robust scoping study supports open pit mine, page-22

Here we go- make it easy- and market must like it- up she goes again today - whooshka

Emerging miner Western Areas lifts new mine prospects | May 19, 2008
EMERGING nickel sulphide miner Western Areas has lifted the expected annual production from the exciting Spotted Quoll prospect to 8000 tonnes based on the findings of a recently released scoping study.

The study suggested that an open pit operation at Spotted Quoll could also yield net cash flows of $380 million based on the current nickel price of $US12 a pound and cash costs of less than $US1.50 a pound.

The company said it would take "all steps to fast track" development of the proposed combined open pit and underground mine to bring it into production next year at an expected capital cost of $28 million. Ore from the project will be treated at the Cosmic Boy concentrator, which is due to be commissioned in the first three months of the new year.

"Minimal additional capital expenditure is required to develop the mine," managing director Julian Hanna said in a statement.

"We think that potential remains for further discoveries of this type and have stepped up our exploration program to find another one (like Spotted Quoll)."

Based on metallurgical testwork already completed, Western Areas expects to produce a high-grade 16 per cent nickel concentrate from Spotted Quoll.

Western Areas expects to update the resource at Spotted Quoll, which currently stands at 545,600 tonnes of ore grading 6.3 per cent nickel for 34,500 tonnes of contained resource, within three months.

The Perth-based company wants to have a global resource of 300,000 tonnes of nickel sulphide by the end of the year.

Western Areas has been one of the best performers on the share market this year, more than doubling its market capitalisation to $1.94 billion.

The market's love affair with the company has intensified as it continues to deliver good exploration results from its Forrestania projects as the company fills a void for nickel sulphide producers left by the takeover of Jubilee Mines by Xstrata.

Western Areas hopes to be a 35,000-tonne-a-year producer by 2011, with the bulk of production to come from the Flying Fox deposit about 6km to the north of Spotted Quoll.