Western Areas Limited (WSA)

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General Information
Company Name: Western Areas Limited
Stock Code: WSA
Website: www.westernareas.com.au
GICS Sub-Industry: Diversified Metals & Mining
Market Cap ($M): 1,021
Equiv. Shares (M): 233

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
$ 4.390 $ 4.270 $ 4.480 $ 4.270 $ 4.390 1,510,260 0%

Current Broker Consensus Recommendation more
Recommendation: Buy (2.2)
Recommendation Date: 30th Sep 2014
Brokers Surveyed: 5

Company Overview

Business Description:
Western Areas Limited (WSA, formerly Western Areas NL) is an Australian-based nickel sulphide explorer and producer. The core asset is the 100% owned Forrestania NickelOperation which comprises two operating mines, producing approx 25,000tpa nickel in ore. WSA also has interest in projects overseas through investments in Mustang Minerals (Canada) and FinnAust Mining (Finland), and 100% interest in Bioheap Ltd, a patented bacterial leaching technology.

Strategy Analysis:
Western Areas is engaged in the acquisition, exploration and development of nickel sulphide deposits in established mineral provinces in Australia and Canada. The company¬īs main focus is exploring for and developing high grade massive nickel sulphide deposits at the Forrestania Project in Western Australia and exploring for nickel, copper and platinum group element deposits elsewhere. Western Areas reported NPAT down 91% to $2.13m for the half-year ended 31 December 2012. The decrease was primarily due to a fall in commodity prices and a non-cash impairment of $6m. Revenues from ordinary activities were $158.96m, up 7% from the same period last year. Diluted EPS was 1.1 cents compared to 13.4 cents last year. Net operating cash flow was $48.08m compared to $64.41m last year. The interim dividend declared was 2 cents compared with 4 cents last year.

Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2016  F 119.7 51.0 34.6 8.6 25.0 5.7 100.0
2015  F 89.0 37.9 213.0 11.6 20.0 4.6 100.0
2014  A 25.5 12.1 -475.0 26.2 5.0 1.6 100.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F
BHP Billiton (BHP) $108,234 M 0.1223 -0.0456 0.1346 12.6028 13.2053 11.6392 3.81 4.22 4.39
Iluka Resources (ILU) $3,299 M -0.6600 -0.7708 4.1294 25.6929 112.0910 21.8525 1.14 1.78 3.35
Rio Tinto (RIO) $25,867 M 0.5848 -0.3131 0.0914 7.7306 11.2548 10.3127 3.61 4.02 4.30
Sims Metal Management (SGM) $2,290 M 3.0215 1.1765 0.2781 33.2442 15.2744 11.9513 0.89 2.64 3.87
Western Areas (WSA) $1,002 M 4.5758 1.5745 0.3099 26.6543 10.3531 7.9039 1.16 3.25 5.42

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
WSA 0.43 19.4 2.74 0.23 2.88
Market 0.98 15.4 1.26 1.71 1.56
Sector 0.71 10.84 0.71 0.97 4.67

Name Position Start Date
David Southam Finance Director 15 November 2010
Daniel Richard Lougher Managing Director 19 May 2008
Mr Julian Philip Hanna Non-Executive Director 24 December 1999
Mr Craig Leslie Readhead Non-Executive Director 26 June 2014
Mr Robin Dunbar Non-Executive Director 12 December 2005
Mr Timothy Carl Netscher Non-Executive Director 01 August 2014
Mr Richard James Yeates Non-Executive Director 01 October 2009
Mr Ian Alexander Macliver Non-Executive Director,Non-Executive Chairman 01 October 2011

Name Position
Joe Belladonna Company Secretary
G Marshall General Manager, Commercial
C Wilkinson General Manager, Exploration
W Jones General Manager, Operations

Substantial Shareholders
Holding Name
23,937,630 (12.20%) Jungle Creek Gold Mines Pty Ltd
9,897,801 (5.00%) Northmead Holdings Pty Ltd
4,638,548 (2.40%) G Santalucia

Calendar of Events
Date Event
24 August 2015 Report (Prelim)
21 July 2015 Report (Quarterly)
28 April 2015 Report (Quarterly)
17 February 2015 Report (Interim)
27 January 2015 Report (Quarterly)
15 October 2014 Report (Annual)
14 October 2014 Report (Quarterly)
10 October 2014 Div Pay Date
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.


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