C$5 Million Placement with MustangWestern Areas Announces C$5 Million Placement with Mustang
2006-11-14 21:39 (New York)
Minerals to Advance the Maskwa Nickel Deposit towards Open Pit Production
/THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR
FOR DISSEMINATION IN THE U.S./
ASX & TSX: WSA
WEST PERTH, Western Australia, Nov. 14 /CNW/ - The Boards of Directors of
Australian based Western Areas NL (ASX/TSX: WSA) and Mustang Minerals Corp.
("Mustang") (TSXV: MUM) are pleased to announce that they have entered into a
private placement agreement for an investment of up to C$5 million in Mustang.
The agreement is subject to regulatory approvals and completion of due
diligence by Western Areas.
Mustang intends to use the majority of the proceeds from the placement to
complete a feasibility study for an open pit mine at the Maskwa Nickel Deposit
("Maskwa").
Maskwa is the principal asset of Canadian-based Mustang. The 100% owned Maskwa
deposit is located 150km from Winnipeg Manitoba in an area of well established
infrastructure including roads, rail and power. A scoping study is in progress
for an open pit mine. Maskwa contains an Indicated Mineral Resource of 6.0
million tonnes at 0.74% nickel and 0.15% copper containing approximately 44,480
tonnes of contained nickel (98,060,000 pounds of nickel) that is Canadian
National Instrument 43-101 compliant.
Open pit mining at Maskwa was previously carried out by Falconbridge subsidiary
Maskwa Nickel Chrome Mines Limited between 1974 and 1976. Maskwa Nickel mined
332,000 tonnes of ore at an average grade of 1.2% nickel and 0.2% copper. In
addition, 1.54 million tonnes averaging 0.8% nickel and 0.3% copper was mined
at the nearby Dumbarton underground mine, also on the Mustang property.
A large part of the Indicated Mineral Resource at Maskwa (5.2 million tonnes at
0.68% nickel and 0.15% copper) is classified as Open Pit Mineralization by
independent consultants Roscoe Postle Associates Inc. in a report dated
February 18, 2005.
Discussion
Commenting on the agreement, Mr. Julian Hanna, Managing Director of Western
Areas said, "This investment in Mustang offers Western Areas exposure to one of
the most promising nickel projects in Canada.
We have reviewed many nickel opportunities outside Australia and believe that
the Maskwa deposit has strong potential to be the next nickel mine developed in
Canada in an area with well established infrastructure and excellent
exploration upside."
The agreement positions Western Areas to become an internationally diverse
company and complements the company's existing growth strategy through building
interests in advanced nickel projects with potential for significant expansion
of future production.
Mustang President, Mr. Robin Dunbar stated, "Western Areas is one of the
leading mid size nickel companies globally and we welcome them as a strategic
partner as we move towards development of this significant mineral resource."
Mustang also has a resource estimate pending from the M2 Zone at the Mayville
Property located approximately 35km north of Maskwa where it is targeting bulk
tonnage nickel/copper mineralization. A corporate profile of Mustang can be
viewed on Mustang's website.
Summary of Agreement Terms
Under the terms of the private placement agreement, Western Areas will acquire
8,571,429 common shares of Mustang at C$0.35 per share representing $3 million
and an initial 13% interest in the outstanding capital of Mustang. Western
Areas will also acquire 4,570,401 warrants. Each warrant will entitle Western
Areas to acquire one common share of Mustang at an exercise price of C $0.45
per share until November 14, 2007. If all of the warrants are exercised Mustang
will receive additional proceeds of C$2 million and Western Areas will own a
total 19.9% interest in Mustang.
Western Areas will be entitled to nominate a director to the Mustang Board and
a right to maintain its 19.9% interest in Mustang.
Mr. Robin Dunbar, the President and a director of Mustang is also a non
executive director of Western Areas. The private placement agreement was
approved by the independent directors of both companies.
Peter Wood P.Eng (ON) is the Qualified Person for purposes of National
Instrument 43-101 and has reviewed the contents of this release.
About Mustang
Mustang Minerals Corp. (TSX Venture Exchange - "MUM") is a Toronto, Canada
based nickel explorer with market capitalization of approximately CDN $22
million. Mustang's core nickel asset is the Maskwa Nickel Deposit where it is
completing a preliminary economic assessment. Mustang is also completing a
resource calculation on the M2 Zone at the Mayville Property located 35 km
north of Maskwa.
Other property assets of Mustang Minerals include a joint venture for platinum-
palladium with Impala Platinum Holdings Ltd. on its River Valley Project
located east of Sudbury, Ontario, a 100% interest in the East Bull Lake
Platinum-Palladium Nickel-Copper project west of Sudbury, a 100% interest in
the Bannockburn Nickel Project located near Timmins, Ontario and a shareholding
interest of approximately 1.8 million shares in Aquila Resources Inc.
About Western Areas
Western Areas is an Australian based nickel sulphide explorer and producer. The
company has a current market capitalisation of approximately A $570 million.
Western Areas is one of only two nickel companies listed on both the Australian
and Toronto Stock Exchanges. (ASX & TSX code: WSA)
The company's core asset is the 100% owned Forrestania Nickel Project, located
400km east of Perth, Western Australia.
The primary discovery, Flying Fox, is one of the highest grade nickel mines in
the world. The current Indicated Mineral Resource comprises 1.2m tonnes at
6.6% nickel containing approximately 76,090 tonnes nickel plus an Inferred
Mineral Resource which comprises 0.2m tones at 6.6% nickel containing
approximately 12,870 tonnes nickel.
Underground production from the first of a number of high grade deposits at
Flying Fox, T Zero, commenced on 26 October 2006.
A pre-feasibility study is also well advanced to bring a second mine into
production at Diggers South, 40km south of Flying Fox. If positive, Diggers
South has the potential to add approximately 5,000 tonnes of nickel in
concentrate per annum to overlap Flying Fox production which is anticipated
will ramp up to 12,000 tonnes of nickel in concentrate.
Exploration continues to remain a top priority for Western Areas. The recently
completed A$45 million rights issue has provided additional funding for
exploration, with a number of high priority targets to be tested along strike
from Flying Fox, along the eastern nickel belt at Forrestania and at WSA's
other exploration projects.
Near-term upside potential exists through the definition of extensions to the
Flying Fox T Zero and T5 deposits beyond the area drilled to date as well as by
the definition of economic mineralization at T4. Value should also be achieved
by developing the high grade ore reserves at Flying Fox which are expected to
deliver a positive cash cost profile that will ensure healthy long-term
operating margins.
Western Areas plans to evaluate other advanced nickel projects and corporate
acquisitions to drive further shareholder value.
Western Areas QA-QC STATEMENT: Mr Adrian Black from geological consultants
Newexco Services Pty Ltd ("Newexco") is responsible for the verification and
quality assurance of the Company's exploration data and analytical results from
the Forrestania Nickel Project. Surface diamond drill hole collar surveys used
differential GPS, downhole surveys employed a north seeking gyroscopic
instrument; comprehensive density database; high assay confidence with
systematic QA/QC procedures; and validated database. Samples of quarter core
from the drill holes are prepared and analysed by ALS Chemex Ltd laboratory in
Perth for nickel, copper, cobalt and other elements. Core samples are crushed
and pulverised to 90% passing 75 microns then analysed for nickel by ore grade
determination using the ALS OG-62 method. Assays standards are routinely
inserted in the sample stream by Newexco for quality control.
Western Areas COMPETENT PERSONS STATEMENT: The information within this report
was compiled by Mr. Julian Hanna who consents to the inclusion in the report of
the matters based on this information in the form and context in which it
appears. This announcement does not include reference to all available
information on the Company or the Forrestania Nickel Project 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.
FORWARD LOOKING STATEMENT: This release contains certain forward-looking
statements. 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.
<<
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the contents of this press release.
>>
For further information: For more information please visit
www.westernareas.com.au or www.mustangminerals.com or contact: Julian Hanna,
Managing Director - Western Areas, Telephone: +61 8 9486 7855, Email:
jhanna@westernareas.com.au; Robin Dunbar - President or David Black, Mustang
Minerals Corp., Telephone: (416) 955-4773, Email: rd@mustangminerals.com; Ann
Nahajski, Investor Relations - Porter Novelli, Telephone +61 8 9386 1233,
Email: anahajski@wa.porternovelli.com.au; Eric Tang, Investor Relations -
Porter Novelli, Telephone (416) 423-6605, eric.tang@porternovelli.com
CO: Western Areas NL
ST: Washington
NI: MNG PVT
-0- Nov/15/2006 2:39 GMT