Western Areas NL
TSX : WSA
ASX : WSA

Western Areas NL

July 15, 2010 07:27 ET

Western Areas Announces June 2010 Quarterly Activities Report

PERTH, AUSTRALIA--(Marketwire - July 15, 2010) -

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

Western Areas NL (TSX:WSA)(ASX:WSA) is pleased to report that combined mine production from the Flying Fox and Spotted Quoll mines doubled from 3,210 tonnes (7.1M lbs) nickel in the March Q 2010 to 6,810 tonnes (15M lbs) nickel in the June Q 2010. This is a significant achievement for any mining company and reinforces the potential for further production upgrades at Forrestania.

Half the combined mine production for June Q was achieved during the month of June. Flying Fox mined a total 36,870 tonnes ore at 4.2% nickel for 1,560 tonnes (3.4M lbs) nickel in June (72% above budget) and Spotted Quoll (in its first full month of production) mined a total 18,930 tonnes ore at 8.1% nickel for 1,520 tonnes (3.3M lbs) nickel in June (69% above budget). The reconciled cash cost for the month of June was US$1.82/lb nickel in concentrate, a record low for the Forrestania Project to date.

Increased mine production coincided with the completion of construction and successful commissioning of the Stage Two concentrate plant in June. The plant now has a capacity for 550,000tpa ore and is designed to meet the sustained production target of 25,000tpa nickel from Flying Fox and Spotted Quoll. 

June Q Highlights
  1. Record production from Flying Fox mine with 91,437 tonnes mined at 4.0% nickel for 3,697 tonnes (8.1M lbs) nickel.
  1. Record production from the Tim King Pit at Spotted Quoll with 46,258 tonnes mined at 6.7% nickel for 3,113 tonnes (6.9M lbs) nickel.
  1. Record milled production with 83,639 tonnes ore treated at 4.5% nickel to produce 3,303 tonnes (7.3M lbs) nickel in concentrate
  1. Reconciled cash costs for the June Q were US$2.22/lb nickel, 11% below long term guidance targets of US$2.50/lb nickel.
  1. Current stockpiles of 5,188 tonnes (11.4M lbs) nickel in ore and concentrate should make a significant contribution to profits in the December half 2010.
  1. Transport of concentrate in containers to Esperance Port is well advanced with the first shipment to Jinchuan expected to leave around 25th July.
  1. Total Ore Reserves at Spotted Quoll and Flying Fox (excluding Lounge Lizard) are currently 3.3Mt @ 4.7% nickel for 153,640t (339M lbs) nickel.
  1. Significant new disseminated nickel zone discovered 200m north of New Morning deposit. Drilling now testing for high grade sulphides below granite.
  1. Ongoing drilling in the Finland joint venture has confirmed widespread nickel/ zinc/copper sulphide mineralisation of similar type to Talvivaara Mine.
September Q Targets
  • Declaration of final dividend for the year ended 30 June 2010

  • Sustained high grade production from Tim King Pit and Flying Fox

  • Completion of feasibility study for the Spotted Quoll underground mine

  • Further drilling results from New Morning and Spotted Quoll extensions

Western Areas had A$65.3M cash and A$15.5M receivables at the end of the June Q. In addition, the in situ metal value of ore and concentrate in stockpiles at current prices was ~A$112M at the end of the June Q. These stockpiles are subject to plant recoveries, processing, smelting and refining costs and carry a cost based value of A$22.5M.

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, ore reserves and mine development activities is based on information compiled by Mr John Haywood, Mr Tim Peters, 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 Peters is a member of AusIMM and is a consultant to Western Areas. Mr Haywood, Mr Peters, 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 Peters, 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. 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: "reinforces the potential for further production upgrades at Forrestania", and "The plant now has a capacity for 550,000tpa ore and is designed to meet the sustained production target of 25,000tpa nickel from Flying Fox and Spotted Quoll", and "September Q Targets • Declaration of final dividend for the year ended 30 June 2010 • Sustained high grade production from Tim King Pit and Flying Fox • Completion of feasibility study for the Spotted Quoll underground mine • Further drilling results from New Morning and Spotted Quoll extensions".

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.

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