Western Areas Announces December 2015 Quarterly Activities Report

PERTH, AUSTRALIA--(Marketwired - Jan. 26, 2016) -

THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO THE U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE U.S

Western Areas (WSA or the Company) (ASX:WSA) is pleased to report that production for both the quarter and half year ended 31 December remain in line to full year guidance, with units costs trending to the low end of guidance. The Forrestania operations remained cashflow positive for the quarter. There were no lost time injuries for the quarter and the Company is proud to continue to report a lost time injury frequency rate (LTIFR) of ZERO.

Mine production was 157,481 tonnes of ore at an average grade of 4.4% for 6,917 nickel tonnes. The mine grade reduced from the last quarter in line with the mine schedule and plan, however as an indication of January performance, both mines are grading just shy of 5% nickel at the time of this report. Spotted Quoll ore tonnages were a record for the quarter and half year at 81,318 and 162,020 tonnes respectively. Mill production remains extremely consistent at 6,256 nickel tonnes produced, despite an unplanned outage associated with a regional bushfire interrupting power supply.

Unit cash cost of production of A$2.24/lb (US$1.61/lb) was marginally lower than the last quarter. Half year unit cash costs are A$2.25/lb which is below the lower end of FY16 guidance of A$2.30/lb to A$2.50/lb. In line with past practice, any guidance update will be provided with the half year results.

Exploration and project enhancement activities were ramped up at Cosmos following a thorough review of the extensive drill data base handed over at transaction completion (see ASX announcement on 20 January 2016).

The nickel price continues to range between US$3.75/lb and US$4.00/lb with the recent weakening of the Australian dollar below US$0.70 providing some improvement in Australian dollar terms. The Company continues to work internally and externally on various cost and capital control measures. The significant portion of full year capital expenditure program was completed in the first half, and the previously announced capital expenditure deferrals have been implemented for the second half.