Western Areas clarifies access to Flying Fox decline 12:13, Thursday, 17 July 2008
Sydney - Thursday - July 17: (RWE Australian Business News) - Following a release by Kagara Ltd (ASX:KZL) on July 8, Western Areas NL (ASX:WSA) today sought to clarify statements included in the release which related to Western Areas's Flying Fox mine decline. Directors said, "Western Areas considers that certain statements in Kagara's release could imply that Kagara may have access to the Flying Fox mine decline in December 2009 and that Kagara's right to access the decline is subject only to the decline having sufficient haulage capacity and Kagara reimbursing a component of the decline capital cost. "The issues Western Areas wishes to clarify are concepts that are intended to form the basis of an Access Agreement, the terms of which are yet to be negotiated between Western Areas and Kagara. "An Access Agreement will be required in the event that Kagara intends to mine nickel ore on the Lounge Lizard tenement (M77/545) and use Western Area's Flying Fox decline to bring that ore to the surface. "Flying Fox is located on an adjacent mining tenement."
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The directors continued, "Western Areas rarely comments on other company releases. However, we have received many enquiries on the impact that Kagara's implied timing of access to the Flying Fox decline could have on Western Areas's production. "Western Areas has announced target production of 8000t nickel from Flying Fox in 2008 ramping up to 14,000t (and potentially 20,000t) by 2011. "Based on Western Areas's feasibility studies, the decline is expected to be fully committed to mine development and production at the Flying Fox T1, T4 and T5 deposits (excluding potential extensions) at least until 2014. "The decline may also be extended to the T6 and T7 deposits where drilling is in progress to define mineral resources in this area of the mine. "An existing Deed of Covenant describes Kagara's rights to access the Flying Fox decline and defines the concepts that are intended to form the basis of an Access Agreement."
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