Forrestania
Introduction
The Forrestania Nickel Project is located 400km east of Perth, in Western Australia. The project contains extensive Archean Greenstone belts and substantial exploration potential. More than 25 nickel occurrences have already been identified.
Flying Fox is the first mine to be developed at the Forrestania project and is one of the highest grade nickel mines in the world.
Western Areas plans to develop five mines at the project from 2011, for a targeted production around 35,000 tonnes per annum of nickel.
Western Areas has set out the following Targets at Forrestania:
- Publish the Mineral Resource for the Spotted Quoll discovery in the Dec Quarter (to a depth of 640m) - ACHIEVED. 125,460 t contained nickel @ 6.2%
- Achieve steady state production from the T1 zone of Flying Fox by March / April 2008 – ACHIEVED. Four ore drives established.
- Scope the size and potential of the T6 and T7 zones at Flying Fox by the March Quarter 2010
- Flying Fox mine decline to reach the T5 zone deposit by December 2009 – ACHIEVED.
- Increase the current resource inventory at Flying Fox by 50% to 150,000 tonnes of contained nickel
- Commission the stage two concentrator plant at Cosmic Boy by early Second Quarter 2010 - ACHIEVED.
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Mine Production
Flying Fox mine is now in full production. In its first full year of production it produced 200,597 tonnes at 4.05%, containing 8,118 tonnes of nickel in concentrate.
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| Note: This graph represents Western Areas production targets which may vary depending on a wide variety of factors including nickel price, future estimation of ore reserves, mining costs, geotechnical issues, environmental permitting and future mine development and production rates. Apart from Flying Fox and Diggers South, production targets are not yet based on complete feasibility studies and may be varied at any time. Western Areas is currently reviewing development timetable for Spotted Quoll. Potential or existing investors should not rely on these graphs as a basis to invest in Western Areas NL. |
Mine Development
Flying Fox consists of a number of zones of mineralisation, labelled from T Zero extending vertically down to the recently discovered T7 zone. The discovered mineralisation at Flying Fox now extends for more than 940 metres vertically below the T1 level (1.4km from surface), in a zone up to 600 metres wide to the limit of drilling.
Positive drilling results continue at Flying Fox and the target for 2009 is to increase resources by 50% to 150,000 tonnes of contained nickel. Western Areas' produced 8,000 tonnes of nickel in the first full year of production at Flying Fox. Production is cash flow positive and is entirely hedge free. Flying Fox will be one of Australia's lowest cost nickel mines.
The increase in resources at Flying Fox, particularly at depth, has lead Western Areas to consider the use of a shaft to further increase production, in addition to the decline development. The shaft has the potential to increase production at Flying Fox to over 20,000 tonnes per annum of nickel by 2010.
The Spotted Quoll Open Pit mine has been named the Tim King Pit after Timothy King who was one of the founders and an early director of Western Areas. The Tim King Pit received final environment approval and formal Board approval during the September Q. Spotted Quoll (discovered October 2007) 6km South of Flying Fox. The Mineral Resource increased 67% to >2.0Mt at an average grade of 6.2% nickel, containing approx 125,460 tonnes nickel to 640m depth. The Tim King Pit is ahead of forecast with approxiametely 1.5 million bcm of waste removed since mining commenced in the December Q. First High grade ore is expected to be intersected in the open pit in April with a shceduled average production rate of 400t nickel per month in June Q 2010 increasing to 1,100 per month in September Q 2010. The ore reserve and feasibily study for the proposed 10 year underground mine at Spotted Quoll is targeted for completion in mid 2010.
The initial surface infrastructure works at Diggers South were completed in Dec 2008 to enable an early start to access the Digger Rocks underground mine. The mine dewatering pumps were tested for four days. The pipeline route from Cosmic Boy to Digger Rocks for the Spotted Quoll dewatering disposal was cleared and the pipeline delivered. 30% of the 22m setions of 450mm diameter pipe have been welded leaving around 12km to be completed in the March Q. The Digger Rocks evaporation pond will be used in this Q.
Stoping operations at Flying Fox are ongoing in the T Zero ore body and in the top level of T1. The main decline is advancing in the footwall sediments of the T1 deposit and is currently >870m below surface. Ground conditions remain excellent.
A recent detailed review of mine infrastructure and stoping methodology has resulted in a positive change in the ore production schedule. More ore will now be won from long - hole open stopes with two main stoping blocks being the 955 stope (85,000 t @ 5.13% nickel) and 945 stope (100,000 t @ 4.89% nickel). Development to these stopes is in progress and first ore from this area of the mine was extracted in March 2008. The new mine plan will facilitate the increased production target of 20,000 tonnes ore per month.
Reserves & Resources
Growth in Forrestania Mineral Resources over 6 years
| Note: This graph takes into account mining depletion of ore reserves from Flying Fox T1. Western Areas is also reviewing the Cosmic Boy and Diggers South mineral resources and a revision is expected in the March Q 2009. The mineral resource for Flying Fox T4 is expected to be revised in the March or June Q’s 2009 based on the ongoing drilling programs. |
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Offtake
Western Areas is currently toll treating Flying Fox ore at the Cosmic Boy concentrate plant.
Norilsk Nickel Australia Pty Ltd has excluded Diggers South from the OTCPA. Importantly, this enables Western Areas to negotiate improved commercial terms for Diggers South concentrate. Norilsk retains a pre-emptive right to match terms offered by a third party for Diggers South.
As part of the Diggers South pre feasibility study, Western Areas is currently seeking offtake terms for the sale of nickel concentrate to complete the commercial part of the study.
The Cosmic Boy nickel concentrator is now commissioned and was officially opened by the Western Australian Minister for Mines and Petroleum on 24th March 2009. The Stage One Plant is fully operational with the Stage Two expansion being officially opened on 10th June 2010 by the Western Australian Minister for Mines and Petroleum. This has doubled the capacity of the plant to 550,000 tpa ore. The Board believes that this central concentrate plant will establish Forrestania as a major nickel province producing ore from a number of sources.
Benefits from constructing a plant at Cosmic Boy include:
- Ownership and management of the concentrate process
- Ability to improve metallurgical recoveries
- Ability to blend high and low grade ores from a number of deposits
- Reduced ore transport costs from Diggers South
- Potential to significantly increase profitability
Flying Fox Long projection
Spotted Quoll
Activity at the Tim King Open Pit during the March Q focused on Stage 1 capital waste removal and completing the associated infrastructure including workshop, office blocks and the mining ore pad. Surface dewatering bores were fully commissioned during the March Q. These are pumping as designed with the water table dropping ahead of Stage 1 pit production.
The Project was ahead of schedule for the March Q and a total of 3.0M BCM of Stage 1 capital waste has been mined to date. The Stage 2 pit cut back also commenced during the quarter.
Western Areas announced on 1st April that high grade nickel production had commenced at the Tim King Pit, two weeks ahead of schedule. To date approximately 15,000 tonnes at 4.2% nickel containing 624t nickel of supergene sulphide and oxide mineralisation has been mined from the Pit. Production includes the first 'lower supergene' mineralisation with 950 tonnes averaging 9.9% nickel mined to date.
The Company is considering a number of options to treat this high grade material including blending it with Flying Fox ore. The Tim King Pitt is currently at 35m depth and mine production is expected to progress from supergene to primary sulphide ore over the next six months. Metallurgical test work was conducted during the March Q to confirm previous recovery work undertaken for the Tim King Pit and further optimisation test work will be conducted during the June Q.
Current Ore Reserves at Spotted Quoll including the Tim King Pit and proposed underground mine were announced on 19th March 2010. Probable Ore Reserves comprise 2,111,000 tonnes at an average grade of 4.3% nickel for 90,100 tonnes (199M lbs) nickel.
Significance of the Recent Spotted Quoll Discovery
The discovery of the high grade Spotted Quoll deposit has opened up the potential for further discoveries of this type along the 25km long Western Nickel Belt at Forrestania. Drilling along the central 6km portion of the Western Nickel Belt during the past five years has resulted in many outstanding intersections, including:
- WBD 064 18.3m @ 10.4% nickel (Spotted Quoll deposit)
- WBD 028 8.7m @ 11.4% nickel (Spotted Quoll deposit)
- FFD 133B 21.4m @ 7.8% nickel (Flying Fox T1 deposit)
- FFD 163 W9 16.1m @ 9.7% nickel (Flying Fox T5 deposit)
- FFD 160 W2 24.0m @ 7.8% nickel (Flying Fox T5 deposit)
- NMD 126 20.0m @ 6.8% nickel (Daybreak deposit)
These intersections indicate that this is one of the most prospective and highest grade nickel camps in the world. Western Areas considers that the Western Nickel Belt is a major regional contact which separates the Southwest granite/gneiss terrain from the Kalgoorlie/Southern Cross greenstone terrain to the east.
Diggers South
Western Areas is targeting Diggers South (planned fourth nickel mine) at the Forrestania Nickel project. Diggers South consists of the previous Digger Rocks mine and the new Diggers South deposit.
The pipeline from Cosmic Boy to Diggers South was commissioned during the June Q. Water from Spotted Quoll mine is now being discharged into the 40ha evaporation pond at Diggers South, which is 40lm South of Spotted Quoll.
A drilling campaign has commenced to test extensions to the New Morning / Daybreak deposit, midway between Spotted Quoll and Flyiing Fox. Drilling is based on a revised interpretation of the geology which had identified the potential below two granite sheets intruded along the Outokumpu and T3 Faults. These faults extend from the Flying Fox mine, 3km to the north.
Two diamond drill holes were completed 200m north and below the mineral resource at New Morning to test the potential for extensions to high grade massive sulphide mineralisation north the of the known deposit. The results of the two drill holes at New Morning are considered very encouraging as they extend the nickel mineralisation well north of previous drilling . Drilling is now underway to find the centre of the lava channel which could host high grade massive sulphide to Flying Fox, below granit intrusions.
Simplified geology of the Western Nickel Belt showing an interpretation of the prospective ultramafic units (red) which are the primary host for the high grade nickel mineralisation |
Cosmic Boy
Existing Cosmic Boy mine boxcut entry was exposed January 2009 to
Outokumpu's large underground mine which ceased production in 1999. No further work was carried out at Cosmic Boy during the March Q. A scoping study to re enter the existing decline will be carried out in the second half of the year if the nickel price remains favourable.
Cosmic Boy Villiage
The Cosmic Boy Village is now complete with a capacity of 494 rooms. This now has the capacity for all current operational personnel and the expanded treatment facilities at the Forrestania Nickel Project.
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