Western Areas NL
TSX : WSA
ASX : WSA

Western Areas NL

March 24, 2009 08:00 ET

Western Areas Announces Official Opening of Forrestania Nickel Concentrator

PERTH, AUSTRALIA--(Marketwire - March 24, 2009) -

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 that the Forrestania Nickel Concentrator will be officially opened today by the Honourable Norman Moore MLC, Minister for Mines and Petroleum in Western Australia.

The opening will be attended by the Minister, the president of the Shire of Kondinin, Western Areas Board members, shareholders and management, and senior management from GR Engineering and Newexco. Special guests include well known drilling pioneer and Western Areas shareholder, Dinny Grimwood, who drilled for nickel at Forrestania nearly 40 years ago.

The nickel concentrator located at Cosmic Boy in the centre of the Forrestania Nickel Project is designed to treat high grade nickel ore from the Flying Fox underground nickel mine. Flying Fox mine is currently producing approximately 1,000 tonnes of nickel per month at an average grade of 4% nickel from the T1 orebody. The grade of the Flying Fox ore is expected to increase to between 5-6% nickel as the mine accesses the larger T5 deposit in early 2010.

The Cosmic Boy nickel concentrator uses conventional flotation technology to processes ore into nickel concentrate with an average grade of 14% nickel. The plant was designed and constructed to a very high standard by GR Engineering Services and was built on time and on budget.

A decision to proceed with a major expansion of the nickel concentrator is expected in the June quarter. This expansion is required to process additional ore from the planned Spotted Quoll mine, 6km south of Flying Fox. Spotted Quoll already contains more than 125,000 tonnes nickel in high quality mineral resources, less than 18 months since its discovery by Newexco.

On 12 March, Western Areas announced a Heads of Agreement with BHP Billiton for a contract to sell up to 10,000 tonnes of nickel in concentrate per annum to a total of 75,000 tonnes nickel. The product to be sold to BHP Billiton will be a blended concentrate, initially from the Flying Fox and Spotted Quoll mines. Western Areas is targeting to produce a total of 20,000 to 25,000 tpa nickel from Flying Fox and Spotted Quoll from 2010 onwards.

Opening Address - Western Areas Managing Director, Mr Julian Hanna

"Today is a very exciting day for Western Areas. The opening of the nickel concentrator highlights the teamwork which has allowed this Company to grow from its initial listing on the ASX to become a successful explorer, a substantial underground miner and now a proven minerals processor. This is a source of great pride for our shareholders, staff, contractors and supporters and I would like to acknowledge GR Engineering who designed and constructed this fine plant.

To our shareholders, this nickel concentrator represents an opportunity to gain the maximum value from two of the highest grade nickel mines in the world by controlling the downstream processing of ore from these mines. To the broader community of Western Australia, I think Forrestania represents a world class mining project which will benefit many people over many years.

We have a diverse population of 255 people on site which includes mining, geological, processing, safety, environmental, drilling, catering and construction staff and contractors. This number is expected to rise to over 400 people as the Spotted Quoll mine and expanded plant are brought on line. We also have three other significant nickel deposits which are planned to be brought into production when the current nickel price improves.

Finally, we consider that Forrestania has unrivalled exploration potential and a track record for new high grade nickel discoveries which will continue to provide ore for this plant well beyond the current 10 year target.

I would now like to ask the Minister for Mines and Petroleum, the Honourable Norman Moore, MLC, to officially open the Forrestania nickel concentrator."

COMPETENT PERSONS STATEMENT: The information within this report is based on information compiled by Mr Julian Hanna of Western Areas NL. Mr Hanna is a member of AusIMM and is a full time employee of the Company. Mr Hanna has sufficient experience which is relevant to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.' Mr Hanna consents 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. These include: "A decision to proceed with a major expansion of the nickel concentrator is expected in the June quarter. This expansion is required to process additional ore from the planned Spotted Quoll mine, 6km south of Flying Fox" and "Western Areas is targeting to produce a total of 20,000 to 25,000 tpa nickel from Flying Fox and Spotted Quoll from 2010 onwards". 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.

This announcement does not include reference to all available information on the Company or Forrestania Nickel Project 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.

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