Nickel miner Western Areas NL says it is on track to start up two new mines near its Flying Fox mine in Western Australia next year.

Managing director Julian Hanna told the company’s annual general meeting in Perth on Friday that these developments, the Spotted Quoll and Diggers South mines, between Kalgoorlie and Esperance, would be underpinned by a recovered nickel price.
Flying Fox was 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 by 2011, for a targeted production of 35,000 tonnes per annum of nickel.

Hanna said the nickel price, which was now about $US8.50 per pound (lb), would return to its usual level of between $US10 and $US15/lb soon due to its role in the production of stainless steel, which remained in high demand.
“We don’t believe that it will remain below $US10 per pound for too long,” Hanna said.
“At $US8 per pound it is starting to knock out some of the producers around the globe … but about $US15 per pound, it starts to be substituted in stainless steel with chromium, manganese and that sort of thing.”
The Company is currently reviewing data extending 10 km south of Spotted Quoll where a large part of the prospective contact is covered by flat lying granite intrusions similar to those overlying Spotted Quoll, Flying Fox and underlying New Morning. A high powered surface Fluxgate EM survey (the same technology that was used by Newexco to discover the Spotted Quoll deposit) has been carried out over the southern part of the Western Nickel Belt in the June Quarter 2008.
Western Areas is looking at a number of initiatives to increase the rate of exploration along the Western Nickel Belt. These include securing more surface diamond drill rigs (the Company currently has seven drill rigs on long term contracts), employing additional exploration geologists from overseas and doubling the capacity of the Cosmic Boy core yard to process and store the drill core and data from the project.
Western Areas aims to be the second largest producer of nickel in Australia, behind BHP Billiton Ltd, by 2011, producing 35,000 tonnes of nickel per annum from five mines.
The company reported a loss for 2007/08 of $54.9 million.