Western Areas NL

Western Areas NL

April 23, 2008 08:00 ET

Western Areas Announces Significant Nickel/Copper Intersections at Lynn Lake, Manitoba

PERTH, AUSTRALIA--(Marketwire - April 23, 2008) -


Western Areas (TSX:WSA)(ASX:WSA) today announced significant nickel, copper and cobalt results from initial diamond drilling at the Melville prospect at the Lynn Lake Nickel Project in northern Manitoba. Drill hole LL015 intersected 18m at an average grade of 1.5% nickel, 0.7% copper and 0.04% cobalt from 96m down hole depth. Two additional drill holes, LL016 and LL017 also intersected significant widths of nickel and copper mineralisation with details summarised in this release.

The intersection in LL015 occurs at only 85m vertical depth and is hosted by a coarse grained gabbro intrusion. The geology and mineralisation appears similar to the high grade nickel/copper "EL" mine 3km to the south and at the "A" and "Farley" underground nickel mines, 1km to the west. Western Areas' previous drilling at Lynn Lake has focussed on testing extensions to the EL Mine. Canadian listed company, Independent Nickel Corporation, has focussed on testing nickel deposits along the A and Farley mine trend on mining leases adjacent to Western Areas 100% optioned leases.

Importantly, the intersection in LL015 occurs on the southern margin of a large coincident magnetic and VTEM anomaly located within Western Areas leases. Drilling is planned to resume in May to determine the geometry and potential extent of the nickel/copper mineralisation at Melville and to test the source of the coincident magnetic and VTEM anomaly located immediately north.

Drilling Results

The recent drilling program at Melville was designed to follow up a brief reference to drill hole (DDH Tail-7) drilled by Sherritt Gordon in 1979, which "intersected 19.9 feet of core length assaying 1.03% Ni & 0.44% Cu". Western Areas' Overseas Exploration Manager, Mr Robert Barwick, located the original drill hole, recognised the untested potential of the coincident magnetic and VTEM anomaly and conducted the initial drilling program which has resulted in this significant discovery.

Four diamond drill holes have been completed by Western Areas at Melville to date. Three intersected greater than 18m downhole widths of stringer, vein and disseminated nickel and copper sulphides confirming the continuity of the mineralisation. Assay results have been received for three of these drill holes which are summarised as follows. Assay results for platinum group elements (PGE) are awaited:

- LL015: intersected 18m @ 1.5% nickel, 0.7% copper and 0.04% cobalt from 96m down hole.

- LL016: drilled from LL015 collar, 20 degrees to the east: intersected 20m of stringer, vein and disseminated nickel and copper sulphides from 60m down hole. Assay results are pending.

- LL017: drilled from LL015 collar, 20 degrees to the west: intersected 22m @ 0.7% nickel, 0.4% copper and 0.02% cobalt from 67m down hole depth.

- LL018: drilled below LL015 intersected 5m @ 1.1% nickel, 0.6% copper and 0.03% cobalt from 86m down hole depth. LL018 steepened and missed the main zone intersected in LL015.

Drill hole collar coordinates:

LL015 MELVILLE 153.01 340 -65 376489.00 6302211.00
LL016 MELVILLE 140.82 0 -65 376489.50 6302211.00
LL017 MELVILLE 128.63 320 -65 376488.50 6302211.00
LL018 MELVILLE 223.11 340 -71 376489.00 6302211.00


Western Areas' Managing Director, Mr Julian Hanna, said "We are very encouraged by these results which confirm the excellent potential for discovering new nickel/copper deposits at Lynn Lake. The results also support the Company's strategy to test a number of previously unexplored coincident magnetic and VTEM targets for repetitions of the high grade EL Mine type deposit." Mr Hanna added, "Canada remains a high priority for Western Areas growth plans due to the quality of our current projects in Manitoba, the excellent potential for new nickel discoveries and the large investor base which is available to the Company in North America."

The Melville prospect is located on the east side of a large gabbro intrusion which hosts most of the ore bodies mined by Sherritt Gordon between 1953 and 1976. Lynn Lake was Canada's third largest nickel camp during this period. Sherritt Gordon mined approximately 20 million tons of ore at an average grade of 1.0% nickel and 0.5% copper, producing concentrates containing a total of approximately 166,100t nickel, 94,800t copper and 1,700t cobalt.

Western Areas has an option agreement to acquire 100% interest in a large area of mining leases located immediately east and south of the area held by Independent Nickel Corporation.

To view the full release including diagrams visit our website: www.westernareas.com.au.

QA QC STATEMENT: Mr Robert Barwick from Western Areas is responsible for the verification and quality assurance of the Company's exploration data and analytical results from the Lynn Lake Nickel Project. Surface diamond drill hole collar surveys used a Garmin GPS with an error of +/- 5m. Samples of half core from the drill holes described in this release are prepared and analysed by ALS Chemex in Vancouver 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 ME-OG62 method. The information within this report as it relates to exploration results is based on information compiled by Mr Julian Hanna from information supplied by Western Areas Exploration Manager, Mr Barwick. 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 in this release is: 'Drilling is planned to resume in May to determine the geometry and potential extent of the new nickel/copper mineralisation at Melville and to test the source of the coincident magnetic and VTEM anomaly located immediately north'. 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 Lynn Lake 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. Also, reference in this release to three VMS deposits at Lynn Lake containing estimates of zinc and copper mineralisation are based on previous other company estimates and announcements only and do not constitute Mineral Resources.

About Western Areas NL

Western Areas is an Australian-based nickel sulphide explorer and producer listed on the ASX and TSX. The Company is targeting production of 35,000 tonnes nickel p.a. by 2011. The Company's core asset is the 100% owned Forrestania Nickel Project, located 400km east of Perth, Western Australia.

The primary discovery, Flying Fox, is one of the highest grade nickel mines in the world. Total Mineral Resources comprise 1.5 million tonnes at an average grade of 6.2% nickel containing approx. 95,600 tonnes of nickel. The 2008 target is to increase mineral resources at Flying Fox to greater than 150,000 tonnes of contained nickel. Production is in progress from the T1 ore body where production is expected to reach 8,000 tonnes nickel in CY 2008 and is scheduled to ramp up to 14,000 tpa nickel as the deeper T4 and T5 deposits are brought into production.

In October 2007, the high grade Spotted Quoll deposit was discovered at shallow depth 6km south of Flying Fox. On 18 April 2008 the first mineral resource was announced at Spotted Quoll to a depth of 200m. This comprises a total 545,600 tonnes at an average grade of 6.3% nickel containing 34,500 tonnes nickel with 87% in the high confidence Indicated Mineral Resource category. Western Areas has announced plans to fast track Spotted Quoll into early production and drilling is now underway to test for extensions to this deposit between 200m and 400m depth. The second drill hole in this extension program (announced on 7 April 2008) intersected 17.3m at an estimated grade of 9.8% nickel (Niton analyses).

A feasibility study is underway to bring a second mine into production at Diggers South, 40km south of Flying Fox. Permitting is well advanced and the target for a decision to mine is the end of the June Q. Scoping and feasibility studies for additional mines at New Morning and at Cosmic Boy are in progress and construction of a 250,000tpa nickel concentrate plant at Cosmic Boy has commenced. Recent discoveries include the Flying Fox T6 and T7 deposits in 2007.
The Company has substantial regional holdings in the Central Yilgarn Nickel Province in Western Australia and is exploring seven nickel projects extending over 500km from the Sandstone JV in the north to the Lake King JV in the South.

Western Areas also has interests in 3 substantial projects in Manitoba Canada including Lynn Lake, McBride Lake and an 18% interest in Canadian listed Mustang Minerals Corporation.

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