You need the Flash Player version 8.0.0.0 or higher and a JavaScript enabled browser to view this content

Proactive investorsLogo Proactive Investors UK Website

Search field
Get Adobe Flash Player Download
Flash
Player ►

And
Enable
Javascript

1 year chart

digital-look imported chart image

1 day chart

digital-look imported chart image
Additional information
Additional Information
Market: ASX
Sector: General Mining
Epic: WSA
News: Latest news
Web Site: Western Areas NL
Other Articles: 13-10-200913-08-200912-08-2009

RSS - Subscribe to the News Today on Proactive UK ▼

Saturday September 04, 06:00Serving up support at Babcock

Support services have been among the worst performing sectors over the past month as revenue fears from the government’s austerity measures weigh heavily on the sector.

FULL ARTICLE ►

RSS - Subscribe to the News Today on Proactive NA ▼

Friday September 03, 11:40 Goldcorp snatches Andean Resources in $3.6bn deal, trumping Eldorado`s earlier bid

Both companies are vying for Andean`s Cerro Negro gold project, which is an advanced-stage, high-grade vein system, comprising 215 square kilometers. It currently has indicated resources of 2.54 million ounces of gold and 23.56 million ounces of silver, while inferred resources total 523,000 ounces of gold and 3.12 million ounces of silver.

FULL ARTICLE ►

RSS - Subscribe to the News Today on Proactive CN ▼

Wednesday September 01, 10:25Green Dragon Gas reports significant growth as China’s thirst for energy continues

China's thirst for energy resources has continued with an increased focus on domestic supplies of gas, Green Dragon Gas chairman Randeep Grewal said today. In the company's interim results, [...]

FULL ARTICLE ►
Western Areas NL

Western Areas NL

Western Areas NL (WSA) is an international mid-tier nickel sulphide producer. The Company’s core asset is the 100%-owned Forrestania Nickel Project, located 400 kilometers east of Perth, Western Australia. WSA's primary nickel mine at Forrestania, Flying Fox, is a high-grade nickel mine. During the fiscal year ended June 30, 2008, the Company was engaged in the development and mining of the Flying Fox Nickel mine and the exploration for nickel sulphides, platinum group metals and gold. WSA owns 18% of Mustang Minerals Corp., 75% of AOA Kola Mining and 78% of Polar Gold Pty Ltd.
Friday, May 08, 2009

Is Western Areas Australia's next big nickel play?

by Barry Sergeant, Mineweb.net company news image

 

(Mineweb.net) Now that some dust is starting to settle around the crisis that has swept over nickel miners around the world for nearly two years, some specialist investors are asking whether Australia's Western Areas could be "the next" LionOre and/or Jubilee Mines. The latter two stocks were taken over in 2007 by Russia's Norilsk (the world's No 1 nickel miner) and Xstrata, for $5.5bn and AUD2.7bn, respectively. 

Nickel prices famously traded close to $ 25.00/lb during 2007, before a precipitous decline to multi-year lows of less than $ 5.00/lb seen during the past six months, but recovering recently to around $5.90/lb. Nickel, a relative junior among base metals after aluminium, copper and zinc, has notoriously long held the reputation of being the most price-sensitive of all base metals, if not commodities generally. 

Demand for the metal is also notoriously narrow, being hostage to levels of activity in the global stainless steel sector, which has, separately, never shown any hesitancy in searching for nickel substitutes. And then there is the issue of low grade nickel ores out of Indonesia that become economic above certain higher prices, and flood the market. 

With a severe supply-demand imbalance tracing back to 2007, the situation for nickel was aggravated by a general wipe out in most markets, a phenomenon which appears to have peaked around October and November 2008. In the aftermath miners of all kinds have implemented many variations of cash conservation measures, not limited to curtailments, and delays on new projects and exploration, but in some cases including closures. 

Not least among these, it was on January 21 2009 that BHP Billiton, the world's biggest diversified resources company, announced the indefinite suspension of the Ravensthorpe nickel operations in Australia, and the halting of processing of mixed nickel cobalt hydroxide product at Yabulu. As a result, an impairment charge and increased provisions for rehabilitation of $3.4bn were recognised by BHP Billiton for the half-year ended December 2008. 

The survivors have benefited from production cuts. It has been said that Western Areas has a low profile outside Australia, a mining jurisdiction where nickel projects and mines have a somewhat controversial history. The big deal at Western Areas, for now, hinges around costs. In its most recent financial report, Western Areas remarked that "the single most important outcome from the half was the December [2008] quarter reduction in cash costs at Flying Fox to $1.36/lb nickel in concentrate, probably the lowest in Australia". Independent analysts put the all-in cost at Western Areas at around $3.00/lb, giving the stock the characterisation of bombproof. 

Western Areas, as such, dates back to December 1999, and was listed in Australia in July 2000, with a focus on exploration for nickel massive sulphide projects, in turn multiple exploration projects in Australia, where the company is still involved, not least Mt Alexander, Mt Jewell and Koolyanobbing. Western Areas owns 18% of Mustang Minerals Corp, 75% of AOA Kola Mining and 78% of Polar Gold. But Western Areas acquired its now-core asset, Forrestania, in 2002 from Outokumpu and grew there through exploration successes, including discovering completely new deposits and finding significant extensions at previously mined deposits. 

Calendar 2008 marked Western Area's first full year of production at its high grade Flying Fox operation, where output was some 18m pounds of nickel at average cash costs of about $2.11/lb. Western Areas continues to grow, with the target of reaching output of around 75m pounds a year by 2011. 

The Spotted Quoll deposit, also within Forrestania, ranks as one of the highest grade nickel deposits in the world containing, as known to date, 2m tonnes of ore at 6.2% nickel, equating to some 275m pounds of contained nickel. Spotted Quoll is shallow; independent analysts reckon it could be initially brought online as an open pit deposit, with an initial capital requirement of only about $15m, allowing Western Areas to increase production to 75m pounds of nickel without perhaps a single call to shareholders or banks, if any banks are still out there. 

On the public record is the charming information that Western Areas has discovered hundreds of millions of pounds of contained nickel in one of the highest grade deposits in the world, and one where the geology is quite friendly. In the past five years Western Areas has increased its resources by at least 25% each year, with significant potential still remaining. After all, Western Areas has only explored three of the nine prospective lava channels on the 25km long western nickel belt at Forrestania. 

By now some kind of balance appears to have been restored within the global nickel mining subsector. Over the past month, listed nickel miners have almost been the most heavily purchased, second only to zinc miners, among global mining subsectors. If grade is king, Western Areas appears to rank as natural royalty. The longer term picture for Western Areas appears consistent with its remarkable progress: the stock could have been had for around AUD0.20 a share in 2002, and then peaked close to AUD12.00 a share during 2008, before ploughing down to AUD2.46, and recovering to current levels around AUD5.30 a share. 

Selected nickel & related names

 

 

Stock

From

From

Value

 

price

high*

low*

$ bn

Xinjiang Xinxin

CNY 3.60

-41.5%

267.3%

0.353

Braemore

GBP 0.05

-55.3%

380.0%

0.057

Polymet

CAD 1.50

-66.6%

150.0%

0.176

Starfield

CAD 0.20

-85.5%

185.7%

0.057

Toledo Mining

GBP 0.30

-80.8%

280.6%

0.013

Inspiration Mining

CAD 0.53

-76.9%

23.3%

0.033

Overland

AUD 0.08

-88.0%

62.0%

0.005

Macarthur Minerals

CAD 0.76

-69.5%

13.4%

0.012

Fox Resources

AUD 0.15

-87.4%

62.9%

0.022

Hard Creek Nickel

CAD 0.17

-79.8%

112.5%

0.009

Kagara

AUD 1.25

-78.8%

322.0%

0.241

European Nickel

GBP 0.09

-78.3%

350.0%

0.064

Noront Resources

CAD 0.88

-82.9%

102.3%

0.116

Albidon

Not trading

 

 

 

Amur Minerals

GBP 0.03

-81.3%

1685.7%

0.006

FNX Mining

CAD 6.67

-78.5%

233.5%

0.428

Minara Resources

AUD 0.66

-81.1%

249.2%

0.582

Mincor Resources

AUD 1.19

-69.0%

160.4%

0.178

Eramet

EUR 199.79

-70.2%

108.0%

6.953

PT Aneka Tambang**

INR 1,730.00

-54.8%

124.7%

1.592

Mirabela Nickel

AUD 2.51

-68.4%

280.3%

0.535

Norilsk**

$ 9.86

-68.9%

180.9%

18.796

Panoramic Resources

AUD 1.96

-68.1%

178.0%

0.302

Sherritt

CAD 5.35

-67.8%

216.6%

1.340

Western Areas

AUD 5.30

-55.8%

115.4%

0.682

Jien Nickel

CNY 28.16

-32.1%

302.3%

2.101

Talvivaara Mining

GBP 2.32

-48.4%

156.4%

0.782

Independence Group

AUD 3.96

-51.7%

261.6%

0.339

Brilliant Mining

CAD 0.21

-83.5%

192.9%

0.013

Poseidon

AUD 0.25

-83.4%

61.3%

0.030

Highlands Pacific

AUD 0.11

-25.0%

162.5%

0.052

Metals X

AUD 0.13

-72.9%

116.7%

0.117

Liberty Mines

CAD 0.17

-81.7%

560.0%

0.011

Crowflight

CAD 0.24

-70.0%

166.7%

0.060

Pioneer Nickel

AUD 0.03

-76.4%

30.0%

0.003

First Nickel

CAD 0.12

-72.1%

242.9%

0.016

Obtala

GBP 0.28

-33.9%

46.1%

0.078

International Nickel

CAD 0.21

-80.2%

110.0%

0.010

Averages/total

 

-67.0%

217.2%

36.164

Weighted averages

 

-67.7%

166.1%

 

 

 

 

 

 

Diversifieds with nickel

 

 

 

BHP Billiton**

GBP 15.69

-28.8%

114.5%

142.911

Vale**

$ 19.04

-56.9%

116.4%

93.296

Rio Tinto

GBP 30.57

-57.3%

207.2%

66.736

Anglo American

GBP 16.25

-55.9%

79.4%

32.991

Xstrata**

GBP 7.06

-71.9%

144.5%

31.305

* 12-month

 

 

 

 

** Among the biggest nickel miners.

 

 

 

Source: market data; tables compiled by Barry Sergeant

Mineweb is a web-based international mining publication focusing on mining financial and corporate news and comment. 

AddThis Feed Button
Register here to be notified of Proactiveinvestors One2One Forums.

Other Western Areas NL articles


Other Western Areas NL news

More news ►

Investors interested in Western Areas NL recently viewed


No investment advice

The Company is a publisher and is not registered with or authorised by the Financial Services Authority (FSA). You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.