Western Areas : Quarterly Activities Report

DECEMBER QUARTER 2021 HIGHLIGHTS

Development of the Odysseus mine continued to ramp up during the quarter, following announcement of first ore production early in October 2021.

Development schedule and go forward capital expenditure for the Odysseus project further de-riskedby the execution of two contracts for major construction works.

Following a highly encouraging market response, preferred parties for final discussions regarding Cosmos nickel offtake for the initial two years of Odysseus' production shortlisted.

First pass mining schedule for AM6 Feasibility Study completed in November.

Diamond drilling at Mt Goode commenced, with the exploration campaign proceeding on schedule.

Forrestania mine production of 4,200 nickel tonnes in ore, compared to 3,741 nickel tonnes in the prior quarter, largely driven by higher production and mined grades at Spotted Quoll.

Mill production of 4,025 nickel tonnes in concentrate, compared to 3,804 nickel tonnes in the prior quarter. Unit cash cost of nickel in concentrate decreased to A$4.87 on increased production and mined grades.

Nickel sales of 4,511 nickel tonnes in concentrate at an average realised nickel price of A$12.48/lb for the quarter (Sept Quarter: A$11.90/lb).

Operating cashflow increased by A$3.3m to A$34.4m as a result of the increased nickel price and production. Cash at bank of A$142.6m and no drawn debt.

Western Areas entered into a Scheme Implementation Deed with IGO Limited (ASX: IGO) whereby IGO will acquire 100% of the share capital of Western Areas by way of a scheme of arrangement, subject to shareholder approval and in the absence of a superior proposal.

Under the terms of the Scheme, Western Areas shareholders will receive A$3.36 per Western Areas share in cash, which represents a 35.5% premium to Western Areas' undisturbed share price of A$2.48 per Western Areas share on 18 August 2021 (the day before discussions were announced).

ACTIVITY REPORT For the period ending 31 December 2021

ACTIVITY REPORT

For the period ending 31 December 2021

onlyODYSSEUS DEVELOPMENT RAMPS UP, HIGHER PRODUCTION AT FORRESTANIA

Western Areas ("WSA" or the "Company") (ASX: WSA) is pleased to provide the December Quarterly Activity report.

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Western Areas Managing Director, Mr Dan Lougher, said "amid a proposed corporate transaction, the Company continued to make major strides in the development of the long-life Odysseus project and continued to successfully progress its operational strategy at Forrestania.

"Development at Odysseus has ramped up considerably and we significantly de-risked the future development schedule for the project during the quarter. We also made positive progress in continuing to bolster the high-potential AM6 and Mt Goode deposits, which provide significant upside value potential at Odysseus. In tandem with this, we have entered the final stages of the Cosmos nickel offtake tender process, for the initial two years of Odysseus'

Forproduction, following substantial market interest. It was also very pleasing to see mine production from Forrestania increase by over 12% during the quarter, principally on the back of increased production at Spotted Quoll, enabling us to capitalise on the robust nickel price environment."

At Odysseus, 1,513m of lateral and decline development was achieved during the quarter. The Company also commissioned the first DORA primary fan (850kW), which will enable further lateral and decline development. Western Areas awarded the shaft haulage, infrastructure design, construction, and equipping contract, as well as the Cosmos concentrator engineering, procurement and construction contract. These contract awards significantly de-risk the future development and capital cost schedule.

Production from the Forrestania operation for the quarter increased to 4,025 nickel tonnes in concentrate, up from 3,804 nickel tonnes in the prior quarter, underpinned particularly by an improved performance at Spotted Quoll, together with slightly higher mill throughput and recoveries. Nickel concentrate sales to offtake customers comprised 4,511 nickel tonnes at an average realised nickel price of A$12.48/lb, up from A$11.90/lb in the September quarter. The nickel market continues to show signs of tight supply, with LME warehouses reporting sustained drawdown of material for use in the stainless-steel and EV battery metal markets.

WESTERN AREAS LIMITED ASX: WSA

www.westernareas.com.au

ABN 68 091 049 357

Page 1 of 36

ACTIVITY REPORT For the period ending 31 December 2021

PRODUCTION OVERVIEW

only		Item			Unit			FY 21			FY 22				YTD
					YTD			Sep Qtr			Dec Qtr			Total
		Total Ore Mined			tonnes	522,855		117,009		123,671		240,680
		Mined Grade			Ni %	3.2%		3.2%		3.4%		3.3%
		Total Nickel Mined			tonnes		16,812			3,741		4,200		7,941
use		Ore Processed (Milling/Concentrator)			tonnes	581,058		148,124		151,417		299,541
	Processed Grade			Ni %	3.2%		3.1%		3.1%		3.1%
	Average Processing Recovery		%		87%		84%		86%		85%
	Total Nickel in Concentrate			tonnes	16,180		3,804		4,025		7,829
	Total Nickel Sold			tonnes	15,509		3,962		4,511		8,473
Contained Nickel in Stockpiles			tonnes	2,772		2,079		1,442
personal
nickel production well into the future.					4.20		4.90		4.88		4.89
		Cash Cost Ni in Concentrate (ex MREP)			A$/lb
		Total Cash Cost Ni Conc (inc. MREP)			A$/lb	4.23		4.95		4.87		4.91
		Total Cash Cost Ni Conc (inc. MREP)			US$/lb	3.16		3.63		3.55		3.59
		Exchange Rate			US$/A$	0.75		0.73		0.73		0.73
		Realised Nickel Price (before payability)			A$/lb	10.07		11.90		12.48		12.21

Western Areas is an Australian based nickel sulphide miner, supplying local and international smelter and refinery operators with high grade nickel concentrates. Its main production asset, the 100%-owned Forrestania Nickel Operation, is located 400km east of Perth in Western Australia. Western Areas is Australia's second largest independent sulphide nickel miner, producing approximately 16,000 to 17,000 nickel tonnes in concentrate per annum from its Flying Fox and Spotted Quoll mines - two of the highest grade nickel mines in the world.

The Company's key growth project is the long-life Odysseus mine located at the Cosmos Nickel Operation. With a mine life in excess of ten years and expected low operating cost, the Odysseus mine will underpin the Company's

The Company is an active explorer across its significant tenement holding at Forrestania, Cosmos and Western Gawler in Australia. The Company also holds a 19.9% interest in Panoramic Resources Ltd, the owner of the Savanah Nickel mine in Western Australia, and exploration interests in Canada via a 5.5% holding in Grid Metals Corp (TSXV:GRDM). Additionally, the Company has exposure to the emerging lithium market via an exploration joint venture with Wesfarmers Chemicals Energy and Fertilizers (WES CEF) across Forrestania's northern tenements.

	The Board remains focused on the core business of economic, long life nickel production, new nickel discoveries and
	generating returns to shareholders. It has put in place the cost structure and capabilities to prosper throughout the
Forcycle by adopting prudent capital management and strict cost control. Its latest Company presentation can be found
	athttps://www.westernareas.com.au/investor-centre/presentations.
	The announcement was authorised for release by the MD/CEO and CFO. For further details, please contact:
	Dan Lougher	Joseph Belladonna	Shane Murphy
	Managing Director & CEO	Chief Financial Officer	FTI Consulting
	Western Areas Ltd	Western Areas Ltd	Telephone [phone]
	Telephone [phone]	Telephone [phone]	0420 945 291
	Email: [e-mail]	Email: [e-mail]	Email: [e-mail]
	WESTERN AREAS LIMITED ASX: WSA	www.westernareas.com.au	ABN 68 091 049 357	Page 2 of 36

ACTIVITY REPORT For the period ending 31 December 2021

COVID-19 UPDATE

During the quarter, the Company realised some minor production losses at Cosmos and Forrestania operations as a result of critical skills shortages in both front line operators as well as supervisory staff. Maintenance of underground mobile equipment continues to be a key area impacted by the lack of diesel mechanics and fitters along with long- hole production drillers.

onlyThe focus of the Company now is to apply and enforce rigorous standards across its operations in preparation for the opening of the Western Australia (WA) border to minimise the impact of the virus across the Company's activities. Currently, the Rapid Antigen Tests (RAT) are being purchased for use for front-line testing and virus detection at useairports before embarkation to the operations. It is anticipated that up to 20% of the resources workforce may be

On a positive note, it is pleasing that all contract and Company operational staff have been fully vaccinated and are currently scheduling their booster vaccination. However, our leading mining contractor did suffer minor operator losses as a small number of personnel did not meet mandatory vaccination requirements.

impacted by the community spread of the Omicron variant once community infections become widespread.

While the WA State Government border reopening plan is awaited, as has been the case over the last two years, our policies and procedures are completely aligned with directives from both the state and federal government health departments.

MINE SAFETY AND ENVIRONMENT

personalSAFETY

The Company's Lost Time Injury Frequency Rate (LTIFR) remained at zero and the Total Recordable Injury Frequency Rate (TRIFR) increased slightly from 10.60 to 10.68. The TRIFR includes all recordable injuries that require medical assessment, medical treatment, restricted duties, or result in lost time across the Company.

Forrestania (FNO)

No Lost Time Injuries (LTI) were recorded during the quarter and LTIFR remained at zero and the TRIFR increased from 7.54 to 8.82. Health and safety initiatives during the quarter included personal fitness, blood sugar and blood pressure testing plus the revised Health and Hygiene Management Plan was finalised.

Accredited confined space, gas testing and working at heights training was conducted for mill personnel and four emergency response team (ERT) members were awarded a Certificate III in Mine Emergency Response and Rescue.

FNO were selected as finalists 2021 for the Emergency Preparedness Award from IFAP CGU - SafeWay Awards in recognition of FNO's bushfire mitigation strategies and response to a number of 2020 bush fires.

ERT training included accredited courses in closed circuit breathing apparatus (BG4), HAZMAT and wildfire training, which increased the number of trained personnel to 25.

For
	Underground BG4 training		Working from heights training
	WESTERN AREAS LIMITED ASX: WSA	www.westernareas.com.au	ABN 68 091 049 357	Page 3 of 36

ACTIVITY REPORT For the period ending 31 December 2021

Cosmos (CNO)

No Lost Time Injuries were recorded during the Quarter and the LTIFR remained onlyat 0.00 and the TRIFR increased from 15.57 to 17.09.

CNO undertook a site wide fire risk assessment, plus a clean-up of older bore- field infrastructure. The gym was upgraded and an exercise physiologist started on-site on a nominal weekly basis.

Shared BG4 training was conducted with our nearby mutual aid ERT members.

ENVIRONMENT
Neither site had reportable environmental incidents during the quarter and the
use
environmental team completed all required compliance monitoring and reporting.
Forrestania (FNO)	ERT Training
	The environmental team completed and submitted DMIRS approval
	applications for new sand-pits to assist in blending paste fill
	feedstock.
personalFor	Rehabilitation surveys of existing plots for two-yearly trending data
were completed to support future rehabilitation method statements.

Planning for the 2022 annual rehabilitation programme commenced and the Steedman Gum Declared Rare Flora annual report was completed indicating no operational impact.

Eucalyptus Steedmanii recovery after bushfire

Cosmos (CNO)

Works approval and mining proposals for the process plant upgrade were approved by the Department of Water and Environment Regulation (DWER) and DMIRS, and a works approval was submitted to DWER for the paste plant.

A revised Cosmos groundwater licence operating strategy was submitted and approved by DWER.

Red capped Robin

Bungarra vs snake

WESTERN AREAS LIMITED ASX: WSA

www.westernareas.com.au

ABN 68 091 049 357

Page 4 of 36

ACTIVITY REPORT For the period ending 31 December 2021

COSMOS OPERATIONS

Odysseus Offtake

onlyThe Company continued the offtake tender process for the first two years of nickel concentrate production from the Odysseus mine and has now shortlisted preferred parties for final discussions, prior to awarding the offtake contract.

Odysseus Mine Development

Total lateral development of 1,513m included 155m in the Odysseus declines, 1,323m of capital other development and 27m of low-grade ore development (from designed waste accesses). Level accesses were established in the 21, 23, and 26 levels and the Level 13 return airway development was connected between the north and south declines.

First nickel ore was intersected in the Odysseus North ore body during the quarter. While ore mining remains secondary to the critical path underground infrastructure development, such as decline and underground shaft tunnels,

usethe intersection of ore marked a key milestone in the overall project development. personalFor

WESTERN AREAS LIMITED ASX: WSA

www.westernareas.com.au

ABN 68 091 049 357

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