Western Areas Limited: Exploration Strategy and Activities Update
Published : March 14, 2013
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PERTH, AUSTRALIA--(Marketwire - March 14, 2013) -

THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

The Board of Western Areas (News - Market indicators) (the Company or WSA) is pleased to provide shareholders with an update of the exploration strategy and recent activities. The announcement is made with the back-drop of an operation which is performing exceedingly well in all key areas despite a challenging Australian dollar nickel price:

  1. Production - The Company is on target to better initial guidance on both nickel in ore and nickel in concentrate targets (27,500t and 25,500t of contained nickel respectively);

  2. Unit Cash Costs - At the half year, the Company's unit cash cost in concentrate was A$2.69/lb, well below the guidance of <A$3.00lb;

  3. Cashflow Generation - The Company continues to produce strong cashflow from operations (A$48m for first half). Based on the current nickel price, we expect that cashflow generation will be higher in the second half;

  4. Balance Sheet - The Company has a strong balance sheet with over A$150m in debt repaid over the last 8 months and recently announced a fully committed bank facility of A$125m which remains undrawn; and

  5. Safety - The Company has a lost time injury frequency rate of ZERO. Flying Fox has not had a lost time injury (LTI) for over 800 days and Spotted Quoll underground remains LTI free.

EXPLORATION STRATEGY

The Company has a strong history of discovery and development expertise as demonstrated by Flying Fox, Spotted Quoll Open Pit and Spotted Quoll Underground mines. Western Areas now controls over 900km² of highly prospective tenements. Flying Fox and Spotted Quoll mines are located 6km apart on what the Company describes as the Western Ultramafic Belt (WUB) which runs for 25km and has a total known endowment of over 450,000t of contained nickel metal. 

The Board strongly believes the greatest opportunity for profitable organic growth lies in the WUB and specifically in the 6km zone between the Flying Fox and Spotted Quoll mines. This area remains largely untested with no effective deep drill testing (T5 depth equivalent). Once again, the ability to access any discovery in this zone is extremely capital efficient due to the mature infrastructure in the form of underground development, surface infrastructure and grid power.

Given Spotted Quoll contains over 2.9mt of indicated and inferred resource grading 5.9% nickel and over a 10 year mine life, a decision was made to redirect exploration resources to the WUB zone, starting at New Morning. This strategy, in a relatively short time period, has delivered the Sunrise discovery and more recently a discovery below the existing New Morning deposit (further details provided in the Exploration Activities section).

Following a successful drilling program at Lounge Lizard to confirm the purchased resource, the Company's strategy now involves resource extension work at Flying Fox with a goal of lifting mine life to 10 years (more details below).

In summary, the Exploration Strategy at Forrestania has been formulated to:

  1. Support the base case production of 25,000 to 30,000t of nickel in ore per year through resource extension drilling, specifically at Flying Fox, and;

  2. Identify a new mining camp, specifically within the WUB (6km zone), which is capable of supporting a new mine where existing infrastructure and permitting can be utilised for capital efficiency.

Western Areas Managing Director, Mr Dan Lougher, said that the Company was committed to a strong organic growth pipeline alongside other growth activities.

"The discovery and subsequent development of Spotted Quoll within the Western Ultramafic Belt more than doubled the production profile of our company, at a hugely effective cost of discovery," said Mr Lougher.

"Our exploration strategy at Forrestania is based on the simple premise that the best place to find another Spotted Quoll or Flying Fox is right alongside where we found those two deposits originally."

"Repetition of our previous exploration success will have immediate positive results for the Company, particularly when we can then utilise several hundred million dollars worth of developed capital works to access any economic discovery," said Mr Lougher.

EXPLORATION ACTIVITIES

New Morning

The Company announced on 1 February 2013 assay and down hole electromagnetic (DHEM) results from NMD177. Importantly for the Company this was a significant breakthrough with the massive sulphide intersection having Flying Fox T5 characteristics. The intersection from NMD177 was 3.0m @ 6.3% Ni, which included 2.4m at 7.6% Ni. DHEM geophysics indicated that the high grade discovery hole had intersected the edge of the mineralised zone with initial modelling indicating a plate approximately 150m x 250m wide. Following the DHEM interpretation a detailed work program was developed utilising further DHEM and wedges off the parent hole. 

The first wedge hole (NMD177W1) completed off the parent hole NMD177 intersected granites (fault) at or close to the contact. Further geophysics (DHEM) of the wedge indicates that the better part of the conductor lies to the north and slightly deeper. A second wedge (NMD177W2) is in progress to test this position. The depth of the holes and the challenges of completing DHEM in these holes have meant that progress has been measured due to the highly targeted nature of the drilling, but is not outside the expected scope.

NMD158 (deepening of an existing hole) though not ideally located, tested the region south of the southern edge of the DHEM plate. The results from the hole indicate the mineralisation lies to the north of the hole.

Sunrise

This new area of mineralisation is significant as it occurs in the hanging wall stratigraphy. This horizon is known to occur along the length of the WUB but has received little testing in the past, opening up the opportunity to locate further deposits of this type.

Drilling at Sunrise is now complete and work has begun at estimating a resource for this new discovery. We are targeting to have a resource estimate complete for the March Quarterly Report which is due to be released mid to late April 2013.

Flying Fox / Lounge Lizard

Following the acquisition of Lounge Lizard, the average strike length of the T5 orebody is approximately 700m. The last six months of drilling resulted in an upgraded resource and reserve at Flying Fox.

The second stage of the work program involves the recommencement of mine development to locate the decline and underground infrastructure into a more central position within T5. As a consequence, we expect by the end of March that an exploration platform will be established in order to complete resource extension drilling immediately south of T5 and down plunge into T7. 

T15 / Arrowhead / Boojum

As part of the purchase of the Kagara's nickel tenements, approximately 4.5km of the southern portion of the WUB was acquired. Previous exploration of this area has been limited. Evaluation of this area, some 10km south of Spotted Quoll, commenced with coverage of the prospective stratigraphy with surface electromagnetic (EM) and the drill testing of the T15 prospect. Encouragingly, several of the recently drilled holes at T15 intersected good cumulate ultramafics. A program of DHEM on the holes has just been completed and the results are being interpreted to determine further activity.

Beautiful Sunday

As part of the review of the prospectivity of the WUB, an approximately 10km long strike of highly prospective basal ultramafic contact north of Flying Fox was assessed. The 'true footwall', is under tested with most previous holes terminating in banded-iron formation. A program of drilling has been designed to test the interpreted potential mineralisation down-plunge to the south. 

DISCLAIMER AND QA-QC STATEMENT: Mr Adrian Black from geological consultants Newexco Services Pty Ltd ("Newexco") and Mr Charles Wilkinson of Western Areas Ltd are responsible for the verification and quality assurance of the Company's exploration data and analytical results from the Forrestania Nickel Project. Mr Bill Amann from geological consultants Newexco Services Pty Ltd ("Newexco") is responsible for the verification and quality assurance of the geophysical data used in this release. Surface Diamond drill hole collar surveys used differential GPS, downhole surveys employed a north seeking gyroscopic instrument; comprehensive density database; high assay confidence with systematic QA/QC procedures; and validated database. Samples of quarter core from the drill holes described in this release are prepared and analysed by ALS Chemex Ltd laboratory in Perth for nickel, copper, cobalt and other elements. Core samples are crushed and pulverised to 90% passing 75 microns then analysed for nickel by ore grade determination using the ALS OG-62 method. Assays standards are routinely inserted in the sample stream by Newexco for quality control.

The information within this report as it relates to geological and drilling data is based on information compiled by Mr Charles Wilkinson of Western Areas Ltd. Mr Wilkinson is a member of AusIMM and is a full time employee of the Company. Mr Wilkinson has 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 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Wilkinson 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 include: "The Company is on target to better initial guidance on both nickel in ore and nickel in concentrate targets (27,500t and 25,500t of contained nickel respectively)" and, "Based on the current nickel price, we expect that cashflow generation will be higher in the second half" and, "Company's strategy now involves resource extension work at Flying Fox with a goal of lifting mine life to 10 years" and, "The results from the hole indicate the mineralisation lies to the north of the hole".

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.



Western Areas Ltd
Dan Lougher
Managing Director
+61 8 9334 7777
dlougher@westernareas.com.au
or
Western Areas Ltd
David Southam
Executive Director
+61 8 9334 7777
dsoutham@westernareas.com.au
www.westernareas.com.au
or
FTI Consulting
Shane Murphy
+61 8 9485 8888 / 0420 945 291
shane.murphy@fticonsulting.com
Data and Statistics for these countries : Australia | All
Gold and Silver Prices for these countries : Australia | 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$ 754.6 millions, € 661.0 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
Annual Report to shareholders
2009 Annual Report
Option Grants of Western Areas NL
2/14/2012Maintains Strong Profits and Declares Dividend
Nominations of Western Areas NL
1/3/2012appoints new Managing Director
Financials of Western Areas NL
2/24/2016Half Year Financial Results Press Release
8/20/2015Areas Full Year Financial Results Presentation
Project news of Western Areas NL
1/28/2014Revised Resource Table - December Quarterly Report
12/6/2013RBR: Drilling to Commence at Caesar Hill JV
12/4/2013Drilling to Commence at Musgrave Tenements
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
7/1/2013TKL: Musgrave project farm-in by Western Areas
3/27/2013New Morning Exploration Update
3/14/2013Exploration Strategy and Activities Update
2/1/2013GEOPHYSICS CONFIRMS SIGNIFICANT CONDUCTOR AT NEW MORNING
1/24/2013(Forrestania)New High Grade Nickel Discovery at Forrestania
1/24/2013GTE:Encouraging gold results intersected in drilling Mt Gibb
7/18/2012(Forrestania)Announces New High Grade Nickel Sulphide Discovery at Forres...
5/11/2012Production Guidance Update
3/14/2012Completed the Acquisition of Kagara Nickel
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
1/27/2016Quarterly Activities Report
1/11/2016Becoming a substantial holder
12/21/2015Western Areas Reduces Standby Bank Facility Fees
12/1/2015Change in substantial holding from NAB
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
10/12/2015MOX: Western Gawler Craton Drilling Recommenced
10/12/2015Western Gawler Craton Update
10/7/2015Western Areas Revised FY16 Capital Expenditure Plans
10/1/2015Cosmos Nickel Complex Acquisition Completed
9/29/2015Western Areas to Commence Drilling at Fowlers Bay Nickel JV
9/28/2015STA: Western Areas to Commence Drilling at Fowlers Bay Nick
9/28/2015Prospective Mafic Intrusions Confirmed at Western Gawler
9/22/2015Becoming a substantial holder
9/14/2015Change in substantial holding
9/1/2015Change in substantial holding
8/28/2015Change of Director's Interest Notice x 3
8/20/2015Dividend/Distribution - WSA
8/20/2015Western Areas Report Increased Full Year Profit and Dividend
8/20/2015Appendix 4E & Full Year Statutory Accounts
8/20/2015Western Areas Full Year Financial Results Presentation
8/18/2015Full Year Results Conference Call Details
7/30/2015Change in substantial holding from NAB
7/21/2015Quarterly Activities Report - Revised
7/19/2015GNG: Contract Award
7/19/2015MILL ENHANCEMENT PROJECT
7/5/2015Major Drilling Program Commenced at Western Gawler Project
7/2/2015WESTERN AREAS NOW DEBT FREE
6/18/2015Western Areas to Acquire the Cosmos Nickel Complex
4/1/2015Change in substantial holding
3/25/2015Change in substantial holding from NAB
3/11/2015Change in substantial holding from NAB
3/5/2015Ceasing to be a substantial holder
2/18/2015Change in substantial holding from NAB
2/17/2015Becoming a substantial holder from MS
2/16/2015Becoming a substantial holder from CBA
2/12/2015Half Year Results Conference Call Details
2/12/2015Ceasing to be a substantial holder from MS
1/21/2015Western Gawler Craton Project Update
11/6/2014Western Areas to Commence Major Exploration at Fowlers Bay
2/28/2014On Market 2014 Convertible Bond Purchase
2/25/2014Areas Share Purchase Plan Offer Document
2/24/2014Cleansing Statement - Notification under section 708A(5)(e)
2/18/2014Successful Completion of Western Areas Raising
2/18/2014Areas Ltd Capital Raising and SPP
2/17/2014Half Year Results Press Release
2/10/2014Areas Upgrades Full Year Guidance
1/28/2014Competent Person Statement
1/9/2014Becoming a substantial holder
12/17/2013Ceasing to be a substantial holder
12/17/2013Managing Director Interview by Market Professional
12/4/2013TKL:Western Areas proceeds to Stage 2 of JV and begins drill
11/21/2013Areas 2013 AGM Results
11/21/2013WSA 2013 AGM Chairman Address
11/21/2013Areas Chairman to Step Down
11/13/2013Finland Exploration Assets - London AIM Listing
10/21/2013Notice of Annual General Meeting/Proxy Form
10/15/2013TKL: Musgraves project - new targets on WSA JV tenements
9/24/2013Becoming a substantial holder
9/12/2013(Spotted Quoll)Spotted Quoll North High Grade Mineral Resource and Reserve
9/6/2013Substantial Shareholder - Restatement from CBA
8/27/2013Preliminary Final Report and Full Year Financial Statements
8/27/2013Areas Full Year Results Press Release
8/27/2013Areas Full Year Result Presentation Pack
8/21/2013Conference Call: Full Year Results for the Year Ended 30 Jun...
7/31/2013Announces Anticipated Non-Cash Impairment
7/23/2013Quarterly Activities Report
7/4/2013Areas Exceeds Full Year Guidance
7/1/2013Strategic Agreement with Traka at Musgraves
6/24/2013GTE: Rights Issue Entitlement
5/31/2013Areas Upgrades Full Year Guidance
4/23/2013Quarterly Activities Report
4/5/2013Chairmans Letter to Shareholders
4/4/2013Becoming a substantial holder
2/21/2013Half Year Accounts and Appendix 4D
2/21/2013Half Year Results Press Release
2/21/2013Results of Meeting
1/29/2013New Offtake Agreement
1/18/2013Notice of General Meeting/Proxy Form
1/14/2013WSA Announces Successful Completion of Share Purchase Plan
1/14/2013Areas Announces New Constitution
1/14/2013Areas Announces Change of Name and Company Type
12/10/2012Section 708A - Cleansing Notice
10/22/2012Notice of Annual General Meeting/Proxy Form
10/16/2012Takes Top Honours at WA Industry & Export Awards
9/21/2012Weekly Summary Alert
8/15/2012Conference Call-Full Year Results for the Year Ended 30 June...
7/25/2012Announces June 2012 Quarterly Activities Report
7/13/2012Weekly Summary Alert
7/2/2012Retires Convertible Bond From Cash Reserves
6/29/2012Weekly Summary Alert
6/15/2012Weekly Summary Alert
6/7/2012(Spotted Quoll)Spotted Quoll Underground Ore Reserves Increase by 94%
6/1/2012Weekly Summary Alert
5/18/2012Weekly Summary Alert
5/4/2012Weekly Summary Alert
4/20/2012Weekly Summary Alert
4/6/2012Weekly Summary Alert
3/23/2012Weekly Summary Alert
3/9/2012Weekly Summary Alert
3/5/2012Acquires 100% of Lounge Lizard and Kagara's Nickel Assets
2/24/2012Weekly Summary Alert
2/10/2012Weekly Summary Alert
1/27/2012Weekly Summary Alert
1/23/2012Announces December 2011 Quarterly Activities Report
1/13/2012Weekly Summary Alert
12/30/2011Weekly Summary Alert
12/22/2011Closes Out Royalty Obligation To Outokumpu
12/16/2011Weekly Summary Alert
12/2/2011Weekly Summary Alert
11/30/2011Agrees One Year Offtake Contract with Jinchuan
10/12/2011Clarification: Lounge Lizard Nickel Deposit
9/23/2011Weekly Summary Alert
9/8/2011Announces Update on Nickel Concentrate Tender Process
8/26/2011Weekly Summary Alert
8/22/2011Strong Financial Results for Year Ended 30 June 2011 & Full ...
8/12/2011Weekly Summary Alert
8/2/2011Considering Nickel Offtake Tender
5/6/2011Weekly Summary Alert
4/15/2011Announces March 2011 Quarterly Activities Report
4/8/2011Weekly Summary Alert
3/25/2011Weekly Summary Alert
2/25/2011Weekly Summary Alert
2/14/2011ALERT: New Western Areas Financial Report
2/11/2011Weekly Summary Alert
11/7/2008Weekly Summary Alert
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AUSTRALIA (WSA.AX)TORONTO (WSA.TO)
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Produces Nickel
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