Western Areas Option to Acquire BioHeap Leaching Technology

PERTH, AUSTRALIA--(Marketwire - Aug. 12, 2009) - THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE U.S. The Board of Western Areas WSAWSA is pleased to announce that the Company has executed a Heads of Agreement to acquire the BioHeap sulphide leaching technology from Pacific Ore Ltd. The agreement provides Western Areas with an option period of up to six months to conduct due diligence on the BioHeap process, assess the global patents and licenses and conduct test work on a range of low grade sulphide ores from the Forrestania Nickel Project. Western Areas will pay Pacific Ore Ltd $100,000 per month during the option period and can elect to acquire the asset at any time after three months by committing to pay a 2% net refinery royalty on any future commercial application of the BioHeap technology. Western Areas can buy back the royalty interest from Pacific Ore Ltd at any time in the future on payment of $5 million. The agreement is subject to approval by Pacific Ore Ltd shareholders. BioHeap is a bacterial heap leaching technology developed to leach low grade sulphide ores to produce intermediate products which can be sold directly to nickel refineries. A large amount of test work has been carried out on a range of nickel and copper deposits around the world and the technology has been successfully applied at the Radio Hill nickel mine. In addition to high grade ores planned to be mined at Forrestania and treated through the Cosmic Boy nickel concentrator, there are approximately 128,600 tonnes of nickel in low grade mineral resources (Table 1). These are located above Flying Fox, Lounge Lizard, Diggers South, and New Morning deposits and at Purple Haze and Beautiful Sunday. There are also wide zones up to 1% nickel at shallow depth at Liquid Acrobat prospect. Discussion Western Areas Managing Director, Mr Julian Hanna said, "BioHeap offers potential to unlock significant value from the large volume of lower grade mineralisation already outlined adjacent to our existing and planned mines at Forrestania, at relatively low cost. BioHeap also provides an opportunity to increase production above currently announced targets of between 20,000 tonnes nickel in CY 2010 and 35,000 tonnes nickel in CY 2012. These targets are based only on ore which is planned to be treated through the Cosmic Boy nickel concentrator." "If we proceed with the acquisition, we will be bringing to the Company a valuable asset which has been developed over many years to the stage of potential commercial production," Mr Hanna added. "The intention is to use the existing, highly skilled BioHeap staff to conduct the test work so this does not detract in any way from our current operations at Forrestania." Table 1: Low grade Mineral Resources at Forrestania /T/ ---------------------------------------------------------------------------- Deposit Resource Tonnes Grade Contained Comment Category (Ni %) Nickel (t) ---------------------------------------------------------------------------- Flying Fox Indicated 197,200 0.9 1,590 ---------------------------------------------------------------------------- Inferred 357,800 1.0 3,460 ---------------------------------------------------------------------------- Lounge Lizard Indicated 4,497,000 0.8 35,000 Source: Kagara Ltd ---------------------------------------------------------------------------- Inferred 1,904,000 0.71 13,600 Source: Kagara Ltd ---------------------------------------------------------------------------- Diggers Indicated 4,800,000 0.7 35,600 Halo only, excludes South Core Zone ---------------------------------------------------------------------------- Digger Rocks Inferred 1,613,300 0.8 12,200 Halo plus Core deposit ---------------------------------------------------------------------------- New Morning Indicated 1,069,800 0.9 9,650 ---------------------------------------------------------------------------- Inferred 659,200 0.9 5,780 ---------------------------------------------------------------------------- Purple Haze Indicated 560,000 0.9 5,040 ---------------------------------------------------------------------------- Beautiful Sunday Indicated 480,000 1.4 6,720 ---------------------------------------------------------------------------- TOTAL 16,138,300 128,640 ---------------------------------------------------------------------------- In addition to the low grade Mineral Resources in Table 1, major sulphide deposits at Forrestania are: 1 Flying Fox (including Lounge Lizard) and Spotted Quoll have total, combined Mineral Resources, announced previously, of approximately: 4.5Mt at an average grade of 5.9% nickel, containing 265,500 tonnes nickel 2 Diggers South (Core Zone only) has an Indicated Mineral Resource, announced previously, of approximately: 3.0Mt at an average grade of 1.5% nickel, containing 44,700 tonnes nickel /T/ QA-QC STATEMENT: The information within this report as it relates to exploration results or mineral resources or ore reserves is based on information compiled by Mr Julian Hanna and Mr John Haywood. Mr Hanna and Mr Haywood are members of AusIMM and are full time employees of the Company. Mr Hanna and Mr Haywood 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 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.' Mr Hanna and Mr Haywood consent to the inclusion in the report of the matters based on the information in the form and context in which it appears. FORWARD LOOKING STATEMENT: This release contains certain forward-looking statements. Examples of forward looking statements used in this release are: 'The agreement is subject to approval by Pacific Ore Ltd shareholders' and, 'BioHeap offers potential to unlock significant value from the large volume of lower grade mineralisation already outlined adjacent to our existing and planned mines at Forrestania, at relatively low cost,' and, ' BioHeap also provides an opportunity to increase production above currently announced targets of between 20,000 tonnes nickel in CY 2010 and 35,000 tonnes nickel in CY 2012.' and, 'we will be bringing to the Company a valuable asset which has been developed over many years to the stage of potential commercial production'. 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 Forrestania Nickel Project or BioHeap and should not be used in isolation as a basis to invest in Western Areas. Any potential investor 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.