Western Areas Ltd.

Western Areas Ltd.

April 14, 2015 20:48 ET

Western Areas Announces March 2015 Quarterly Activities Report

Free Cashflow Generation Continues and Unit Cash Costs Track Better Than Guidance

PERTH, AUSTRALIA--(Marketwired - April 14, 2015) -


Western Areas (ASX:WSA) (WSA or the Company) is pleased to report another strong quarterly performance across the full suite of operational metrics including safety, costs and continued positive free cashflow generation. The cashflow performance demonstrates the Company's resilience to difficult external operating conditions currently being experienced in the resources industry. There were no lost time injuries for the quarter with a reduced LTIFR of 0.98

The mill successfully completed its major planned shutdown for the financial year in February. Despite additional costs associated with shutdowns, and the March quarter being the shortest of the year, unit cash cost of production was A$2.32/lb (US$1.82/lb) for nickel in concentrate. Year to date unit cash cost of production is A$2.36/lb, being better than our upgraded guidance range of A$2.40/lb to A$2.50/lb. As a result, the Company now expects full year costs to be at the lower end of the guidance previously provided.

The Company again generated free cashflow for the quarter despite the nickel price retreating to below US$6.00/lb by quarter end. Pre-consolidated free cashflow generation was A$15.4m, which included the second last interest payment of A$4.0m on the remaining convertible bonds (A$125.0m) which are due to be retired on 2 July 2015. Consolidated cash at bank (which includes FinnAust Mining) is A$193.0m and net cash has increased to A$68.0m.

Mine production was 142,734 tonnes of ore at an average grade of 4.7% for 6,702 nickel tonnes. Mill production was 6,180 nickel tonnes in concentrate for the quarter. Year to date production is at 19,125 nickel tonnes in concentrate, indicating that full year concentrate production guidance remains on track to reach the upper end of the range 24,500 to 25,500 nickel tonnes.

March Quarter 2015 Highlights:

  1. There were ZERO lost time injuries for the quarter which resulted in a reduced LTIFR of 0.98. Should there be no LTIs in the June quarter, LTIFR will be reported at 0.0.
  2. Flying Fox mine production was 72,144 tonnes of ore mined at 4.6% for 3,330 tonnes (7.3M lbs) of contained nickel.
  3. Spotted Quoll mine production was 70,590 tonnes of ore at 4.8% for 3,372 tonnes (7.4M lbs) of contained nickel.
  4. Mill throughput was 145,933 tonnes of ore at an average grade of 4.7% nickel with recovery of 90%.
  5. An interim fully franked dividend of 3.0 cents was declared. Payment of the dividend occurred on 10 April 2015.
  6. A remodelling of the Flying Fox massive sulphide Resource resulted in an increase of 11,394 tonnes of nickel at an average grade of 5.4% nickel. The main increase in Resources was in the T5 massive area of 10,414 tonnes of nickel.
  7. Drilling at Old Flying Fox intersected 3.73m @ 7.29% nickel.
  8. Mill enhancement project feasibility study was successfully completed.
  9. Western Gawler geophysical interpretation was completed with drilling commencing next quarter. Access Agreements have been finalised.

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: "the Company now expects full year costs to be at the lower end of the guidance previously provided" and, "full year concentrate production guidance remains on track to reach the upper end of the range 24,500 to 25,500 nickel tonnes".

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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