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The Board of Western Areas announce that a total 6,278 tonnes of nickel in ore was mined in the first two months of FY 2010/2011.
This exceeds budget for this period by 60% and provides further confidence that the FY 2010/2011 target of 25,000 tonnes of nickel mined per annum from Flying Fox and Spotted Quoll will be reached. Bonanza grades (7.6% Ni) and ore tonnes additional to the ore reserve are being mined from the Tim King Pit at Spotted Quoll. 3,864 tonnes nickel was mined from Tim King Pit, double the budget of 1,932 tonnes nickel for July / August. Tim King Pit will extend to 140m depth over the next two years. High levels of production at Forrestania are expected to be maintained as the Spotted Quoll underground is developed and Flying Fox T5 orebody ramps up to full production. Milled production for July and August was 4,656 tonnes nickel in concentrate. Mill recoveries were in line with expectations averaging 92% for Flying Fox and 84% for Spotted Quoll. Offtake Discussion
Western Areas has a two year contract to sell a total 25,000 tonnes of nickel in concentrate to Jinchuan, China‟s largest nickel producer. In addition to exporting nickel to Jinchuan, Western Areas sells 10,000 tonnes of nickel in concentrate pa to BHP Billiton‟s smelter at Kambalda and has a short term contract to sell oxide ore from Spotted Quoll to Minara Resources. Export of concentrate to Jinchuan commenced on 28th July. Two shipments with a total 15,000 tonnes concentrate containing 2,100 tonnes nickel have already been sent from Esperance Port and a third is expected in September. Western Areas has received provisional payment for these shipments. The Company has ordered 200 new containers in addition to the 750 containers which are currently leased, to increase the rate of transport of stockpiled concentrate to China. China is becoming the dominant global importer of nickel to supply expanding stainless steel, plating and battery industries. Available nickel supply to China is approximately 350,000 tonnes pa compared with growing demand up to 450,000 tonnes. At the same time, China is planning to reduce domestic nickel pig iron production because of energy restrictions. Managing Director, Mr Julian Hanna said: “Western Areas is exploring new opportunities in China and introducing the Company to new investors in the region. With the commencement of exports through Esperance, it is logical we should look to expand our activities in China”. Exploration Update
Drilling efforts remain focused on expanding mine life at Flying Fox and Spotted Quoll to ten years. Current Ore Reserves at Spotted Quoll represent approximately nine years mine life and at Flying Fox (excluding Lounge Lizard) approximately six years mine life. Drilling is in progress at Spotted Quoll to define additional mineral resources to approximately 1,000m depth. A major drilling program is also planned to start in the December Q at Flying Fox to define extensions to the T6 and T7 deposits and test the predicted T8 position. In addition, there are two new targets generating encouraging early results. At New Morning, mid way between Flying Fox and Spotted Quoll, drill hole NMD 137 W1, intersected 123.5m @ 0.7% nickel from 675.9m down hole depth (including 6m @ 1.9% nickel). The geology and mineralisation are similar to that seen on the margin of Flying Fox and suggest that potential may exist for a massive sulphide „channel type‟ deposit in the vicinity. Follow up drilling and down hole EM surveys are in progress to test this potential. A recent drillhole NED 032 at North Endeavour, 6km south of Cosmic Boy plant, intersected 0.5m of massive sulphide from 167.6m down hole depth. Preliminary Niton values up to 6% nickel were estimated for the intersection which is associated with a down hole EM conductor. Assays and further drilling are required to determine the significance of this new discovery. |
