Western Areas NL

Published : November 25th, 2015

Chairman's Address to Shareholders

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Keywords :   Australia | China | Debt | Growth | Indonesia | Iron | Lead | Lme | Market | Nickel | Recovery |

Chairman's Address to Shareholders

d56d3ec6-31ef-42d0-ac1f-439920e46e39.pdf


25 November 2015 ASX: WSA


News Release


CHAIRMAN'S ADDRESS - 2015 ANNUAL GENERAL MEETING


Financial year 2015 was a very strong year operationally for Western Areas which I am pleased to report led to increased profits, cash flow and dividends to shareholders over and above that of financial year 2014. This year, three significant milestones were reached. Firstly, we have ended the 2015 financial year with our strongest-ever balance sheet position, then in July we became debt free after the final repayment of the convertible bonds and lastly, we have delivered on the most important metric for our company - zero lost time injuries for the year that continues up to the time of releasing this address.


Western Areas' 2015 financial results enabled the Board to declare a healthy dividend for shareholders with a total of 7 cents fully franked per share, or 47% of net profit after tax, being paid out to shareholders, I note this was achieved despite a continued weak nickel price in the second half of the 2015 financial year. Western Areas has now paid in excess of $100 million in dividends since declaring its maiden dividend in March 2010.


We have been able to drive balance sheet improvements which have allowed us to take active steps to position Western Areas for future growth, and to be well placed to deal with the currently unsustainable nickel price, whilst having the ability to respond to any future nickel price upswing.


The nickel market has remained a challenge as the price continues to move through a cyclical low. The supply side of the market continues to adjust to structural changes that began in January 2014, as Indonesia moved to ban exports of unprocessed nickel ore.


Despite initial predictions that this would lead to an immediate tightening of supply, it transpired that Chinese nickel pig iron producers have steadily eaten away at a very large domestic stockpile of higher grade Indonesian nickel ore. From evidence available in the market, we believe that this stockpile rundown has now largely run its course, giving some cause for optimism on the price front and the market pointing toward a deficit in nickel supply emerging perhaps as soon as midway through 2016.


That said, the nickel market continues to be affected by lower growth in stainless steel production and a longer than usual destocking period. This, coupled with the lack of any significant nickel supply reductions, continues to be a drag on the anticipated price recovery. There are however, some early encouraging signs for nickel with the LME refined stockpile falling over 10% from recent highs and a reduction in nickel pig iron output from China. We are also witnessing good growth estimates from China for 300 series stainless steel, which has the highest nickel content, whilst growth in the battery market continues to grow at double digit rates.


We are assembling a platform that builds upon the strong base of our production assets at Flying Fox and Spotted Quoll through additional development ready projects such as Odysseus, the Mill Enhancement Project and New Morning. We have also built in long term production growth and exploration potential through the acquisition of the Cosmos Nickel Complex and the exploration farm-in at the Western Gawler JV in South Australia. These projects sit alongside our already considerable discovery prospects at Forrestania.


Furthermore, we have recently announced some prudent and responsible capital expenditure deferrals totalling A$32.6m relating to some development projects and discretional capital expenditure. These deferrals are only possible due to the investments we've made at our mines over the prior 18 months and reflect the forward planning of the Company. It is important to note that should the nickel price support stronger near term cash generation, these projects can be recommenced quickly.


We also continue to work at lowering our operating cost base and with the support of our employees and long term service providers we continue to make inroads into our cost base through a raft of initiatives, including productivity improvements and mine efficiency gains. These results are evidenced through our quarterly results, and I can assure you the Western Areas team are focussed on this on a daily basis.


I would again like to thank the team at Western Areas for all their hard work over the year, led by Managing Director, Dan Lougher. All of the employees, contractors and supporters of Western Areas have again delivered an exceptional operational result through their efforts throughout the year. I also thank my fellow directors and look forward to the coming year with a continued strong performance and a more positive nickel price going forward.


Ian Macliver

Chairman - Western Areas Ltd


-ENDS-


For further details, please contact:

Dan Lougher David Southam

Managing Director - Western Areas Ltd Executive Director - Western Areas Ltd Telephone +61 8 9334 7777 Telephone +61 8 9334 7777

Email: [email protected] Email: [email protected]


Shane Murphy FTI Consulting

Telephone +61 8 9485 8888 / 0420 945 291

Email: [email protected] Or visit: www.westernareas.com.au


FORWARD LOOKING STATEMENT:

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.

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 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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Data and Statistics for these countries : Australia | China | Indonesia | All
Gold and Silver Prices for these countries : Australia | China | Indonesia | All

Western Areas NL

PRODUCER
CODE : WSA.AX
ISIN : AU000000WSA9
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Western Areas NL is a nickel and gold producing company based in Australia.

Western Areas NL holds various exploration projects in Australia.

Its main assets in production are FORRESTANIA, FLYING FOX MINE and KOOLYANOBBING in Australia, its main asset in development is SANDSTONE - LORD NELSON in Australia and its main exploration properties are MT FINNERTY NICKEL JV, LAKE KING, MT ALEXANDER, MT JEWELL and SPOTTED QUOLL in Australia and EAST BULL LAKE in Canada.

Western Areas NL is listed in Australia and in Canada. Its market capitalisation is AU$ 1.0 billions as of today (US$ 756.6 millions, € 662.7 millions).

Its stock quote reached its highest recent level on April 15, 2011 at AU$ 6.78, and its lowest recent point on March 27, 2020 at AU$ 1.66.

Western Areas NL has 272 280 000 shares outstanding.

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Corporate Presentations of Western Areas NL
2/17/2014Half Year Results Corporate Presentation
11/21/2013Areas AGM Corporate Presentation
2/21/2013Half Year Results Corporate Presentation
Annual reports of Western Areas NL
Annual Report to shareholders
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2009 Annual Report
Option Grants of Western Areas NL
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Nominations of Western Areas NL
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Financials of Western Areas NL
2/24/2016Half Year Financial Results Press Release
8/20/2015Areas Full Year Financial Results Presentation
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12/6/2013RBR: Drilling to Commence at Caesar Hill JV
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11/22/2013Final Director's Interest Notice
9/6/2013Assays Increase New Morning High Grade Nickel Intersection
8/30/2013High Grade 8% Nickel Intersection at New Morning
7/19/2013Further High Grade Intersections at New Morning
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3/27/2013New Morning Exploration Update
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5/11/2012Production Guidance Update
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10/5/2011(Flying Fox Mine)Major Nickel Intersection Below Flying Fox Mine
Corporate news of Western Areas NL
8/11/2017Advance Notice - Full Year Results Conference Call
8/2/2016Diggers and Dealers Presentation
6/15/2016Final Director's Interest Notice
6/9/2016Western Areas Board Change
4/22/2016Quarterly Activities Report
4/5/2016Western Areas - Security Purchase Plan Booklet
4/5/2016Western Areas - Section 708A Cleansing Statement
3/31/2016Successful Completion of Western Areas Placement
1/28/2016Change in substantial holding
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1/11/2016Becoming a substantial holder
12/21/2015Western Areas Reduces Standby Bank Facility Fees
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11/25/2015Annual General Meeting - MD Presentation
11/25/2015Chairman's Address to Shareholders
10/26/2015Quarterly Activities Report
10/23/2015Notice of Annual General Meeting/Proxy Form
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10/12/2015Western Gawler Craton Update
10/7/2015Western Areas Revised FY16 Capital Expenditure Plans
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8/28/2015Change of Director's Interest Notice x 3
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8/20/2015Western Areas Full Year Financial Results Presentation
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8/20/2015Appendix 4E & Full Year Statutory Accounts
8/18/2015Full Year Results Conference Call Details
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7/19/2015MILL ENHANCEMENT PROJECT
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8/27/2013Areas Full Year Result Presentation Pack
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7/1/2013Strategic Agreement with Traka at Musgraves
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5/31/2013Areas Upgrades Full Year Guidance
4/23/2013Quarterly Activities Report
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2/21/2013Half Year Accounts and Appendix 4D
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2/21/2013Results of Meeting
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6/1/2012Weekly Summary Alert
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3/5/2012Acquires 100% of Lounge Lizard and Kagara's Nickel Assets
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12/30/2011Weekly Summary Alert
12/22/2011Closes Out Royalty Obligation To Outokumpu
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9/23/2011Weekly Summary Alert
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8/2/2011Considering Nickel Offtake Tender
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2/14/2011ALERT: New Western Areas Financial Report
2/11/2011Weekly Summary Alert
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AUSTRALIA (WSA.AX)TORONTO (WSA.TO)
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