Western Areas NL

Western Areas NL

July 09, 2008 01:30 ET

Western Areas NL: Activities Report for the Period Ending 30 June 2008

PERTH, AUSTRALIA--(Marketwire - July 9, 2008) - Western Areas NL (TSX:WSA)(ASX:WSA) -


The June Q was another period of significant progress towards achieving target production of 35,000 tpa nickel at less than $US3 per pound in concentrate from four mines by 2011.

Flying Fox is on track to produce more than 8,000 tonnes of nickel in concentrate in CY 2008 and 14,000 tonnes in CY 2009 at low cash costs with the decision on a shaft due this year. Production during the quarter was at forecast rates with 55,573 tonnes of ore invoiced at an average grade of 4.3% nickel. The capital mine development at T1 was completed and production has ramped up to an average 800 tonnes nickel in concentrate per month. A decision was made to fast track Spotted Quoll towards open pit production and surface development works commenced at Diggers South. Both of these deposits are expected to commence production in 2009.

Drilling added 47,000 tonnes of nickel to the high grade resource inventory at Forrestania with initial mineral resources at the Flying Fox T4 and Spotted Quoll deposits. Construction has commenced on the Stage One nickel concentrator at Cosmic Boy and the expansion of the accommodation village to 500 rooms.

Western Areas is operating eight mine development and infrastructure projects and a $30M exploration program. To manage and fund this growth, the management team has been strengthened with a number of key appointments, contracts have been awarded for site work and further enhancements have been made to the debt and equity structures of the Company.

Highlights during the June quarter were:

Mine Production:

- Flying Fox reached target ore production of 20,000 tonnes ore per month and is on track to produce the target 8,000tpa nickel in concentrate for CY 2008.

- Invoiced production for the quarter was 55,573t at 4.3% Nickel and cash costs were A$2.15 per lb nickel in concentrate, in line with forecasts.

Mine Development:

- Flying Fox decline achieved record 400m advance for the quarter. The decline is now below T1 and is expected to intersect the T4 deposit in the December Q.

- Scoping study for an ore haulage shaft at Flying Fox (in addition to the decline) has been received and a decision is expected in the September Q.

- Scoping study for initial open pit at Spotted Quoll indicates a very robust project producing up to 8,000 tpa nickel in concentrate pa. Initial permitting is underway.

- 40ha evaporation pond under construction at Diggers South to enable dewatering of the Outokumpu open pit and underground mine during the next six months.

- Ongoing work on the nickel plant includes construction of concentrate storage shed, offices, ROM pad and foundations for the crusher and flotation circuits.

- The village is fully occupied and the expansion to 500 rooms by January 2009 is a priority. Buildings are being delivered in stages to meet this expansion.

Exploration and Mineral Resources:

- Addition of T4 and Spotted Quoll has increased total Forrestania mineral resources to 287,000 t contained nickel. Further increases expected at T4 and Spotted Quoll.

- Drilling below Spotted Quoll intersected 18.3m @ 10.4% nickel. Four drill rigs are testing extensions and potential for a substantial underground mine.

- September Q drilling priorities are: Spotted Quoll, Flying Fox T4 extensions, T7 EM target (in progress) and new EM conductors south of Spotted Quoll.

- Exploration success at regional nickel projects - Koolyanobbing and Sandstone.

The full activities report can be viewed at the Company's website via the following link: http://www.westernareas.com.au/newsDocs/176_0807%2009%20WSA%20June%20quarterly.pdf.

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