Western Areas Limited

Western Areas Limited

January 20, 2015 21:19 ET

Western Areas Announces December 2014 Quarterly Activities Report

Lowest Unit Cash Costs in Three Years, Continued Free Cashflow Generation and Production Tracking Well

PERTH, AUSTRALIA--(Marketwired - Jan. 20, 2015) -


Western Areas (WSA or the Company) (ASX:WSA) is pleased to report another solid quarterly performance and an excellent half year result for safety, costs, operational metrics and positive free cashflow generation. There were no lost time injuries for the quarter with a reduced LTIFR of 1.00

The Company's continued focus on cost management, optimised mill performance and above expectation ore feed head grade has resulted in the lowest quarterly unit cash cost of production of A$2.23/lb (US$1.91/lb) of nickel in concentrate since December 2011. As a result, the half year unit cash cost was A$2.37/lb being around 20% lower than full year guidance. Whilst the Company will update full year guidance metrics with the release of the half year financial results in February, WSA can confirm that it expects there will be a significant improvement in unit cash cost guidance for the year.

The Company again generated strong cashflow for the quarter notwithstanding the nickel price retreating to an average of around US$7/lb. Partially offsetting the nickel price decline was the continued weakening of the Australian dollar. Free cashflow generation was A$25.6m, which excludes dividend payments of A$9.3m and A$8.3m relating to the final taxation payment for FY14. Consolidated Group cash at bank is now A$178.7m,.

Mine production was 132,446 tonnes of ore at an average grade of 5.0% for 6,597 nickel tonnes. Mill production was 6,434 nickel tonnes in concentrate. Half year mine production totalled 13,257 nickel tonnes, whilst mill production for the half was 12,945 nickel tonnes.

December Quarter 2014 Highlights:

  1. Flying Fox mine production was 64,122 tonnes of ore mined at 4.9% for 3,114 tonnes (6.9M lbs) of contained nickel.
  2. Spotted Quoll mine production was 68,324 tonnes of ore at 5.1% for 3,483 tonnes (7.7M lbs) of contained nickel.
  3. Mill throughput of 152,407 tonnes of ore (10% above nameplate capacity) at an average grade of 4.7% Ni with recovery of 90%.
  4. Total nickel in concentrate sales comprised 6,246 tonnes (13.8M lbs).
  5. Paid a fully franked 4 cent per share final dividend (A$9.3m) for FY14.
  6. Unit cash cost of nickel in concentrate of A$2.23/lb (US$1.91/lb) being the lowest level achieved in three years.
  7. Generated A$25.6m free cashflow (excluding the dividend and final taxation payment relating to FY14).
  8. Concentrate offtake tender was awarded to Jinchuan Group (Jinchuan).
  9. Drilling at Flying Fox intersected massive sulphides (assays pending) at the old Outokumpu working areas (near T1). Furthermore massive sulphides were intersected at T6 including 3.5m @ 5.6% nickel.
  10. Desktop study work progressed at New Morning to assess open pit and underground mine potential.

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


The information within this report as it relates to exploration results, mineral resources, ore reserves and mine development activities is based on information compiled by Mr Charles Wilkinson, Mr Andre Wulfse and Mr Dan Lougher of Western Areas Ltd. Mr Wilkinson, Mr Wulfse and Mr Lougher are members of AusIMM and are full time employees of the Company. Mr Wilkinson, Mr Wulfse, and Mr Lougher 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 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.' Mr Wilkinson, Mr Wulfse and Mr Lougher consent to the inclusion in the report of the matters based on the information in the form and context in which it appears.


This release contains certain forward-looking statements including nickel production targets. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "continue", and "guidance", or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production and expected costs.

Examples of forward looking statements used in this report include: "WSA can confirm that it expects there will be a significant improvement in unit cash cost guidance for the year".

This announcement does not include reference to all available information on the Company, the Forrestania Nickel Operation or Company subsidiary's and should not be used in isolation as a basis to invest in Western Areas. Potential investors should refer to Western Areas' 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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