increasing activities, page-6

from Mineweb (not exactly new news) but reassuring, and interesting comment re trends in nickel prices.

LOW COST NICKEL MINE POTENTIAL
Digger Rocks now at forefront for nickel miner Western Areas
Growing Western Australian nickel producer Western Areas NL is looking to open up an old open cut as the next step in a quest to achieve annualised production of 25,000 tonnes of contained nickel by 2010.

Author: Ross Louthean
Posted: Tuesday , 10 Jul 2007

PERTH -

The Digger Rocks open cut in the Forrestania belt, south of Southern Cross in Western Australia, is now earmarked as the next phase of mine development for Western Areas NL.

The company said today that a cutback on the Digger Rocks open cut - one of the mines operated in the region from 1992-99 by Finnish company Outokumpu Oy - could be the next stage of mining expansion in the region.

A review of previous drilling identified widths of up to 50 metres of disseminated nickel sulphides that could be accessible by cutting back the western wall of Diggers Rock.

Remnant ore at Digger Rock was now estimated at 1.667 million tonnes grading 0.99% nickel for 14,265t of contained metal.

Western Areas is listed on both the Australian and Toronto stock exchanges and is currently deriving its cash flow from the Flying Fox underground mine - ranked as one of the highest grade nickel mines in the world -- where record development rates have been recorded from June to early July.

In the six months to June, Western Areas treated about 25,000t of stope and development ore from Flying Fox's T Zero deposit, where production is expected to increase from the current 5,000-7,000t of ore to 15,000t per month when full development is achieved.

Chief Financial Officer Craig Oliver told Mineweb that a cutback on the Digger Rocks open pit was now considered economic even if the nickel price went down to between $US8-10/lb. The company said today there was potential to mine 700,000t @ 0.7% Ni to recover 4,900t from the pit.

If the cut back went ahead, then a related step was expected to be refurbishing the Digger Rocks underground mine to access a known resource of 64,000 tonnes @ 3.7% Ni. This would prompt a need to dewater the hydrologically-integrated Digger Rocks and Digger South workings.

Oliver said that Western Areas is looking to open up five operating mines at Forrestania, including Digger South, Digger Rocks, the neighbouring New Morning and Daybreak and regional targets.

He said that at this stage Western Areas was still to consider going back into Cosmic Boy which had been Outokumpu's flagship mine in the area.

Meanwhile, resource drilling on the T1 and T2 targets at Forrestania has been completed and an updated mineral resource was expected in July. The T6 target that relates to potential depth extensions of Flying Fox is now subject of a drilling partnership with Kagara Zinc, which purchased ground in the Forrestania area from LionOre International for $A25 M ($US21.13 M).