Growth PortfolioWestern Areas has consolidated its substantial nickel interests in the 'Central Yilgarn Nickel Province' which extends approximately 500km from Sandstone to Ravensthorpe. Western Areas holds interests in seven nickel projects (including Forrestania) in the region which are all considered to have excellent potential for new discoveries.
Koolyanobbing (WSA 100% of nickel rights)
In July 2006, four reverse circulation drill holes were drilled within a 1.5 km strike zone enclosing the Jock's Dream prospect in the Koolyanobbing North Nickel project to test IP geophysical targets along strike from known nickel sulphide mineralisation. Early explorers at Jock's Dream (BHP and Delta Gold) intersected nickel sulphide mineralisation with the best previous result being 6.7m at 2.6% nickel.
Western Areas intersected nickel sulphides including 1m @ 4.0% nickel in shallow drilling 250m northwest of Jocks Dream. The mineralisation occurs as massive and stringer sulphides and provides encouragement that significant massive nickel sulphides will be intersected at depth.
Further diamond drilling was undertaken in late 2007 at the Jocks Dream prospect. Three diamond drill holes were drilled below a 500m long nickel sulphide zone discovered in the 1970s and extended by Western Areas in 2006 using a combination of IP surveys and RC drilling. Both holes intersected massive and stringer sulphides.
Sandstone (WSA earning 70% of nickel rights from Troy Resources)
In November 2007, Western Areas announced an agreement to explore a large area of nickel prospective tenements in the Sandstone greenstone belt in a JV with Troy Resources NL. Western Areas can earn a 70% interest in nickel and related metals in a large area of prospective geology with minimal nickel exploration.
Work during the March Q involved the evaluation of encouraging results announced in the previous quarter and diamond drilling at Area C and Area D. The current focus of exploration is along a >7km long belt in the southern part of the Sandstone JV tenements. Two shallow diamond drill holes and two RC holes were drilled at Area C in the March Q and one diamond drill hole was completed at Area D.
On 8th March 2010 Western Areas announced that diamond drill hole WAD002 had intersected disseminated and vein style sulphides over a wide interval at Area C. The intersection starts from the base of oxidation to approximately 90m down hole depth. The host is a strongly carbonated ultramafic sequence.
Assay results for the disseminated zone in WAD002 returned 26.2m @ 0.4% nickel from 60.3m including a narrow interval of semi massive sulphides which analysed 0.2m @ 4.1% Ni from 86.3m down hole depth. Initial interpretation suggests that the mineralisation is associated with a folded sequence of orthocumulate ultramafic rocks. Data compilation is in progress and assays are awaited from other drill holes at Area C.
This is the first known occurrence of nickel sulphides in drilling at Sandstone. Although exploration is still at an early stage, these results are considered to be very encouraging. There is minimal outcrop or previous nickel drilling within the central portion of the project where ultramafic rocks occur over a wide area(approximately 25km by 10km). The association of prospective geology with nickel sulphide mineralisation highlights the potential of the Sandstone JV project, 400km north of the Forrestania Nickel Project.
Location plan showing recent RAB/RC Drilling over aeromagnetics
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Lake King (WSA earning 70% of nickel rights from Swan Oak)
Western Areas is earning 70% interest in the Lake King project located 80km south west of Forrestania. The main interest is at the "Nickel Hill" prospect where soil sampling has returned anomalous nickel, copper, PGE and base metal values over a 300m area. An IP geophysical survey in July 2006 defined a strong response in the area of the soil anomaly.
Western Areas completed six RC drill holes to test a strong geophysical (IP) anomaly coincident with a surface nickel/copper geochemical anomaly. The results are the first reported occurrences of nickel sulphides in the Lake King greenstone belt which is located 80km south of Forrestania. The target remains open at depth and to the south.
The intersection in LKRC006 (announced previously) is significant as it is the first recorded intersection of nickel sulphides in the Lake King greenstone belt. Lake King is effectively unexplored for nickel. Further drilling is planned to test the source of the IP anomaly and the potential for economic nickel mineralisation south of LKRC006.
Three diamond drill holes were completed during the quarter for a total of 1,036m. The drill holes were drilled to further test around previously announced LKD001 which intersected a number of ultramafic units, with a thin (1cm) vein of massive sulphide 176m which averaged 9% nickel (uncalibrated niton analysis) and drill hole LKR006, which intersected 15m at 0.4% nickel including 1m at 0.8% nickel at 190m depth.
The recent drilling revealed a high grade metamorphic sequence of rocks containing a number of ultramafic units. Compilation of the drilling results and downhole geophysics is in progress. Western Areas has a substantial tenement holding with several priority targets identified at the Lake King joint venture.
Mt Alexander (remaining 25% interest in JV with BHP Minerals)
Western Areas recently announced preliminary results from two diamond drill holes drilled by BHP Billiton at the Cathedrals Prospect. Both drill holes intersected high grade nickel/copper values associated with massive sulphide. Final assay results confirmed the two intersections and indicate that it is a new high grade nickel/copper/PGE discovery with significant exploration upside.
These early results are considered to be very encouraging for a number of reasons:
1. Both intersections consist of fresh massive sulphide at shallow depth
2. The mineralisation is completely open along strike and down dip
3. High grade nickel is associated with high copper and PGE values
4. Highest PGE assays are: 6.7g/t Palladium, 0.9g/t Platinum, 1.0g/t Rhodium
5. The geological setting shows similarities to the Flying Fox mine, 350km south
Southern Cross Goldfields (WSA major shareholder)
Western Areas has restructured its interests in the former Bullfinch North joint venture (with Polaris Metals Ltd) and has subscribed to six million shares in Southern Cross Goldfields Ltd (SXG). As a result, Western Areas expects to become the second largest shareholder in SXG after Polaris. SXG listed on the Australian Stock Exchange on 20 March 2008.
SXG is a gold and nickel exploration company whose main asset is a large tenement holding in the central part of the 'Central Yilgarn' nickel province. Western Areas also retains a right to claw back a 55% interest in any nickel discovery at Bullfinch North before September 2010.
Mt Jewell
Mt Jewell (Magma Metals earning 60% interest from WSA)
The Mt Jewell project is located 65km north of Kalgoorlie and 20km along strike to the northwest of the Silver Swan and Black Swan nickel deposits (approximately 185,000t nickel – production and resources) and contains a 20km strike length of a highly prospective komatiite sequence. The tenements cover an area of 40km2. Three main prospects were identified during historic exploration – Ringlock, GSP and Mt Jewell. A nickel sulphide Inferred Mineral Resource of 86,000t at 2% nickel has been defined by previous explorers at the GSP prospect. Magma Metals has earned a 60% interest in the project through exploration expenditure and is currently managing the exploration program.
GSP Extensions: Potential exists for discovery of down-plunge extensions and remobilized sulphide bodies associated with the GSP resource. The short strike length of the deposit is analogous to the upper levels of the high-grade Silver Swan deposit. Further drilling to test the potential for resource extensions is planned.
Western Australia Nickel Interests Map
East Bull Lake - Ontario, Canada (WSA earning 65%)
On September 12, 2008 Western Areas announced a joint venture with Mustang Minerals (TSX:MUM) to explore the East Bull Lake Project. East Bull Lake is a 20km long mafic intrusive complex which consists of two separate zoned intrusions joined by a 5km long feeder dyke.
Initial drilling of a VTEM anomaly (Parisien Lake) in early 2008 yielded intersections including 1.1m @ 9.3% copper and 12.5g/t PGM from 89m down hole depth and 10m @ 0.4% nickel at shallow depth. Historical drilling prior to Mustang's involvement intersected 0.5m at 3.9% nickel in the central part of intrusion.
Western Areas has targeted potential for sulphide hosted nickel-copper-PGM deposits associated with a number of VTEM conductors in three areas of the intrusive complex. During the June Q two diamond holes were drilled to test the Novick Lake and Sables VTEM conductors. Evaluation of the results of the recently completed drillholes and down hole geophysics is in progress.
- Novick Lake: Drill hole N1 intersected a predominantly gabbroic sequence to 390m followed by an anorthositic gabbro to anorthosite sequence to the end of hole (EOH 491m).
- Sables:
Drill hole S1 intersected a sedimentry sequence below 20m of gabbro with a mafic to gabbro anorthosite sequence from 115m to the end of hole (EOH 154m).
Bioheap
On 22 December 2009, Western Areas announced that it had exercised its option to acquire 100% of the BioHeap bacterial leaching technology from Pacific Ore Ltd (ASX:PSF). Due diligence included a successful test work program on a range of low grade ores from Forrestania, an evaluation of global patents on the technology and confirmation of various commercial aspects of the transaction.
BioHeap is a bacterial heap leaching technology developed to leach low grade sulphide ores to produce intermediate products which can be sold directly to nickel refineries. A large amount of test work has been successfully carried out on a range of nickel and copper deposits. Test work commenced on mineralisation from the Rautavaara Project in Finland during the March Q 2010 with results expected in the June Q.
Finland Exploration
Western Areas has an agreement with Magnus Minerals to earn 75% in six exploration projects in the Kainuu Schist Belt and three exploration projects in the adjacent Outokumpu - Savonranta Belt in Finland. Western Areas has already earned 65% interest in the Kainuu Schist Belt and 75% interest in the OUtokumpu - Savonranta Belt (subject to meeting certain conditions). The JV partners consider that the two belts may represent a major metal province with potential to host multiple nickel/coper/zinc/cobalt deposits.
Production in the Kainuu Schist Belt is dominated by the large Talvivaara open pit mine which is successfully using a bacterial leaching technology to extract nickel, zinc, copper and cobalt from low grade sulphide meneralisation in a black schist ore host. Talvivaara Mining Plc has announces total JORC-Compliant Mineral Resources of 1,004 Mt at 0.22% Ni, 0.50% Zn, 0.13% Cu and 0.02% Co (including Measured and Indicated Mineral Resources of 642 Mt).
Talvivaara has announced initial production targets of 30,000 tpa nickel, 60,000 tpa zinc and 10,000 tpa copper from 2010 increasing targets of 50,000 tpa nickel assuming a mining rate of 25M tpa ore.
The six projects in the Kainuu Schist Belt consist of large, coincidnet magnetic/electromagnetic complexes from 10 to 20km long, made up of seperate targets each 1 to 2 km long. 32 targets have been identified and the Finland JV has conducted widely spaced drilling at 5 of these targets since November 2009. The aim of the current program is to locate the prospective sulphidic black schist sequence (similar ore host to the Talvivaara Mine), then identify areas with potentially economic nickel, ziinc, copper and cobalt grades. Mineral resource drilling is planned to commence in the September Q 2010.
The exploration program has been very successful to date with most of the Finland JV drill holes intersecting significant widths of mineralised black schist at the Rautavaara R1, Paltamo P1 and Jormua J1 & J2 targets. The mineralisation intersected in drilling appears to be of a similar type to that mined at Talvivaara and in most cases contains highly anomalous nickel, zinc, copper and cobalt grades. The widest intersection to date is in drill hole DDH 5 at the R1 target (Rautavaara Project). DDH 5 intersected 129m @ 0.22% nicekl, 0.39% zinc and 0.11% copper. Numerous assay results from the current drilling program are awaited.
Historic metal production in the southern part of the province was dominated by the underground mines at Outokumpu which produced a total of approximately 42 Million of tonnes ore at an average grade of 3.1% copper, 1.0% zinc, 0.2% cobalt and 0.1% nickel between 1913 and 1988.
Western Areas has previously announced that it is considering ways to advance and fund the Finland JV without impacting the core business at Forrestania. On 3rd March 2010, Western Areas announced that the Finland JV has appointed UBS and Rothschild Australia to find a major partner for these projects:
- To help fund a three stage program including exploration/resources drilling, feasibility studies/metallurgical test work and potential project development.
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Incoming partner(s) would have an oppurtunity to earn a joint venture interest in one or more of the Finland projects.
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Incoming partner(s) wouldhave an opportunity to negotiate long term (up to 10 years) offtake contracts for one or more nicekl, zinc and copper concentrates.
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