Western Areas on track to reach forecast

Western Areas NL said it is on track to produce more than 14,000 tonnes of nickel next year at low cash costs after posting a positive June quarterly report.

The company said highlights over the quarter was reaching its targeted ore production rate of 20,000t of ore per month, putting it on track to reach its 8000t of nickel production for the 2008 calendar year.

Cash costs over the quarter were kept in line with forecasts at $A2.15 per pound, down from the previous quarter's $4.40/lb.

Nickel prices are currently at around $US9.40/lb or $A9.90/lb.

The June quarter saw 2178t of nickel in concentrate produced, up from the March quarter's 685t.

The company's positive June quarterly follows bad news coming out of the Fox Resources Ltd and Australian Mines Ltd camps due to a falling nickel price which has more than halved in price since reaching around $US51,000/t in May last year.

Fox was forced to wind up mining operations at its Radio Hill mine while Aust Mines has deferred capital declinedevelopment at its Blair nickel mine near Kalgoorlie.