Western Areas NL

Western Areas NL

June 11, 2008 08:00 ET

Western Areas Nickel Production Unaffected by Gas Supply Disruption

PERTH, AUSTRALIA--(Marketwire - June 11, 2008) -


Following questions from shareholders, Western Areas (TSX:WSA)(ASX:WSA) confirms that the Company's nickel production, mine development and exploration activities at the Forrestania Nickel Project are unaffected by recent disruptions to power supplies in Western Australia.

Electricity at Forrestania is supplied from Synergy and delivered via the Western Australian power grid. Advice obtained from Synergy is that the Company should not experience any loss of power supply. In addition, the Company already has back up diesel generator capacity for the Flying Fox mine, Cosmic Boy village and concentrator construction site.

Production and Development Update

Production from the Flying Fox T1 ore body is progressing well with the target of 20,000 tonnes of ore mined per month already reached in April and May, only four months after mining commenced. Permitting is also underway to commence mine development of the Spotted Quoll open pit mine as soon as possible. Four drill rigs are currently drilling resource extensions at Spotted Quoll to 400m depth with recent results expected to be released soon.

The first contracts are also due to be awarded to access the Diggers South and Cosmic Boy underground mines, previously operated by Outokumpu. These contracts are the first stage of developing these significant deposits where production is expected to commence in 2009. Drilling is also due to commence this week to test the T7 EM conductor below the Flying Fox mine. Two previously announced drill holes at T7 intersected bonanaza grade nickel (greater than 9% nickel) associated with massive sulphide on the margin of the large T7 EM conductor.

Construction of the Cosmic Boy concentrator is now well underway and the Board has approved a further expansion of the Cosmic Boy village to accommodate 500 people.

The information within this report was 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 and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and on the activity undertaken 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. Examples of forward looking statements used in this release are: "to commence mine development of the Spotted Quoll open pit mine as soon as possible" and "the first stage of developing these significant deposits where production is expected to commence in 2009". 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.

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. 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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