Western Areas to explore in SA

Western Areas has signed farm-in deals with tiddlers Gunson Resources and Monax Mining as it hunts for another Nova-style nickel discovery in South Australia.

The farm-in deals will allow Western Areas to secure up to 90 per cent interest in the two companies' tenements in the Western Gawler region of South Australia covering about 2746sqkm west of Ceduna by funding the costs of exploration.

Western Areas believes the geological settings of the area to be similar to those at Sirius Resources' celebrated Nova-Bollinger multi-commodity deposits east of Norseman.

The move forms part of the company's regional exploration strategy to expand its operations beyond its successful Forrestania nickel project east of Perth.

"Ultimately, Western Areas is aiming to increase the company's significant existing resource inventory through additional exploration success, in conjunction with other ongoing growth initiatives," the company said in a statement.

Managing drector Dan Lougher said Western Areas believed the Western Gawler opportunity offered the significant discovery potential the company was looking for.

"Regional exploration sits alongside our Forrestania exploration program and we have been very clear that with our positive cashflow generation that we would look to take first mover style opportunities where the initial investment is relatively low, but the potential rewards are high," he said.

"Our exploration team is ready to immediately begin a work program aimed at identifying high priority drill targets."

Western Areas shares were up 10 cents, or 2.29 per cent, to $4.46 at 8am while Gunson shares were up 0.1 cents, or 6.25 per cent, to 1.7 cents and Monax shares were steady at 1.8 cents.