Spotted Quoll nickel deposit exceeds expectations

The Board of Western Areas announced on Friday that the first mineral resource...

  The Board of Western Areas announced on Friday that the first mineral resource estimate to 200m depth at the Spotted Quoll deposit has already exceeded the Company’s announced target of 30,000 tonnes contained nickel.The Spotted Quoll mineral resource comprises a total of 545,600 tonnes at an average grade of 6.3% nickel for 34,500 tonnes contained nickel. The majority (87%) is in the higher confidence Indicated Mineral Resource category. This latest mineral resource has increased the total amount of contained nickel currently defined in mineral resources at the 100% owned Forrestania Nickel Project to 256,600 tonnes. The mineral resource at Spotted Quoll is based on 36 surface diamond drillholes drilled between October 2007 and April 2008. Further drilling is required to test if the mineralisation extends closer to the surface in this area. Importantly, the initial mineral resource does not include significant intersections in two drill holes WBD064 and WBD057, approximately 25m and 170m below the mineral resource. Western Areas recently announced an intersection of 17.3m @ 9.8% nickel in WBD064 based on preliminary Niton analyses (refer to disclaimer). The Spotted Quoll mineral resource has been passed on to Western Areas mine development team to evaluate a range of alternatives to fast track the deposit into production. Optimisation studies will be carried out in the June Q to determine if an open pit mine with subsequent underground development (similar to Jubilee’s former Cosmos mine) would provide the best return from Spotted Quoll. Future development is expected to benefit from substantial existing infrastructure at Flying Fox 6km to the north and at Cosmic Boy 15km to the south. Infrastructure includes power, roads, accommodation village, bore fields, water disposal etc. Preliminary metallurgical testwork on the mineralisation is already in progress. Initial results indicate 16% nickel concentrate grade is readily achievable and that most of the gersdorffite (nickel arsenic sulphide), where it occurs, can be rejected during flotation. Environmental permitting is also being addressed for development of the project and to minimise impact on a local population of declared rare flora (DRF) which occurs 150m south of the of the current drilling area of current drilling. Drilling at Spotted Quoll is now testing the potential for significant extensions below the initial mineral resource in a panel extending from approximately 200m to 400m depth.