Western Areas Limited (ASX: WSA) – Mine production at its peak!

Western Areas Limited (ASX: WSA) has recently reported a stronger June quarter of cashflow generation for the year with cash at bank increasing by A$15.9m to A$151.6m, after capital expenditure, feasibility study and exploration costs of A$12.5m. The Company’s balance sheet is in a strong position to assist with its organic growth plans, with cash and receivables of A$172.0m, no debt and a substantial equity investment in Kidman Resources Limited.

Being the highest quarter of mine production and all FY18 guidance metrics achieved against the updated figures from March, it was a solid finish to the year. Despite an unplanned Western Power infrastructure outage which paused mill production for nearly 2 days in June, this included nickel in full year concentrate production of 21,060 nickel tons. With outside geo-political factors putting downward pressure on the nickel price post quarter-end, from a recent three year high in June, the nickel market remains volatile from a pricing standpoint.

Held in joint venture by St George Mining Limited (75%) and Western Areas Limited (25%), the Cathedrals, Stricklands and Investigators nickel-copper-cobalt-PGE discoveries are located on E29/638. Until there is a decision to mine, St George is the Manager of the Project, with Western Areas retaining a 25% non-contributing interest in the Project (regarding E29/638 only). Western Areas was trading at a market price of $3.260 on July 23, 2018 (before market close), and has seen a performance change of 50% over the past 12 months.


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