Western Areas strikes deal with Reed Resources to explore for high grade nickel at Mt Finnerty

The Board of Western Areas is pleased to announce that the Company has executed a Heads of Agreement withReed Resources Ltd ("Reed") to explore three target areas at Mt Finnerty, 150km NE of Forrestania in Western Australia.

Under the terms of the agreement, Western Areas can earn up to 65% interest in the nickel rights by funding two stages of exploration on the Mt Finnerty tenements which are granted and available for immediate work.

Exploration at Mt Finnerty will focus on three clearly defined nickel sulphide target areas which demonstrate the following:

1. Anomalous geochemical signatures (up to 1% nickel and 400ppm copper)
in previous, shallow RAB drilling of strongly weathered ultramafic
units

2. 4km long soil nickel anomaly ((greater than)250ppm nickel) and a
coincident 2km long copper anomaly ((greater than)170ppm copper)

3. Basal contacts of high MgO ultramafic sequences with potential
channel embayments that are effectively untested by previous drilling

Western Areas' Managing Director, Mr Julian Hanna, said the agreement is
consistent with the Company's strategy to conduct exploration for high grade
nickel sulphide deposits in highly prospective, yet under-explored areas in
the Forrestania region.

"We currently have substantial land holdings in the region," said Mr
Hanna.

"This agreement with Reed enables us to cast an even wider net for
exploration opportunities within this highly mineralized region where Western
Areas has built up considerable knowledge," he said.

"Western Areas is actively exploring the region to supplement our
production from the Flying Fox mine and anticipated production from a second
mine at Diggers South," said Mr Hanna.

Western Areas recently intersected 4% nickel in shallow drilling at its
Koolyanobbing North Project (100%), located approximately 200km north of
Forrestania. Diamond drilling is planned at this project as soon as a drill
rig is available.

Additionally, the Company is earning 60% interest in the Koolyanobbing
East Joint Venture. An IP survey at the Deborah prospect, completed in
February, is expected to generate a number of drilling targets.

Mt Finnerty Agreement

By spending $1.5 million within a 3 year period at Mt Finnerty, Western
Areas can earn a 51% interest in the nickel rights to the tenements and an
additional 14% interest in the second stage by spending a further $1.5 million
on the tenements. Western Areas can withdraw from the agreement at any time
after reaching a minimum expenditure of $200,000 on the tenements.

Western Areas intends to commence an exploration program at Mt Finnerty
as soon as possible.

The information within this report as it relates to exploration results
is based on information compiled by Mr Julian Hanna who is a member of AusIMM
and a full time employee of the Company. Mr Hanna has sufficient experience
which is relevant to the style of mineralization and type of deposit under
consideration and to the activity which he is undertaking to qualify as an a
Competent Person as defined in the 2004 Edition of the 'Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves.' Mr
Hanna consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears.

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.
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.

source news : cnw.ca