WESTERN AREAS July 2008

Transcription

1 WESTERN AREAS July 2008 Target: 35,000 tpa nickel by 2011 Developing high grade, low cost, long life nickel mines

2 WESTERN AREAS Nickel Producer and Explorer Goal to be Australia s 2 nd largest nickel producer by 2011 Highest grade ore reserves lowest cash costs in Australia Strong production growth target 35,000tpa nickel from 4 mines Unrivalled exploration upside for new high grade nickel discoveries All timelines being met for ore production and mine development Dual listed with projects in two best nickel producing countries 2 Strong cash position and capital structure - $145M cash.

3 Western Areas - Corporate ASX & TSX LISTED: WSA - ISSUED CAPITAL: MARKET CAPITAL: ASX 200 INDEX 167M shares, 6M options A$8.50 FINANCIAL CASH (30 June 08): CONVERTIBLE BOND: FINANCE FACILITIES: EXPLORATION EXPENDITURE: A$145M, A$14M receivables A$225M (A$212M), 8% yield A$82M drawn A$52M A$2.5M / month 3 Terry Streeter Julian Hanna Craig Oliver Daniel Lougher David Cooper Robin Dunbar BOARD Chairman and 20% shareholder Managing Director and CEO Finance Director / Company Secretary Operations Director Independent Director Independent Director, Toronto based

4 Nickel as an investment commodity 4 WSA - FLYING FOX WSA - SPOTTED QUOLL Xstrata - PROSPERO Mincor - OTTER JUAN Independence - LONG SHAFT Xstrata - TAPINOS Mincor - MARINERS BHP - CLIFFS Vale - VOISEYS BAY Xstrata - RAGLAN Panoramic - LANFRANCH Mincor - MIITEL Vale - THOMSON BHP - PERSERVERANCE Norilsk - NORILSK WSA - DIGGERS SOUTH Panoramic - SAVANNAH Norilsk - BLACK SWAN Jinchuan - JINCHUAN Albidon - MUNALI Vale - SUDBURY Zinifex - AVEBURY Norilsk - MAGGIE HAYS Norilsk - KOLA Mustang - MASKWA Lundin - AGUABLANCA Mirabela - SANTA RITA BHP - Mt KEITH Norilsk - NKOMATI Norilsk - TATI Talvivaara - TALVIVAARA Nickel grade % What is a tonne of ore worth? 5% and 3% Nickel per tonne are among the highest value commodities Global nickel mines - Ore Reserve Grade % Ni Western Areas has the two highest grade deposits WSA Ore Reserves Australian Nickel Deposits Global Nickel Deposits NICKEL 5% $9.5 /lb Ni NICKEL 3% $9.5 /lb Ni MANGANESE 48% $17 / dmtu COPPER 3% $4.0 /lb Cu COAL (QLD) $240 /tonne LEAD 10% $0.9 /lb Pb ZINC 10% $0.9 /lb Zn GOLD 6.0 g/t $950/ oz URANIUM 1000ppm $64 lb/ U IRON ORE 63% $1.7/ dmtu US $ per Tonne 0 Note: Spotted Quoll is reported as an in-pit mining inventory (Scoping Study)

5 Mineral Resources and 6 Year Production Targets 325, ,000 Forrestania Mineral Resources FORRESTANIA MINERAL RESOURCES 287,800 tonnes nickel in mineral resources. Target 300,000 tonnes nickel by end 2008 Steady growth in mineral resources since Western Areas acquired project is expected to continue Tonnes of Contained Nickel 275, , , , , , , ,000 Nickel Metal Tonnes 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 FORRESTANIA 6 YEAR PRODUCTION TARGET 75,000 50,000 25, Calendar Year Flying Fox New Morning / Daybreak Cosmic Boy Diggers South Spotted Quoll Target 2008 FORRESTANIA PRODUCTION TARGETS Calender Years Target 35,000 tpa nickel in concentrate production from four mines by Flying Fox Diggers South Spotted Quoll Flying Fox (assuming shaft haulage) New Morning Cosmic Boy Majority of production expected to come from Flying Fox, Spotted Quoll and Diggers South. Additional production from Cosmic Boy and New Morning Note: This graph represents WSA production targets based on an estimate of potential annual production using several assumptions and forward looking statements. Production targets may vary depending on a wide variety of factors including nickel price, future estimation of mineral resources and ore reserves, mining costs, geotechnical issues, environmental permitting and future mine development and production rates. Apart from Flying Fox and Diggers South, these estimates are not yet based on Feasibility Studies and may be varied at any time. Potential or existing investors should not rely on this graph as a basis to invest in Western Areas NL.

6 Forrestania Project - nickel sale contract with Norilsk FORRESTANIA NICKEL CONCENTRATOR Concentrates 5% Nickel ore to 16% nickel concentrate Stage One concentrator under construction, due to be commissioned March Q 09 Western Areas retains right to toll treat ore at Norilsk s Lake Johnston concentrator Flying Fox concentrate being loaded at Esperance 6 NICKEL SMELTER / REFINERY Norilsk refines Flying Fox nickel concentrate to LME grade nickel at Harjavalta in Finland. Nickel offtake agreement with Norilsk for first 75,000t Nickel from Forrestania, excluding production from Diggers South mine.

7 500km long Nickel Province consolidated by WSA Mt Alexander Project BHP Billiton JV High grade nickel/copper/pge (up to 7.5% Ni and 3% Cu) Western Areas is spending ~A$25M pa on exploration. This program is targeting: 1. Ultramafic contacts 2. Major structures 3. Granite intrusions 4. EM anomalies Koolyanobbing Nickel Project (100%) High grade nickel discovery (up to 5.3% Ni) 7 Forrestania Nickel Project (100%) 287,750 t contained nickel in high quality mineral resources

8 25km Western Nickel Belt unrivalled potential for new high grade deposits like Spotted Quoll Western Areas has tested only 3 of the 9 prospective channel zones (red) below the granite - discovering the Flying Fox, Daybreak & Spotted Quoll deposits. High powered surface EM survey has identified new targets 6km and 10km south of Spotted Quoll. Drilling starts end July 2008 to test Dooley s Find, Willy Willy, Boojum North and Arrowhead targets. 8

9 Flying Fox Mine, New Morning & Spotted Quoll (6km) 9 Flying Fox Production: High grade, low cost underground mine. Est: US$2.50/lb cash cost Spotted Quoll Feasibility: High grade, low cost open pit mine. Est: US$1.50/lb cash cost New Morning Pre Feasibility: High grade underground nickel mine. Potential extensions Excellent potential - for new high grade nickel discoveries along 25km western contact

10 Flying Fox longitudinal projection. (1 st mine) Four large, high grade nickel deposits (T1, T4, T5, T6/T7) extending over 1km vertical extent to 1400m depth. Mine decline currently at 600m depth Scoping study for ore haulage shaft T1 in production - target 8,000t Nickel CY 08 18,000 t nickel in high grade (4% Ni) Ore Reserves -400m -600m T4 production early Potential extensions 12,800 t nickel in high grade (4.1% Ni) Mineral Resource -800m T5 production early years ore reserves 10 69,200 t nickel in high grade (6.8% Ni) Mineral Resource 49,700 t nickel in high grade (5.9% Ni) Ore Reserves -1100m T6/T7 resource drilling in progress 3 nickel zones, 5 EM conductors, 9% nickel intersected T7 has potential to be another bonanza T5 deposit -1400m

11 Flying Fox at surface and ore face at 500m depth Looking southeast from Flying Fox waste dump. Drill rigs at T4 and T6 11 Drilling in progress at T7 July 08 6% nickel exposed across 920RL ore drive at T1. Six ore drives are now established in T1.

12 Spotted Quoll proposed initial open pit (2nd mine) FIRST MINERAL RESOURCE 6.3% Ni containing 34,500t Nickel to 200m depth Recent intersections: 10.4% Ni, 11.4% Ni & 9.4% Ni Resource upgrade due Sept Q. OPEN PIT SCOPING STUDY : A$220M - A$380M net cash flow (US$8/lb - US$12/lb Ni) Estimate: US$1.50/lb cash cost 12

13 Diggers South preliminary site works (3rd mine) FIRST MINERAL RESOURCE Indicated Mineral Resource 1.5% Ni containing 44,700t Nickel 13 Negotiations in progress for nickel offtake agreement

14 Cosmic Boy site works for underground (4th mine) PRELIMINARY SITE WORKS Contract awarded to re excavate boxcut to access underground mine in Dec Q 14

15 New Morning pre feasibility study (5th mine) 15 New Morning - similar geology to top of the Flying Fox mine. Drilling required to test for high grade extensions below granite

16 Forrestania major infrastructure expansion underway ACCOMMODATION VILLAGE Currently 350 rooms capacity Upgrading to 500 rooms by end 2008 INFRASTRUCTURE Major roads, airstrip, grid power, village, offices Plant: 10 years tailings storage, bore fields etc 16 STAFF AND CONTRACTORS Experienced highly skilled mining workforce Wide range of contractors now on site Strong site based management team

17 Forrestania Development Timetable (7 Projects) 17 CAPITAL EXPENDITURE The capital expansion over next 18 months will be funded from current cash, existing debt facilities and cash flow Note: This graph represents Western Areas development targets for CY 2008 and is based on a number of assumptions. Development targets and timetables may vary depending on a variety of factors including nickel price, future estimation of mineral resources and ore reserves, mining costs, geotechnical issues, environmental permitting, availability of contractors and future mine development rates. Western Areas may vary these development targets at any time and potential or existing investors should not rely on this graph as a basis to invest in Western Areas NL.

18 WSA - Top 8 Shareholders and 12 month trading 6.5% Ni 6.8% Ni 6.2% Ni 6.2% Ni 7.3% Ni 8.2% Ni Jungle Creek (Terry Streeter) 20% Giovanni Santalucia 13% Northmead (Allan Greenwell) ~6% Credit Suisse (London) ~4% Colonial ~4% JP Morgan ~4% Westpac Custodians ~4% Citicorp Nominees ~4% 7.4% Ni 8.8% Ni 9.2% Ni % Ni

19 Unrivalled potential for new high grade discoveries 19 Three large nickel systems along 50km mineralised contact One operating mine ramping up to full production 2008 Two new mines commence production 2009 Two additional mines start production 2010, 2013 Many high quality targets for drilling Sept/Dec Q s 2008

20 DISCLAIMER AND FORWARD LOOKING STATEMENT This presentation is being furnished to you solely for your information and for your use and may not be copied, reproduced or redistributed to any other person in any manner. You agree to keep the contents of this presentation and these materials confidential. The information contained in this presentation does not constitute or form any part of any offer or invitation to purchase any securities and neither the issue of the information nor anything contained herein shall form the basis of, or be relied upon in connection with, any contract or commitment on the part of any person to proceed with any transaction. You must not take or transmit this presentation or a copy of this presentation into the United States or Japan or distribute it, directly or indirectly, in the United States or Japan or to any US persons. By your acceptance of this document, you acknowledge that you are a not a U.S. person for the purposes of the US Securities Act. Neither this document, in whole or in part, nor any copy thereof may be taken or transmitted to any other person. The distribution of this document to other persons or in other jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the federal securities laws of the United States and the laws of other jurisdictions. The distribution of this presentation in other jurisdictions may be restricted by law, and persons into whose possession this presentation comes should inform themselves about, and observe, any such restrictions. The information contained in this presentation has been prepared by Western Areas NL. No representation or warranty, express or implied, is or will be made in or in relation to, and no responsibility or liability is or will be accepted by Western Areas NL, employees or representatives as to the accuracy or completeness of this information or any other written or oral information made available to any interested party or its advisers and any liability therefore is hereby expressly disclaimed. No party has any obligation to notify opinion changes or if it becomes aware of any inaccuracy in or omission from this presentation. All opinions and projections expressed in this presentation are given as of this date and are subject to change without notice. This document contains forward-looking statements. These statements are subject to certain risks and uncertainties that could cause the performance or achievements of Western Areas NL to differ materially from the information set forth herein, although such information reflects forecasts and projections prepared in good faith based upon methods and data that are believed to be reasonable and accurate as at the dates thereof and although all reasonable care has been taken to ensure that the facts stated herein are accurate and that the forward-looking statements, opinions and expectations contained herein are based on fair and reasonable assumptions. Western Areas NL undertakes no obligation to revise these forward-looking statements to reflect subsequent events or circumstances. Individuals should not place undue reliance on forward-looking statements and are advised to make their own independent analysis and determination with respect to the forecasted periods, which reflect Western Areas NL s view only as of the date hereof. 20 The information within this PowerPoint presentation was compiled by Mr. Julian Hanna and the information as it relates to mineral resources and reserves was prepared by Mr. Dan Lougher and Mr. John Haywood. Mr. Hanna, Mr. Lougher and Mr. Haywood are full time employees of Western Areas. Mr. Hanna, Mr. Lougher and Mr. Haywood are members of AusIMM and have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Hanna, Mr. Lougher and Mr. Haywood consent to the inclusion in this presentation of the matters based on the information in the form and context in which it appears. THIS DOCUMENT IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE U.S.