Shares in nickel miner Western Areascloser lower todaydespite the company announcing encouraging drilling results which could extend the life of its Flying Fox mine east of Perth.

The companysaidit had intersected nickel in a new area of the mine which has had minimal previous drilling.

The intersections included 13.2 metres at 10 per cent nickel, 5.3 metres at 10.2 per cent nickel and 12.4 metres at 8.3 per cent nickel at depths of between 173 metres and 228.9 metres.

"The recent drilling results suggest that Flying Fox has not yet reached its full potential, six years since its discovery," the company said in a statement.

"Flying Fox still remains effectively untested below the T6 fault, where previous drilling intersected 9.3 metres at 5.1 per cent nickel and 7.3 metres at 3.3 per cent nickel, and along strike north of the dolerite dyke."

The company said it would accelerate a range of drilling programs in a bid to extend the Flying Fox and Spotted Quoll deposits.

Western Areas said Flying Fox was producing about 800 tonnes of nickel a month and total production for the financial year to the end of June had already exceeded the target of 10,000 tonnes.

Shares in the nickel miner closed down one cent at $5.19, despite trading as high as $5.34 earlier.

Shares in base metals miner Kagara, which holds the neighbouring Lounge Lizard deposit, were 3.5 cents, or 5.39 per cent, higher to 68.5 cents.

Kagara said one of Western Areas' intersections was four metres inside its Lounge Lizard tenement.

STUART McKINNON