Western Areas NL
TSX : WSA
ASX : WSA

Western Areas NL

April 22, 2009 08:00 ET

Western Areas Announces March 2009 Quarterly Activities Report

PERTH, AUSTRALIA--(Marketwire - April 22, 2009) - Western Areas NL (TSX:WSA)(ASX:WSA) -

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

The March quarter 2009 was another period of strong growth for Western Areas. This included significant low cost nickel production and record development at Flying Fox, encouraging developments at Spotted Quoll and major progress on a number of initiatives to increase revenue and reduce costs in the Company's key activities. The Board and management team is executing a clear and systematic strategy to develop the Company into one of Australia's premier, low cost, long life nickel producers. Several events during the March quarter should help Western Areas achieve this position.

March Q 09 Highlights:

1. Solid production at Flying Fox with 77,500t ore mined at average grade of 3.7% nickel for 2,833t nickel. Average cash cost was US$1.98/lb nickel.

2. Flying Fox mine development is ahead of schedule with high grade ore now being mined at T1 and T4 deposits. T5 is on target to be reached in Dec Q 09.

3. First Ore Reserve announced for Spotted Quoll open pit with 307,000 tonnes ore at average grade of 5.4% nickel for 16,500 tonnes contained nickel.

4. Cosmic Boy nickel concentrator now commissioned and officially opened by the Western Australian Minister for Mines and Petroleum on 24th March.

5. Major restructure of the existing offtake agreement with Norilsk announced on 16 February, providing flexibility for Western Areas to sell to other parties.

6. Heads of Agreement with BHP Billiton to purchase 10,000tpa nickel in concentrate announced on 12 March. A$45M to be funded by BHP Billiton.

7. Western Areas now seeking a second offtake agreement with a third party to sell 10,000 to 15,000tpa nickel in concentrate starting 1 January 2010.

8. Drilling still producing positive results at Flying Fox and Spotted Quoll with further significant mineral resource upgrades expected at both deposits.

9. Excellent results in the T4/T5 zone with one drill hole intersecting four zones: 7.4m @ 7.0% Ni, 5.3m @ 6.8% Ni, 6.3m @ 8.3% Ni and 2.3m @ 11.5% Ni.

10. Systematic exploration now focused on 25km long Western Nickel Belt with goal to discover another Spotted Quoll or Flying Fox type deposit in 2009.

Initiatives to increase revenue and reduce costs in key activities:

1. Increased production at Flying Fox with multiple ore faces exposed in the mine. Target approximately 1,000 tonnes nickel per month.

2. Cosmic Boy nickel concentrator now enables Western Areas to increase revenue by controlling blending and recoveries of different ores.

3. New offtake agreement with BHP Billiton would result in improved terms and the ability to sell concentrate within Australia.

4. Ongoing review of major contracts at Forrestania has targeted 10% cost savings across the board.

5. Mining contract for new Spotted Quoll open pit will benefit from a competitive market and tender process.

6. Exploration budget halved to $1M/month with majority of drilling now focused on Western Nickel Belt at Forrestania.

Recent developments in Western Areas have coincided with an increase in the LME nickel price from approximately US$4.90/lb nickel at 3I December 2008 to the current price of US$5.79/lb nickel at 16 April 2009. The Board of Western Areas is very encouraged that several of the 2009 targets announced in the December Q 2008 Activities Report have already been achieved in the March Q.

The full activities report can be viewed at the Companies website www.westernareas.com.au.

QA-QC STATEMENT:

Mr Adrian Black from geological consultants Newexco Services Pty Ltd ("Newexco") is 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 and mine development activities is based on information compiled by Mr John Haywood, 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 Haywood, 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 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 shown in Figure 8. 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: "executing a clear and systematic strategy to develop the Company into one of Australia's premier, low cost, long life nickel producers. Several events during the March quarter should help Western Areas achieve this position", and "Western Areas now seeking a second offtake agreement with a third party to sell 10,000 to 15,000tpa nickel in concentrate starting 1 January 2010", and "Western Areas plans to commence site works at Spotted Quoll mine site at the start of the September Q", and "the decline is now well positioned to intersect the large, high grade T5 ore body by the end of 2009".

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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