Western Areas NL: Major Increase in Mineral Resource at Spotted Quoll to 2.0 Million Tonnes @ 6.2% Nickel
Mon Jan 12, 8:00 AM
ca.news.finance.yahoo.com
PERTH, AUSTRALIA--(Marketwire - Jan. 12, 2009) - THIS NEWS RELEASE IS The Board of Western Areas (TSX: WSA.TO)(ASX: WSA.AX) is pleased to announce a major increase in the high grade mineral resource at Spotted Quoll. The revised mineral resource at Spotted Quoll now comprises a total 2,021,600 tonnes at an average grade of 6.2% nickel for 125,460 tonnes contained nickel to only 640m vertical depth. This represents a 67% increase in contained nickel compared with the previous mineral resource announced on 2nd September 2008.
Since the discovery of Spotted Quoll in October 2007, high grade mineral resources have been added at the rate of around 10,000 tonnes nickel per month. Spotted Quoll is one of the most continuous high grade nickel deposits in the world and remains open at depth and along strike.
Spotted Quoll already exceeds Flying Fox in size even though the current limit of drilling is only equivalent to the bottom of the Flying Fox T1 deposit, which is now being mined. In comparison, high grade nickel has been intersected at Flying Fox down to 1350m depth which is the current limit of drilling at the T7 deposit.
The previously announced deepest drill hole at Spotted Quoll, WBD 109W2/W2 intersected 8.0m @ 4.7% nickel (including 4.6m @ 7.4% nickel) in a geological setting similar to a 'primary lava channel type' nickel deposit, rather than the 'remobilised sediment hosted type' deposit seen at shallower depth. Western Areas considers this is very encouraging and indicates potential for an even larger deposit at Spotted Quoll. Drilling will continue to test for extensions even though the current mineral resource appears to be sufficient to support the initial 10 years target mine life.
An ore reserve for the Spotted Quoll open pit is due to be announced soon. Permitting for the open pit mine is progressing and the target date for first production is in the December Q 2009. The preliminary scoping study for an underground mine at Spotted Quoll has commenced.
A systematic exploration program will be carried out in 2009 along the 25km long Western Nickel Belt with the aim of finding another Spotted Quoll or Flying Fox type deposit.
Flying Fox Mine and Cosmic Boy Plant update
The Flying Fox mine is continuing to meet all expectations. The first full year target production has been exceeded with 200,600 tonnes ore hoisted at an average grade of 4.05% nickel for 8,114 tonnes nickel for the 12 months ending 31 December 2008.
In the December quarter, ore haulage from Flying Fox increased to the annualised rate of 350,000 tpa ore, which is the current capacity of the decline. The decline has advanced behind the centre of the large T4 deposit and mine development is being established towards T4.
Final construction work is being completed at the Cosmic Boy plant and initial commissioning of the crushing circuit is complete. Full commissioning of the plant is due in February.
Mineral Resource Estimate
The previous mineral resource estimate for Spotted Quoll was announced on 2 September 2008. It comprised a total of 1,045,600 tonnes at an average grade of 7.2% nickel for 75,140 tonnes contained nickel. The majority (88%) was in the Indicated Mineral Resource category.
The revised mineral resource estimate for Spotted Quoll is based on the laboratory analytical results of 106 surface diamond drillholes and 14 surface RC drillholes completed between October 2007 and December 2008. It comprises a total of 2,021,900 tonnes at an average grade of 6.2% nickel for 125,460 tonnes contained nickel. The larger part of the mineral resource (62%) is in the Indicated Mineral Resource category.
Mineral Resource Parameters: The Mineral Resource estimate was completed by Mr John Haywood who is a full-time employee of Western Areas NL. Massive and matrix sulphide mineralisation was modelled as 3D solids, and a block model was created using "Datamine Studio" software, filling the solids with cells and sub-cells; with Ni estimated by Ordinary Kriging. Samples were analysed also for water soluble nickel, and this was modelled by metallurgical domain, and has been subtracted from total modelled nickel. A lower cut-off was not applied to reported tonnage and grade due to very small percentage of material below 2% Ni. The mineralisation at Spotted Quoll exhibits good continuity of width and grade.
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Item Details Comments
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Cells Size 5m (X) by 10m (Y) by 5m (Z) Sub-celled to match solids
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Interpolation Ordinary Kriging Validated by ID2 estimate
Method
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Search Radii Variable by domain Nominal 60m by 60m by 7.5m
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Nominal Drill 20m by 20m near surface,
hole spacing varying to 80m by 80m at depth
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Surface diamond drillhole collar surveys used differential GPS; downhole surveys used a gyroscopic instrument; a comprehensive density database was utilised; there is high assay confidence with systematic QA/QC procedures; a validated acQuire database. An alternate inverse distance squared estimate was made to validate the ordinary kriged resource. A validation of drillholes against block model grades was made.
The full release including diagrams can be viewed at the Company's website at www.westernareas.com.au.
QA-QC STATEMENT:
Mr Adrian Black from geological consultants Newexco Services Pty Ltd ("Newexco") is responsible for the verification and quality assurance of the Company's exploration data and analytical results from the Forrestania Nickel Project. 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 mineral resources and mine development activities is based on information compiled by Mr John Haywood and Mr Julian Hanna of Western Areas NL. Mr Haywood and Mr Hanna are members of AusIMM and are full time employees of the Company. Mr Haywood and Mr Hanna have 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 Haywood and Mr Hanna consent 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. These include: "Spotted Quoll is one of the most continuous high grade nickel deposits in the world and remains open at depth and along strike", and "similar to a 'primary lava channel type' nickel deposit, rather than the 'remobilised sediment hosted type' deposit", and "Western Areas considers this is very encouraging and indicates potential for an even larger deposit at Spotted Quoll", and "target date for first production is in the December Q 2009", and "annualised rate of 350,000 tpa ore, which is the current capacity of the decline". 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 Spotted Quoll deposit 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.
Contacts
Julian Hanna
Western Areas NL
Managing Director
+61 8 9334 7777
Email: jhanna@westernareas.com.au
Craig Oliver
Western Areas NL
Finance Director
+61 8 9334 7777
Email: coliver@westernareas.com.au
Website: www.westernareas.com.au
Paul Downie
Porter Novelli
Director Investor Relations
+61 8 9386 1233
Email: pdownie@wa.porternovelli.com.au |
