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WESTERN AREAS NL

1 September 2006 ASX & TSX Symbol: WSA

FLYING FOX MINE DEVELOPMENT AND EXPLORATION UPDATE

The Board of Western Areas is pleased to announce encouraging progress on the mine decline as it approaches the first ore body at Flying Fox, T Zero (North). The decline has less than 100m of advance to go before intersecting T Zero and first ore production is expected in early October. With nickel prices at record levels, production from T Zero is expected to be sold at spot prices.

Drilling has been stepped up at T Zero with two diamond drill rigs now targeting extensions to the deposit, south of the dolerite dyke “T Zero (South)”. Encouraging intersections of massive and stringer sulphides have been reported in a number of drill holes in this area and the Company anticipates an initial mineral resource will be estimated for T Zero (South) in the December quarter.

Flying Fox Mine Development

The decline is now below the horizontal fault zone which previously caused some delays and mine development has returned to a routine advance rate. The dewatering system has been very successful in managing water inflows encountered along the fault zone and the decline face is dry.

Flying Fox – T Zero (South)
Recent drill holes at T Zero (South) include FFD 177 W4 which intersected 5.4m @ 5.1% nickel and FFD 177 W5/W2 which intersected 3.4m of massive and stringer sulphides for which assays are awaited. These intersections are shown on the longitudinal projection in this release.
Flying Fox – T5

Further high grade assay results have been received for drill holes in the area 100m south and above the T5 ore reserve. FD 163 W11/W1/W2 intersected 5.0m @ 5.5% nickel plus 5.6m @ 5.8% nickel and FFD 163 W11/W1/W1 intersected 1.9m @ 10.0% nickel including 0.6m @ 19.8% nickel. The locations of these drill hole intersections are shown on the longitudinal projection in this release.

Underground Manager Peter Cullinan, General Manager of Operations Dan Lougher and Exploration Manager Adrian Black
with Company Director Terry Streeter, at Flying Fox.
Flying Fox Interpreted Longitudinal Projection (Drill hole intersections shown are down hole widths)

FORWARD LOOKING STATEMENT: This release may contain certain forward-looking statements which are subject to a variety of risks and uncertainties beyond the Company's ability to control or predict and which could cause actual events or results to differ materially from those anticipated in such forward-looking statements. An example of a forward-looking statement in this release is “frrst ore production is expected in the early October”. The Company does not undertake to release any revisions to forward looking statements included in this release to reflect events or results after the date of this release except as may be required under securities laws.
DISCLAIMER: This release 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. 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. Potential investors should also refer to Western Area’s public releases on the results of the Flying Fox Stage Two feasibility study dated 15 March 2006 and 20 April 2006 as well as subsequent releases.
The information within this report as it relates to geology was compiled by Mr Julian Hanna from Western Areas and Mr Adrian Black from Newexco. Mr Hanna is a member of the Australian Institute of Mining and Metallurgy and Mr Black is a member of the Australian Institute of Geoscientists. Mr Hanna and Mr Black have sufficient experience relevant to type of deposit under consideration to qualify as Competent Persons and consent to the inclusion of this information in the form and context in which it appears in this report.