Western Areas : Significant Resource Upgrade at Odysseus

16 June 2017 ASX: WSA

News Release

SIGNIFICANT INCREASE IN ODYSSEUS HIGH GRADE NICKEL RESOURCES AND UPGRADED DISSEMINATED INDICATED MINERAL RESOURCES

Western Areas Ltd (ASX: WSA, "Western Areas" or the "Company") is pleased to announce that the Company has trebled the defined high grade Massive Sulphide Mineral Resource at the Cosmos Odysseus Project ("Project" or "Odysseus"). A significant percentage of the Disseminated Inferred Mineral Resource at the Project has also been upgraded to the Indicated category providing increased confidence and flexibility in the Definitive Feasibility Study that is currently underway (Table 1).

Key highlights from the Mineral Resource update include:

• A 311% increase in the Total Massive Sulphide Resource to 22,838 nickel tonnes grading 8.4% Ni which now includes 8,836 nickel tonnes grading 6.1% Ni in the Indicated category;
• A 78% increase in the Odysseus North disseminated Indicated Resource to 81,156 nickel tonnes grading 2.6% Ni (previously 45,519 nickel tonnes grading 2.8% Ni);
• An overall increase in the Indicated to Inferred disseminated resource ratio from 77% to 94%, which includes a ratio increase of 56% to 93% in Odysseus North disseminated;
• The increase in Indicated Resource provides greater flexibility to the proposed mine design and schedule of the Definitive Feasibility Study; and
• The Total Odysseus Mineral Resource Estimate now stands at 7.9Mt @ 2.5% Ni for 199,174 nickel tonnes at a cut-off of 1.5% Ni.

Odysseus Mineral Resource after the upgrade

Tonnes	Ni	NiT
Odysseus South Disseminated	XST	3,884,857	2.17	84,301	Indicated Resource
	WSA	4,016,949	2.11	84,767
	XST	169,165	2.13	3,603	Inferred Resource
	WSA	219,641	1.96	4,302

Tonnes	Ni	NiT
Odysseus North Disseminated	XST	1,631,495	2.79	45,519	Indicated Resource
	WSA	3,128,943	2.59	81,156
	XST	1,586,175	2.21	35,054	Inferred Resource
	WSA	225,248	2.71	6,111

Tonnes	Ni	NiT
WSA		7,145,892	2.32	165,923	Indicated Resource
Odysseus Total Disseminated	WSA	444,889	2.34	10,413	Inferred Resource

Tonnes	Ni	NiT
Odysseus North Massive	XST	-	Indicated Resource
	WSA	145,830		6.06	8,836
	XST	48,043	11.58	5,563	Inferred Resource
	WSA	124,900	11.21	14,002

Table: 1 Comparison of previous Xstrata (XST) and current WSA Resource

Western Areas Managing Director, Dan Lougher, said that it was pleasing to tick off another milestone for the Odysseus Project at Cosmos.

"The increase in the confidence level of the resources at Odysseus was one of the critical path items for the timely completion of the project DFS, and will support the definition of an Ore Reserve for the project. The amount of massive sulphides included from limited drilling and the increase in total nickel tonnes was above our expectation when we completed due diligence on this acquisition," Mr Lougher said.

"We are also pleased to advise that Piran Mining has been appointed as Project Manager for the DFS and has already commenced work. Piran Mining was Project Manager for the Spotted Quoll feasibility study which has turned into one of the great success stories for underground mining in Western Australia. Piran is well versed in the quality controls and high technical expectations driven by the Western Areas team, which was an important factor in making this appointment," Mr Lougher said.

-ENDS-

For further details, please contact:

Dan Lougher David Southam

Managing Director - Western Areas Ltd Executive Director - Western Areas Ltd Telephone [phone] Telephone [phone]

Email: [e-mail] Email: [e-mail]

Shane Murphy FTI Consulting

Telephone [phone]

Email: [e-mail] Or visit: www.westernareas.com.au

CP STATEMENT:

The information within this report as it relates to Mineral Resources is based on information compiled by Mr Andre Wulfse. Mr Wulfse is a Fellow of AusIMM and a full time employee of Western Areas. Mr Wulfse has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.' Mr Wulfse consents to the inclusion in the report of the matters based on the information in the context in which it appears.

FORWARD LOOKING STATEMENT:

This release contains certain forward-looking statements including nickel production targets. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "continue", and "guidance", or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production and expected costs.

Examples of forward-looking statements used in this release include: "the Disseminated Inferred Mineral Resource at the Project has also been upgraded to the Indicated category providing increased confidence and flexibility in the Definitive Feasibility Study".

These forward-looking statements are subject to a variety of risks and uncertainties beyond the Company's ability to control or predict which could cause actual events or results to differ materially from those anticipated in such forward-looking statements.

This announcement does not include reference to all available information on the Company or the Cosmos Nickel Complex and should not be used in isolation as a basis to invest in Western Areas. Any potential investors should refer to Western Area's other public releases and statutory reports and consult their professional advisers before considering investing in the Company.

For Purposes of Clause 3.4 (e) in Canadian instrument 43-101, the Company warrants that Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability.

JORC 2012 TABLE 1 - Odysseus Mineral Resource Estimate Section 1: Sampling Techniques and Data

Criteria	JORC Code explanation	Commentary
Sampling  Nature and quality of sampling (e.g. cut techniques channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.		Targets were sampled using Diamond drilling, and holes were typically drilled perpendicular to the strike (north-south) of the stratigraphy, at angles ranging between 55o and 80o. Drill holes were located initially with hand held GPS and later surveyed by differential GPS. Each sample was submitted to ALS laboratories at Malaga, Perth and was weighed to determine density by the weight in air, weight in water method. All sampling was conducted under WSA QAQC protocols which are in accordance with industry best practice. Diamond drill core (NQ2) is ¼ core sampled on geological intervals (0.2m to 1.5m) to achieve sample weights under 2kgs. Samples were crushed, dried and pulverised (total prep) to produce a sub sample for analysis by 4 acid digest with an ICP/AES and FA/ICP (Au, Pt, Pd) finish.
Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.	All samples were prepared and assayed by independent commercial laboratories whose instruments are regularly calibrated Geophysical survey QC parameters were reviewed by an independent supervising geophysicists from Newexco Services Pty Ltd
Aspects of the determination of mineralisation that are Material to the Public Report. In cases where 'industry standard' work has been done this would be relatively simple (e.g. 'reverse circulation drilling was used to obtain 1m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.	Diamond core is typically marked at 1m intervals Sample intervals are marked up by geologists based on geology Sampled mineralisation intervals are sent to a commercial laboratory for crushing and grinding before assaying.
Drilling techniques	Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).	Diamond drilling comprises HQ and NQ2 sized core. Core is oriented using the Boart Longyear TruCore orientation system
Drill sample recovery	Method of recording and assessing core and chip sample recoveries and results assessed. Measures taken to maximise sample recovery and ensure representative nature of the samples. Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.	Diamond core recoveries have been logged and recorded in the database Diamond core is logged and recorded in the database. Overall recoveries are >95% and there were no core loss issues or significant sample recovery problems. Core loss is noted where it occurs Diamond core was reconstructed into continuous runs on an angle iron cradle for orientation marking. Depths are checked against the depth given on the core blocks and rod counts are routinely carried out by the drillers.
Logging  Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.		All geological logging was carried out to a high standard using well established nickel host rock and wall rock geology codes in using spreadsheets with appropriate spreadsheet templates as a guide.
Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.	Final logging is quantitative and core photography is done to a high standard in both dry and wet form.