Western Areas NL Announces Drill Hole Intersection

The Board of Western Areas is pleased to announce that drill hole FFD 183 has intersected 3.9m of high grade massive and stringer nickel sulphides in a previously untested area of the Flying Fox mine. The estimated average grade of the intersection is 5.6% nickel based on initial results using a portable XRF analyser. Final assays are required to confirm nickel grades which will be announced when they are available.

The significance of the result is that FFD 183 appears to have intersected a new zone of high grade mineralisation 50m south of the exiting T Zero (South) mineral resource. A drilling program is underway to test the extent of the new discovery as soon as possible.

Drilling is also testing the area between T Zero (South) and the underlying T1 deposit. Recent interpretation of previous drilling shows potential for T1 to extend upwards towards T Zero, both to the north and to the south of the dolerite dyke. The areas currently being drilled have the potential to make a significant contribution to early production from Flying Fox at minimal additional capital cost.

The T Zero deposits now contain a total of approximately 1,800 tonnes of nickel along a 250m strike length. High grade ore is currently being mined from two ore drives at T Zero (North). In addition, the main decline has advanced behind T Zero (South) and it is expected that ore will be accessed from this deposit by the end of February. The decline and ore drives remain dry and progress on the mine and related infrastructure is excellent. The past two months have seen in excess of 430m of total development.

The second 1,000 tonne shipment of high grade ore from T Zero (North) has been treated by LionOre and a third is expected to be delivered by the end of February. Production at Flying Fox is expected to increase rapidly in 2007 as new ore surfaces are developed in the mine.

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. Note: The nickel assay estimates for drill hole FFD 183 quoted in this release are indicative only and have been estimated using a NITON XLt 592 portable XRF analyzer which is not JORC compliant.

The information within this report as it relates to exploration results, Mineral Resources and Ore Reserves 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 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.

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. -- www.tsx.com