Corporate Presentation May 2014

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  • 1.WesternAreasLtd CorporatePresentation May2014 ThinkNickel, thinkWesternAreas

2. DisclaimerandForwardLookingStatements This presentation is being furnished to you solely for your information and for your use and may not be copied, reproduced or redistributed to any other person in any manner. You agree to keep the contents of this presentation and these materials confidential. The information contained in this presentation does not constitute or form any part of any offer or invitation to purchase any securities and neither the issue of the information nor anything contained herein shall form the basis of or be relied upon in connection with any contract or commitment on the part of any person to proceed with any transactionthe basis of, or be relied upon in connection with, any contract or commitment on the part of any person to proceed with any transaction. The distribution of this presentation in jurisdictions outside Australia may be restricted by law, and persons into whose possession this presentation comes should inform themselves about, and observe, any such restrictions. The information contained in this presentation has been prepared by Western Areas Ltd. No representation or warranty, express or implied, is or will be made in or in relation to, and no responsibility or liability is or will be accepted by Western Areas Ltd, employees or representatives as to the accuracy or completeness of this information or any other written or oral information made available to any interested party or its advisers and any liability therefore is hereby expressly disclaimed. No party has any obligation to notify opinion changes or if it becomes aware of any inaccuracy in or omission from this presentation. All opinions and projections expressed in this presentation are given as of this date and are subject to change without notice. This document contains forwardlooking statements. These statements are based on assumptions and contingencies that are subject to change without notice,This document contains forward looking statements. These statements are based on assumptions and contingencies that are subject to change without notice, and certain risks and uncertainties that could cause the performance or achievements of Western Areas Ltd to differ materially from the information set forth herein. Western Areas Ltd undertakes no obligation to revise these forwardlooking statements to reflect subsequent events or circumstances. Individuals should not place undue reliance on forwardlooking statements and are advised to make their own independent analysis and determination with respect to the forecasted periods, which reflect Western Areas Ltds view only as of the date hereof. Th i f ti ithi thi P P i t t ti il d b W t A t b t th i f ti it l t t i l dThe information within this PowerPoint presentation was compiled by Western Areas management, but the information as it relates to mineral resources and reserves was prepared by Mr. Dan Lougher and Mr. Andre Wulfse. Mr. Lougher and Mr. Wulfse are full time employees of Western Areas Ltd. Mr. Lougher and Mr. Wulfse are members of Australian Institute of Mining and Metallurgy (AusIMM) and have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves(2012 JORC Code). Mr. Lougher and Mr. Wulfse consent to the inclusion in this presentation of the matters based on the information in the form and context in which it appears. The information contained in this presentation in relation to the Flying Fox Mine was prepared and first disclosed under the 2004 Edition of the JORC Code. It has not been updated since to comply with the 2012 JORC Code on the basis that the information has not materially changed since it was last reported. For the Purposes of Clause 3.4(e) in Canadian instrument 43101, the Company warrants that Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. 2 3. Agenda WesternAreashasanenviabletrackrecordof exploring,finding,developingandproducing Introduction O i profitablemines. Operations Financials&BalanceSheet Ni k l i d Nickelindustry Exploration&GrowthOutlook Explore Developp 3 ProduceSales 4. CorporateOverview WSAvsASX200Resources(FY14YTD)1 KeyInformation as at 26 May 2014 Share price 4.58 52 week high/low (A$) 4.60 / 1.94 Shares outstanding (m) 232.3 4,000 5,000 6,000 3.50 4.00 4.50 (000s) A$/share) Market Capitalisation (A$m) 1,066 Cash (A$m)2 175.5 Debt (A$m)2 220.2 0 1,000 2,000 3,000 1 50 2.00 2.50 3.00 Volume Shareprice(A Board&SeniorManagement Undrawn ANZ Facility 125.001.50 Jul 13 Sep 13 Nov 13 Jan 14 Mar 14 WSA Volume WSA ASX 200 Resources (rebased to WSA) Name Position Ian Macliver Independent Non-Executive Chairman Dan Lougher Managing Director & CEO David Southam Executive Director Joseph Belladonna Chief Financial Officer & Company Secretary Julian Hanna Non-Executive Director Richard Yeates Independent, Non-Executive Director Robin Dunbar Independent, Non-Executive Director 4 p , Notes:Marketdataasat[10February2014] 1. ASX200Resources IndexrebasedtoWSASharePrice 2. Cashasat31March2013QuarterlyReportandconvertiblebonddebt 5. InvestmentHighlights Ahighgradeandlowunitcashcostnickelproducer Aprovenexplorer,developerandoperatorledbyanexperiencedmanagementteam AnS&P/ASX200indexmember Market cap of approximately A$1 05b at current prices MarketcapofapproximatelyA$1.05batcurrentprices Profitable,evenatthepreviouslylownickelprice Balance Sheet, flexibility and strengthBalanceSheet,flexibilityandstrength Aprovendividendpayer Strategicowner ofsoughtafternickelinconcentratefromtradersandsmelteroperators. OfftaketenderduetocommencesecondhalfofCY2014 Employerofapproximately500 staff,eitherdirectlyorthroughcontractors 15 consecutive quarterly reports with no downside operational surprises 15consecutive quarterlyreportswithnodownsideoperationalsurprises Committedtostableorganicgrowthfromthecurrentsolidplatform Improvingnickelpricesentimentandoutlook 5 p g p 6. StrongAssetBase Production Exploration Assets Fl i F &Growth F t i & WAFlyingFox 1st nickelmine 15ktnickelperannum Forrestania&WA Regional Nickel TrakaJV Disciplined A i i i SpottedQuoll 2nd nickel mine CanadianAssets Nickel/Copper Acquisition Potential (Nickel& Base Metals) 2 nickelmine 10ktto15ktnickelper annum Nickel/Copper PGEs BaseMetals)BaseMetals) CosmicBoy Nickelconcentrator treatsorefromboth Finland VMS OutokumpuCu 6 mines 7. Location WSAconcentrateto BHPBilliton WSAoperations WSA concentrate exports 7 8. Western AreasareSafeAreas ContinuousSafetyImprovement LTIFR 1 91 4.0 LTIFR LTIFR1.91 FlyingFox>295daysLTIfree SpottedQuoll>1,110days LTIfree 2.0 3.0 1.91 Exploration>2,007daysLTIfree CosmicBoyConcentrator>312daysLTIfree MTIFR13.39 0 0 1.0 Contractorsandemployeesfullyintegrated intoasitewidecommitment Environment & Social 0.0 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr 2013 2014 Environment&Social Noenvironmentalbreaches StronglocalcommitmentsfromtheHyden RespiteCentre,PerthZo(NorthernQuoll) andStarlightChildrensFoundationWA 8 9. Operations 9 10. MarchQuarterly Outperformance Comments 1 Full Year Guidance will be met YTD TonnesMined JunQtr SepQtr DecQtr MarQtr Total FlyingFox 2012/2013 2013/2014 1. FullYearGuidancewillbemet andpotentiallybeaten 2. Continuedlowunitcashcosts 3. Positivereservereconciliationon OreTonnesMined Tns 73,716 86,642 83,095 79,328 249,065 Grade Ni% 4.7% 4.8% 4.6% 4.1% 4.5% NiTonnesMined Tns 3,447 4,200 3,791 3,243 11,234 SpottedQuollUnderground OreTonnesMined Tns 53,465 77,097 74,720 71,614 223,431 Grade Ni% 4.8% 5.3% 4.8% 4.8% 5.0% grade/tonnespluscostreduction programdeliveringresults. 4. Productionofnickelinoreand concentrateremainaheadofthe NiTonnesMined Tns 2,584 4,090 3,616 3,466 11,172 TotalOreTonnesMined Tns 127,181 163,739 157,815 150,942 472,496 Grade Ni% 4.7% 5.1% 4.7% 4.4% 4.7% TotalNiTonnesMined Tns 6,031 8,290 7,407 6,709 22,406 YTD guidancerunrate. 5. Cashatbankincreasedto A$175mwithA$13mfree cashflowforthehalfwhen TonnesMilledandSold JunQtr SepQtr DecQtr MarQtr Total OreProcessed Tns 146,256 150,475 148,901 147,544 446,920 Grade % 5.1% 4.9% 4.9% 4.8% 4.9% Ave.Recovery % 89% 90% 88% 90% 89% NiTonnesinConcentrate Tns 6,634 6,593 6,427 6,344 19,364 excludingthecapitalraise,debt repaymentandinterestcosts. 6. 15quartersinarowofontarget orbetteroperational NiTonnesinConcentrateSold Tns 7,222 6,554 6,409 6,418 19,381 TotalNickelSold Tns 7,222 6,554 6,409 6,418 19,381 ContainedNiinStockpiles Tns 5,700 6,661 6,889 6,366 MAR FinancialStatistics JunQtr SepQtr DecQtr MarQtr YTD p performance. GroupProductionCost/lb MiningCost(*) A$/lb 1.87 1.65 1.88 1.84 1.79 Haulage A$/lb 0.05 0.06 0.06 0.06 0.06 Milling A$/lb 0.38 0.40 0.44 0.43 0.43 Admin A$/lb 0.18 0.19 0.19 0.21 0.20 ByProductCredits A$/lb (0.02) (0.02) (0.03) (0.02) (0.02) 10 CashCostNiinCon(***) A$/lb 2.46 2.28 2.54 2.52 2.46 CashCostNiinCon/lb(***) US$/lb(**) 2.44 2.09 2.36 2.26 2.24 ExchangeRateUS$/A$ 0.99 0.92 0.93 0.90 0.91 11. FlyingFoxMine MineralResourceandOreReserve HighGrade(excludingdisseminatedsulphide resource)MineralResource:1.60Mt@5.6%Ni containing90,365NiTonnes OreReserve:1.50Mt@4.0%Nicontaining 59,570NiTonnes Undergrounddrillingprogramtoextend Mineral Resource is ongoingMineralResourceisongoing Over700mstrikelengthinT5 P d iProduction FY2013 348,448t@4.9%Nifor17Ktnickel Lowcashcostoperation EstimatedLifeofMine 56Years,extensional drillinginprogress 11 12. SpottedQuollMine MineralResourceandOreReserves MineralResource:3.25mt@5.5%Ni containing 178 985 Ni tonnescontaining178,985Nitonnes OreReserve:2.89mt@4.3%containing 122,800Nitonnes Remains open at depth and to