Western Areas up on record production

Shares in Western Areas rose after the nickel miner said it had exceeded its calendar 2009 production target and made a strong start to 2010.

Western Areas shares were up 36 cents, or 9.3 per cent, at $4.23 at 1216 AEDT.

The company said in a statement today it produced 244,367 tonnes at 3.8 per cent nickel containing 9,193 tonnes of nickel at its Flying Fox mine in Western Australia last year.

This compares to its output target of 240,000 tonnes at 3.8 per cent nickel containing more than 9,000 tonnes of nickel.

The average cash cost was higher than hoped, however, at $US2.54 per pound against its target of $US2.50 a pound.

Western Areas said production in January was 22,200 tonnes at 3.9 per cent nickel containing 874 tonnes of nickel, up from its previously announced target of 730 tonnes of nickel per month during the March quarter.

The company said shareholders had queried its mining of lower grades - 3.3 per cent nickel - during the December quarter.

Western Areas said this was due to a period of substantial operating waste and ore development to access the lower T4 and upper T5 ore bodies at Flying Fox.

The company said it was now ramping up production from the T5 ore body.

First ore from its second long-life high-grade mine, Spotted Quoll, is due in April while an underground ore reserve is due in the June quarter.

Capacity is being doubled at its Cosmic Boy processing plant to meet expanded production from Flying Fox and Spotted Quoll.