource at Spotted Quoll (2.0Mt @ 6.2% Ni for 125,500t Ni) intersected 3.4m @ 5.2% and 2.3m @ 3.6% nickel in a new zone.

8. Encouraging nickel results from initial drilling program at Sandstone joint venture, 500km north of Forrestania. Drilling to resume in December Q.

9. High safety and environmental standards maintained on Forrestania site. One LTI (Lost Time Injury) reported during the quarter.

Discussion - Strategy

1. With long term production now well established at Flying Fox and mine development underway at Spotted Quoll, the Company's focus is clearly on increasing profits and production from these two high quality mines.

2. Western Areas' Board remains focused on discovering another high grade deposit at Forrestania or at one of the other six projects in Western Australia.

3. In line with the BioHeap strategy, Western Areas entered agreements for projects in Finland considered to have excellent potential for 'Talvivaara Type' deposits. Talvivaara is a large nickel/zinc/copper bacterial leaching project.

The full activities report can be viewed at the Company's website www.westernareas.com.au

QA-QC STATEMENT:

Mr Adrian Black from geological consultants Newexco Services Pty Ltd ("Newexco") and Mr Charles Wilkinson from Western Areas are 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 mineral resources and mine development activities is based on information compiled by Mr John Haywood, Mr Dan Lougher and Mr Julian Hanna of Western Areas NL. Mr Haywood, Mr Lougher and Mr Hanna are members of AusIMM and are full time employees of the Company. Mr Haywood, Mr Lougher 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 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 Haywood, Mr Lougher and Mr Hanna 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 shown in Figure 8. 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.

Examples of forward looking statements used in this report include: "Company is in a strong position to benefit from strengthening nickel prices and to generate significant cash flow from the Flying Fox and Spotted Quoll mines", and "considering a range of alternatives to increase the rate of drilling to discover another high grade deposit and fund the Company's growth without impacting profits expected from Flying Fox and Spotted Quoll", and "The Arrowhead prospect is regarded as a high priority for deeper drilling by the site based geologists", and "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".

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. 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.

Contact Information