Western Areas NL
TSX : WSA
ASX : WSA

Western Areas NL

July 02, 2008 08:00 ET

Western Areas Announces Forrestania Mine Development and Infrastructure Projects Update

PERTH, AUSTRALIA--(Marketwire - July 2, 2008) -

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 a positive start to the 2008/09 financial year with significant progress on a wide range of new mine development and infrastructure projects. The projects are being managed by an experienced team of staff and consultants.

The Company is on schedule to produce the initial target of 8,000 tonnes of nickel in concentrate from Flying Fox in CY 2008. Flying Fox production figures and cash costs will be included in the June Q activities report expected to be released in mid July. Western Areas has previously announced a C1 cash cost target of US$2.50/lb nickel for life of mine at Flying Fox which should make it one of the lowest cost nickel mines in Australia.

Work is also progressing well at the Spotted Quoll open pit and Diggers South underground mine sites where production is expected to commence within 12 months. In addition, excavation of the Cosmic Boy mine box cut is expected to be completed within 6 months.

Western Areas has a clear strategy to increase production to reach the target of 35,000 tonnes of nickel in concentrate from four mines by 2011. This target production should place Western Areas in the top 10 global nickel producers.

Exploration, mineral resource extension and geotechnical drilling is ongoing with eight surface drill rigs at Forrestania. One is testing Flying Fox T7 (currently at approximately 800m depth), three are defining Spotted Quoll resource extensions, one is confirming Digger Rocks resource and three are conducting geotechnical and hydrological drilling at various mine sites. Permitting for a large number of drill sites is in progress to test new exploration targets south of Spotted Quoll.

Mine Development and Infrastructure Projects

Western Areas has seven separate mining and development projects underway plus a major expansion of the Cosmic Boy accommodation village. These projects are each operated and managed by experienced project teams with work being conducted to the highest standards.

Summary of recent progress on mining and development projects and 18 months timetable:

1. Flying Fox Mine:

- Capital development for T1 ore body now complete

- Ore production has already reached 20,000 tonnes per month

- Decline on target to access T4 deposit in December Q 08

2. Spotted Quoll Mine:

- Feasibility study for initial 4 year open pit in progress

- Geotechnical and hydrological evaluation of open pit in progress

- Environmental aspects required for permitting underway

3. Diggers South Mine:

- Evaporation pond being constructed to de-water mine

- Geotechnical evaluation for underground mine well advanced

- Negotiations for concentrate offtake agreement in progress

4. Cosmic Boy Mine:

- Contract awarded to excavate box-cut to access underground mine

5. New Morning Mine:

- Pre-feasibility study report due by end of July 08

6. Nickel Concentrator:

- Construction on schedule for March Q 09 commissioning

- Planning already underway for Stage Two expansion

7. Flying Fox Shaft:

- Scoping study for ore haulage shaft now complete

- Board decision to proceed expected in September Q 08

8. Accommodation Village:

- All units ordered for expansion to 500 rooms by January 09

The full release including graphs and long section can be seen at on the company's website at www.westernareas.com.au.

DISCLAIMER AND COMPETENT PERSONS STATEMENT:

The information within this report as it relates to the Company's planned operations and production projections has been compiled by Mr. Julian Hanna and Mr. Dan Lougher who are both full time employees of Western Areas.

Mr. Hanna and Mr. Lougher are members of AusIMM and have sufficient experience which is relevant to the style of mineralization 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. Lougher consent to the inclusion in the report of the matters based on the information in the form and context in which it appears.

DISCLAIMER - Production and Development targets:

The information contained within this release as it relates to Western Areas production and development targets is based on estimates of potential annual production and mine development rates using several assumptions and forward looking statements. Production and development targets may vary depending on a wide variety of factors including nickel price, future estimation of mineral resources and ore reserves, mining costs, geotechnical issues, environmental permitting and future mine development and production rates. Apart from Flying Fox and Diggers South, these estimates are not yet based on feasibility studies and may be varied at any time. Potential or existing investors should not rely on these targets as a basis to invest in Western Areas NL.

FORWARD LOOKING STATEMENT:

This release contains certain forward-looking statements. Examples of forward looking statements used in this release are: 'the Company is on schedule to produce the initial target of 8,000 tonnes of nickel in concentrate from Flying Fox in CY 2008', and 'Western Areas has previously announced a target C1 cash cost of US$2.50/lb nickel for life of mine at Flying Fox which should make it one of the lowest cost nickel mines in Australia', and 'a clear strategy and timetable to increase production to the target of 35,000 tonnes of nickel in concentrate from four mines by 2011 (Figure 1). This target production should place Western Areas in the top 10 global nickel producers'. Forward-looking statements are subject to a variety of risk 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 or the Flying Fox, Spotted Quoll and Diggers South deposit 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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