Western Areas Announces Excellent Production and Drilling Results at Flying Fox Mine

PERTH, AUSTRALIA--(Marketwire - Oct. 27, 2008) - THIS NEWS RELEASE IS The Board of Western Areas (TSX: WSA.TO)(ASX: WSA.AX) is pleased to announce that ore production, mine development and resource extension drilling activities at the Flying Fox mine are meeting all targets.

1. Mining of the large 945/970 stope block in the T1 ore body commenced in early October. In the past week the mine has produced an average of 1130 tonnes of ore per day at an estimated average mine grade of 5.1% nickel for an average of 58 tonnes nickel per day. This level of production from T1 is expected to continue until mid 2009 when it will overlap production from T4.

2. T1 production is expected to meet the target cash cost of around US$2.50/lb payable nickel which should make it one of the lowest cost nickel mines in Australia. Flying Fox is expected to continue to operate profitably even at current low nickel prices.

3. Mine development is proceeding to plan. All major capital development at T1 is complete and the mine decline is already only 50m from the large T4 deposit. Level development at T4 is scheduled to commence in February 2009 and a fresh air intake ventilation raise bore from T4 to surface is planned for mid 2009.

4. Drilling at Flying Fox is continuing to provide excellent results. The first drill hole to test a large area between the T4 and T5 deposits, FFD 196 W1/W1 intersected 4.3m of massive and stringer sulphides. In addition a recent drill hole to test T6, FFD 195W2/W1 intersected 2.8m of matrix and stringer sulphides. Both drill holes indicate potential for significant extensions to mineral resources and ore reserves in these areas.

Discussion

Despite current difficult market conditions, the Board of Western Areas wishes to remind shareholders that the Company owns two of the highest grade nickel deposits in the world and has unrivalled potential for new discoveries of similar type deposits.

The first mine, Flying Fox, is now a well established high grade, low cost nickel producer. Production is on track to reach the first year target of 8,000 tonnes nickel per annum by 31 December 2008, ramping up to a target 14,000 tonnes nickel per annum by 2011. Potential exists to increase production up to 17,000 - 20,000 tonnes nickel per annum and a number of initiatives to achieve this revised target are already being introduced into the mine.

The second nickel mine, Spotted Quoll, is expected to commence production in September Q 2009, initially as an open pit. Scoping studies for the open pit indicate it could produce nickel at around US$1.50/lb nickel which should make it one of the lowest cost nickel mines in Australia. Potential for an underground mine producing 10,000 - 12,000 tonnes per annum nickel is supported by the current mineral resource of greater than 1.0 million tonnes at an average grade of 7.3% nickel containing 75,140 tonnes nickel. The mineral resource is open at depth and along strike and is characterized by outstanding continuity of high nickel grades and widths.

Corporate

The Company has been buying back its convertible bonds and is now considering buying back shares in Western Areas. Western Areas has approximately A$100 million in cash plus undrawn debt facilities of approximately A$30 million as at 30 September 2008.

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 described in this release 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.

COMPETENT PERSONS STATEMENT:

The information within this report as it relates to mineral resources and mine development activities is based on information compiled by Mr Dan Lougher and Mr Julian Hanna of Western Areas NL. Mr Lougher and Mr Hanna are members of AusIMM and are full time employees of the Company. Mr Lougher and Mr Hanna 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 Lougher and Mr Hanna 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. These include: "This level of production from T1 is expected to continue until mid 2009 when it will overlap production from T4 which is scheduled to commence in July 2009", and "T1 production is expected to meet the target cash cost of around US$2.50/lb payable nickel", and "Flying Fox is expected to continue to operate profitably even at current low nickel prices", and "has unrivalled potential for new discoveries of similar type deposits", and "Potential exists to increase production up to 17,000 - 20,000 tonnes nickel per annum", and "Spotted Quoll, is expected to commence production in late 2009, initially as an open pit. Scoping studies for the open pit indicate it could produce nickel at around US$1.50/lb nickel which should make it one of the lowest cost nickel mines in Australia. Potential for an underground mine producing 10,000 - 12,000 tonnes per annum nickel is supported by the current mineral resource". 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 the Flying Fox deposit or the Spotted Quoll deposit 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.

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.

Contacts

Julian Hanna
Western Areas NL
Managing Director
+61 8 9334 7777
Email: jhanna@westernareas.com.au

Craig Oliver
Western Areas NL
Finance Director
+61 8 9334 7777
Email: coliver@westernareas.com.au
Website: www.westernareas.com.au

Shane Murphy
FD Third Person
Investor Relations
+61 8 9386 1233 / 0402 945 291
Email: shane.murphy@wa.fdthirdperson.com.au