Western Areas NL
TSX : WSA
ASX : WSA

Western Areas NL

September 18, 2009 08:00 ET

Western Areas NL: Final Consent for Spotted Quoll Open Pit Mine and Drilling Intersects High Grade Extensions

PERTH, AUSTRALIA--(Marketwire - Sept. 18, 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 two important events at the Spotted Quoll deposit which is the Company's second high grade nickel mine, after Flying Fox:

1. Final consent has now been granted by the Western Australian Minister for the Environment for the Spotted Quoll open pit mine. Construction of site infrastructure will now commence and the pre-strip of the open pit will begin in October. First ore production is expected in March\April 2010.

2. Drilling 600m down dip below the current mineral resource has intersected more high grade nickel sulphides in a similar geological setting to the existing mineral resource. Drill hole WBD 157W3 intersected 1.7m @ 4.6% nickel (Niton estimate) at 1,000m vertical depth (1,500m down dip from surface). WBD 157W3 confirms the exceptional continuity of the mineralisation and the potential for significant extensions to what is already a large and high grade nickel deposit.

Spotted Quoll was discovered two years ago in October 2007. A Mineral Resource of approximately 2.0Mt at an average grade of 6.2% nickel containing 125,500t nickel has already been defined down to 650m vertical depth.

Spotted Quoll Open Pit Mine

The mining and site development contract has been awarded to Mining and Civil Australia. Site work will commence later this month with construction of a haulage road, 33 kV mains powerline, dewatering system and communications. First ore production is scheduled to coincide with completion of the Cosmic Boy nickel concentrator in March\April 2010.

The Ore Reserve for the Spotted Quoll open pit is 386,000 tonnes at an average grade of 5.1% nickel containing 19,900 tonnes nickel. Target production is 8,500 tonnes nickel in CY 2010 and 9,800 tonnes nickel in CY2011. The open pit is expected to be a robust project with estimated cash costs of less than US$2.00/lb nickel in concentrate. Total life of mine capital cost, including surface infrastructure, is estimated to be A$36M.

The 150m deep open pit represents only 16% of total contained nickel in the current Mineral Resource. A feasibility study is in progress for a substantial underground mine which is planned to be accessed from the open pit. A site for the decline portal has already been defined and underground development is expected to commence in early 2011. The open pit will employ over 80 people during development and 65 people during sustained production.

Update on Flying Fox Mine

Current ore production is coming from T1 and from development drives in the T4 deposit. A drive is also being developed to provide access to drill out the upper part of the Lounge Lizard deposit. The decline is on track to intersect the Lewinsky Lode at the top of T5 in the December Q 2009 and recent underground drilling in the southern part of T4 and the upper part of T5 has resulted in many high grade intersections. A revised mineral resource and ore reserve for this area of the mine is in progress and is expected to be announced in December Q.

A high priority is to transport 1,850 tonnes of nickel estimated to be in concentrate stockpiles at the Cosmic Boy plant to BHP Billiton's smelter in Kalgoorlie. The trucking fleet is being doubled to 10 trucks to transport this concentrate for sale over the next couple of months.

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, Mr John Haywood and Mr Tim Peters. Mr Hanna, Mr Haywood and Mr Peters are members of AusIMM and are full time employees or consultants to the Company. Mr Hanna, Mr Haywood 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, Mr Haywood 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.

The drill hole intersection reported in WBD 157W3 is based on a preliminary analysis of diamond drill core using a Niton portable XRF analyser. This intersection requires confirmation by formal laboratory assays.

FORWARD LOOKING STATEMENT:

This release contains certain forward-looking statements. Examples of forward looking statements used in this release are: 'with first production of high grade ore expected in March/April 2010.' and, 'Target production is 8,500 tonnes nickel in CY 2010 and 9,800 tonnes nickel in CY2011. The open pit is expected to be a robust project with estimated cash costs of less than US$2.00/lb nickel in concentrate. Total life of mine capital cost including surface infrastructure is estimated to be about A$36M,' and, 'WBD 157W3 confirms the exceptional continuity of the mineralisation and the potential for significant extensions to what is already a large and high grade nickel deposit', and 'The intersection in WBD 157W3 appears to be associated with a fault and late stage granite intrusions with some similarities to Flying Fox. The fault may be equivalent to the T3 Fault at Flying Fox which offsets T1 from the large, underlying T4/T5/T6 deposits,' and, 'expected to intersect the Lewinsky Lode at the top of T5 in the December Q 2009', and, 'with the intention of transporting this concentrate for sale over the next two months'.

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.

Contact Information