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WESTERN AREAS NL

A.C.N. 091 049 357

Suite 3, Level 1, 11 Ventnor Avenue

West Perth, Western Australia, 6005

Ph: (08) 9486 7855 Fax: (08) 9486 7866 Website : www.westernareas.com.au

30 September 2009

The ManagerCompany Announcements OfficeAustralian Stock Exchange Limited20 Bridge StreetSYDNEY, NSW 2000

Dear Sir

Notice of Meeting

Please find attached the Notice of Annual General Meeting to be held at 3.30pm on Friday 23 October2009 in the Gershwins Room, Hyatt Hotel, 99 Adelaide Terrace in Perth.

The past year has been a particularly challenging one for most companies due the global financial crisisand lower commodity prices. Western Areas has however positioned itself well with a number ofsignificant milestones and achievements over the past 12 months. These include:

1. Flying Fox:developed and mining T1\T2 and T4 as planned T5 on track to be intersected

in DecQ09 agreement with Kagara to access Lounge Lizard ramping up production in2010 significant Mineral Resource (2.5Mt @ 5.5% Ni) and Ore Reserve upgrades.

2. Spotted Quoll:Mineral Resource to 640m depth of 2.0Mt @ 6.2% Ni low cost open pitmine approved and commenced feasibility study underway for underground mine - deephigh grade intersections indicate potential for significant extensions.

3. Cosmic Boy Concentrate Plant: completed on time and on budget upgrade to 550ktpaapproved and commenced village and key infrastructure complete.

4. Production Targets: On track to produce 20,000 tonnes nickel from 2010 from two minesand targeting to produce 35,000 tonnes nickel from 2012.

5. Offtake agreement: Negotiated to terminate Norlisk Nickel agreement negotiated twonew improved offtake agreements with BHP Billiton and Jinchuan retain significantuncommitted nickel offtake from 2012.

6. Financial: Strong financial position with most debt due in 2012 with additional fundingsecured from Kagara $20M, BHP Billiton $45M and a $35M placement.

7. Mineral Resource: Strong resource base containing 362,200 nickel tonnes at Forrestania - 6further nickel projects in Western Australia, several with significant nickel intersections -

projects in Canada and Finland and options to acquire BioHeap bacterial leach technology.

8.

Work force:A focused, experienced and motivated workforce with all the required skills todevelop these assets. Two major awards in the past 15 months: Digger Award 2008 andProspector Award 2009.

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The Notice of Meeting includes the ratification of the appointment of a new independent non-executiveDirector Mr Richard Yeates, the re-election of two existing Directors Mr Robin Dunbar and Mr CraigOliver, the adoption of the Remuneration Report, revisions to the Company Constitution and the issue of200,000 options at $7.50 per share to each of the Directors.

Recommendation for Directors Options

Western Areas advises that the Remuneration Committee has resolved to issue 200,000 option to each of

the Directors (total 1,400,000 options) subject to shareholder approval at the Annual General Meeting.The options will be exercisable at $7.50 per share and vest over a twenty four month period and expireon 30 September 2012. The exercise price represents more than a 43% premium over the weightedaverage price of the Companys ordinary shares for the five trading days preceding the date of themeeting in which Directors resolved to issue these options.

Issue of Employee Options

Western Areas advises that it has offered 1,750,000 options to employees under the terms of theCompanys Employee Share Option Plan. The options are exercisable at $7.25 per share and vest over atwenty four month period and expire on 30 September 2012. The exercise price represents more than a

40% premium over the weighted average price of the Companys ordinary shares for the five tradingdays preceding the date of the meeting in which Directors resolved to issue these options. The Companyalso advises that 200,000 options have been offered to consultants of Western Areas upon similar terms.

The past issue of options to employees and directors has been very successful in retaining andmotivating key personnel and providing them with the opportunity to become closely aligned with theCompany. It has also provided the Company with the opportunity to raise capital at a significant

premium to the share price at the time the options were issued.

We look forward to personally talking with shareholders at the meeting and providing an update onWestern Areas many activities. We also hope to introduce to you a number of our senior staff at the

meeting.

Yours faithfully

Julian Hanna

Managing Director

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Western Areas NLACN 091 049 357

NOTICE OF ANNUAL GENERAL MEETING

TIME: 3.30pm (WST)

DATE: 23 October 2009

PLACE: The Gershwins Room

Hyatt Regency Perth

99 Adelaide Terrace

Perth, Western Australia, 6000

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they

should vote, they should seek advice from their professional advisers prior to voting.

The Western Areas Annual Report is now available on the Companies website at www.westernareas.com.au

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the

Company Secretary on (+61 8) 9334 7777.

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Page 2 NOTICE OF ANNUAL GENERAL MEETING

Notice of Annual General Meeting (setting out the proposed resolutions) 3

Explanatory Statement (explaining the proposed resolutions) 6

Glossary 14

Schedule 1 15

Schedule 2 17

Proxy Form 19

TIME AND PLACE OF MEETING AND HOW TO VOTE

VENUE

The Annual General Meeting of the Shareholders to which this Notice of Meeting relates will be held at

3.30pm (WST) on 23 October 2009

The Gershwins Room

Hyatt Regency Perth

99 Adelaide Terrace

Perth, Western Australia, 6000

YOUR VOTE IS IMPORTANT

The business of the Annual General Meeting affects your shareholding and your vote is important.

VOTING IN PERSON

To vote in person, attend the Annual General Meeting on the date and at the place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the enclosed Proxy Form and return by:

(a) post to Western Areas NL, Suite 3, Level 1, 11 Ventnor Avenue, West Perth, Western Australia; or

(b) facsimile to the Company on facsimile number (+61 8) 9486 7866,

so that it is received not later than 2.30pm(WST) on 21 October 2009.

Proxy Forms received later than this time will be invalid.

Contents Page

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Page 3

Notice Of Annual General Meeting

Notice is given that the Annual General Meeting of Shareholders will be held at 3.30pm (WST) on 23 October 2009 at

The Gershwins Room, Hyatt Regency Perth, 99 Adelaide Terrace Perth 6000, Western Australia.

The Explanatory Statement to this Notice of Meeting provides additional information on matters to be considered at the

Annual General Meeting. The Explanatory Statement, Schedules and the Proxy Form are part of this Notice of Meeting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons

eligible to vote at the Annual General Meeting are those who are registered Shareholders of the Company at close of

business on 21 October 2009.

Terms and abbreviations used in this Notice of Meeting, Schedules and Explanatory Statement are defined in the Glossary.

AGENDA

ORDINARY BUSINESS

SUMARY PRESENTATION

By Julian Hanna, Managing Director.

FINANCIAL STATEMENTS AND REPORTS

To receive and consider the annual financial report of the Company for the financial year ended 30 June 2009 together with

the declaration of the directors, the directors report, the remuneration report and the auditors report.

RESOLUTIONS

RESOLUTION 1 ADOPTION OF REMUNERATION REPORT

To consider and, if thought fit, to pass, with or without amendment, the following resolution as a non-binding resolution:

That, for the purpose of Section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption

of the remuneration report as contained in the Companys annual financial report for the financial year ended 30 June 2009.

RESOLUTION 2 ADOPTION OF NEW CONSTITUTION

To consider and, if thought fit, to pass, with or without amendment, the following resolution as aspecial resolution:

That, for the purpose of section 136(2) of the Corporations Act and all other purposes, the Constitution contained in the

document submitted at the Annual General Meeting and signed by the Chairman for the purpose of identification is approved

and adopted as the Constitution of the Company in substitution for and to the exclusion of the existing Constitution of the

Company with effect from the end of the Annual General Meeting.

RESOLUTION 3 REAPPOINTMENT OF DIRECTOR MR RICK YEATES

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

That, for the purposes of clause 11.6 of the Constitution and for all other purposes, Mr Rick Yeates who was appointed a

Director on 2 September 2009 is reappointed as a Director of the Company.

RESOLUTION 4 RE-ELECTION OF DIRECTOR MR ROBIN DUNBAR


That, for the purposes of clause 11.3 of the Constitution and for all other purposes, Mr Robin Dunbar, a Director who retires by

rotation, and being eligible, is re-elected as a Director.

RESOLUTION 5 RE-ELECTION OF DIRECTOR MR CRAIG OLIVER

To consider and, if thought fit, to pass, with or without amendment, the following resolution as anordinary resolution:

That, for the purposes of clause 11.3 of the Constitution and for all other purposes, Mr Craig Oliver, a Director who retires by

rotation, and being eligible, is re-elected as a Director.

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NOTICE OF ANNUAL GENERAL MEETINGPage 4

RESOLUTION 6 ISSUE OF DIRECTOR OPTIONS MR DANIEL LOUGHER


That, for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is

given for the Directors to allot and issue 200,000 Director Options at an exercise price of $7.50 (a premium of 48.5% over the

closing share price at the date of the remuneration committee meeting.) to Mr Daniel Lougher (or his nominee) on the terms

and conditions set out in the Explanatory Statement.

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Mr Daniel Lougher (or his nominee) or

any of his associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who

is entitled to vote in accordance with the directions on the Proxy Form or it is cast by the person chairing the meeting as

proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

RESOLUTION 7 ISSUE OF DIRECTOR OPTIONS MR CRAIG OLIVER





closing share price at the date of the remuneration committee meeting.) to Mr Craig Oliver (or his nominee) on the terms and

conditions set out in the Explanatory Statement.

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Mr Craig Oliver (or his nominee) or




RESOLUTION 8 ISSUE OF DIRECTOR OPTIONS MR DAVID COOPER

To consider and, if thought fit, to pass the following resolution as anordinary resolution:



closing share price at the date of the remuneration committee meeting.) to Mr David Cooper (or his nominee) on the terms


Voting Exclusion: The Company will disregard any votes cast on this Resolution by Mr David Cooper (or his nominee) or




RESOLUTION 9 ISSUE OF DIRECTOR OPTIONS MR ROBIN DUNBAR




closing share price at the date of the remuneration committee meeting.) to Mr Robin Dunbar (or his nominee) on the terms


Voting Exclusion: The Company will disregard any votes cast on this Resolution by Mr Robin Dunbar (or his nominee) or

any of his associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person whois entitled to vote in accordance with the directions on the Proxy Form or it is cast by the person chairing the meeting as


Notice Of Annual General Meeting

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RESOLUTION 10 ISSUE OF DIRECTOR OPTIONS MR RICK YEATES




closing share price at the date of the remuneration committee meeting.)] to Mr Rick Yeates (or his nominee) on the terms and


Voting Exclusion: The Company will disregard any votes cast on this Resolution by Mr Rick Yeates (or his nominee) or




RESOLUTION 11 ISSUE OF DIRECTOR OPTIONS MR TERRY STREETER


That, for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval isgiven for the Directors to allot and issue 200,000 Director Options at an exercise price of $7.50 (a premium of 48.5% over the

closing share price at the date of the remuneration committee meeting.) to Mr Terry Streeter (or his nominee) on the terms and


Voting Exclusion: The Company will disregard any votes cast on this Resolution by Mr Terry Streeter (or his nominee) or




RESOLUTION 12 ISSUE OF DIRECTOR OPTIONS MR JULIAN HANNA




closing share price at the date of the remuneration committee meeting.) to Mr Julian Hanna (or his nominee) on the terms and


Voting Exclusion: The Company will disregard any votes cast on this Resolution by Mr Julian Hanna (or his nominee) or




TECHNICAL PRESENTATION

By Dan Lougher, Operations Director.

DATED: 23 SEPTEMBER 2009

BY ORDER OF THE BOARD

JOSEPH BELLADONNA

WESTERN AREAS NL

COMPANY SECRETARY

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Explanatory Statement

This Explanatory Statement has been prepared for the information of the Shareholders in connection with the business to

be conducted at the Annual General Meeting to be held at 3.30pm (WST) on 23 October 2009 at The Gershwins Room,

Hyatt Regency Perth, 99 Adelaide Terrace, Perth 6000, Western Australia.

The purpose of this Explanatory Statement is to provide information which the Directors believe to be material to

Shareholders in deciding whether or not to pass the Resolutions in the Notice of Meeting.

1. FINANCIAL STATEMENTS AND REPORTS

In accordance with the Corporations Act, the business of the Annual General Meeting will include receipt and consideration

of the annual financial report of the Company for the financial year ended 30 June 2009 together with the declaration of the

directors, the directors report, the remuneration report and the auditors report.

There is no requirement for Shareholders to approve these reports. However, the Chairman will allow a reasonable

opportunity for Shareholders to ask questions or make comments about those reports and the management of the

Company. Shareholders will be given a reasonable opportunity to ask the auditor questions about the conduct of the audit

and the preparation and content of the auditors report.

In addition to the taking of questions at the meeting, written questions to the Chairman about the management of the

Company or to the Companys auditor about:

the preparation and content of the Auditors Report;

the conduct of the audit;

accounting policies adopted by the Company in relation to the preparation of the financial statements; and

the independence of the auditor in relation to the conduct of the audit

may be submitted no later than 5 business days before the meeting date to the Company Secretary.

2. RESOLUTION 1 ADOPTION OF REMUNERATION REPORT

The Corporations Act requires that at a listed companys annual general meeting, a resolution that the remuneration report

be adopted must be put to the shareholders. However, such a resolution is advisory only and does not bind the Directors

or the Company. The remuneration report sets out the Companys remuneration arrangements for the Directors and senior

management of the Company.

The remuneration report is part of the Directors report contained in the annual financial report of the Company for the

financial year ending 30 June 2009.

A reasonable opportunity will be provided for discussion of the remuneration report at the Annual General Meeting.

3. RESOLUTION 2 ADOPTION OF NEW CONSTITUTION

A company may modify or repeal its Constitution or a provision of its Constitution by special resolution of Shareholders.

Resolution 2 is a special resolution which will enable the Company to adopt a new Constitution of the type required for a no

liability company listed on the ASX.

The Companys Constitution has remained largely unchanged since 1999. However, there have been a number of

developments in the principles of corporate governance and in general corporate and commercial practice for ASX listed

companies since that time. Accordingly, the new Constitution to be adopted contains a number of provisions designed

to promote the more efficient running of the Company, which should be of long term benefit to the Company and itsShareholders. It has been updated to reflect recent amendments to the Corporations Act and Listing Rules. As the changes

affect multiple provisions of the Constitution, the Company proposes to repeal the current Constitution and adopt a new

Constitution incorporating the changes, rather than amending the existing Constitution.

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Most of the proposed changes are administrative only or relatively minor and the Company believes they will not have

a significant impact on Shareholders. The major differences between the existing Constitution and the proposed new

Constitution are set out below.

Please note it is not practicable to list all of the changes to the Constitution in this Explanatory Statement and Shareholders

are invited to contact the Company if they have any queries or concerns. For this purpose, a copy of the proposed new

Constitution is available for review by Shareholders at the office of the Company and will be provided to Shareholders upon

request by contacting the Company Secretary.

(a) Definitions

A number of terms used in the existing Constitution are outdated, such as, for example, the terms proper SCH transfer,

SCH business rules, Corporations Law and Australian Stock Exchange Limited. The terms will be replaced in the new

Constitution with references to Proper ASTC Transfer, ASTC Settlement Rules, Corporations Act and ASX Limited in the

new Constitution.

In addition, references in the existing Constitution to outdated legislative provisions will be updated in the new

Constitution.

(b) Objects

Section 112(2) of the Corporations Act provides that a company may only be registered as a no liability company if its

constitution provides that its sole objects are mining purposes (as defined in the Corporations Act). Section 112(3)

provides that a no liability company must not engage in activities that are outside its mining purpose objects.

Consistent with section 112, clause 2.1 new Constitution states that the Companys sole objects are one or more of the

mining purposes set out in that clause.

(c) Calls on Shares

Clause 5 of the existing Constitution sets out in detail the procedure for forfeiture of shares in the event of a failure to pay

calls. As the Corporations Act and Listing Rules prescribe how Shares may be forfeited, the new Constitution deals with the

forfeiture of shares in a more simplified manner.

(d) Business at annual general meetings

Clause 10.2 of the existing Constitution states that the only matters that may be dealt with at a general meeting or annual

general meeting are the matters appearing in the relevant notice of meeting.

Section 250R of the Corporations Act provides that the business of an annual general meeting may include consideration of

a companys annual financial report, directors report and auditors report, the election of directors, the appointment of an

auditor and the fixing of an auditors remuneration, even if not referred to in the notice of meeting.

Clause 15.5 of the new Constitution is consistent with section 250R.

(e) Disruptions at general meetings

Clause 15.8 of the new Constitution gives the chairman specific powers to regulate the conduct of meetings, including to:

require a person to comply with searches, restrictions or other security arrangements as the Chairman considers

appropriate;

refuse entry to the meeting of a person that will not comply with those arrangements;

refuse entry to the meeting of a person who possesses a recording or broadcasting device without the

Chairmans consent, or an article that the Chairman considers dangerous, offensive or liable to cause disruption;

implement procedural rules where the meeting is unduly protracted; and

terminate the meeting where it becomes so unruly or disorderly that in the chairmans opinion it cannot be

conducted in a proper and orderly manner.

There is no equivalent clause in the existing Constitution.

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(l) Direct Voting

Clause 15.13 of the new Constitution will give the Company the ability in the future to enable Shareholders to vote directly

on resolutions to be considered at a general meeting by sending their votes to the Company prior to the meeting (by post,

facsimile or electronic means).

This would mean that a Shareholders votes could still be counted even when the Shareholder cannot personally attend a

meeting and does not appoint a proxy. Shareholders will continue to be entitled to appoint proxies if they so desire, even if

the Company decides to introduce direct voting at future meetings. The proposed amendment leaves it to the Directors to

prescribe regulations and procedures for direct voting.

There is no equivalent provision in the existing Constitution.

4. RESOLUTION 3 REAPPOINTMENT OF DIRECTOR MR RICK YEATES

In accordance with clause 11.6 of the Constitution, the Directors may appoint at anytime a person to be a Director as an

addition to the existing Directors but only where the total number of Directors does not at any time exceed the maximum

number specified by the Constitution.

Any Director so appointed holds office only until the next annual general meeting and is then eligible for re-election.

Mr Rick Yeates was appointed as a Director as at 2 September 2009 and will retire in accordance with the Constitution and

being eligible, seeks re-election.

Mr Yeates is a qualified Geologist with over 25 years experience in all facets of resource and mining project exploration

activities in Australia and overseas. He is a member of the Australasian Institute of Mining & Metallurgy.

5. RESOLUTIONS 4 AND 5 RE-ELECTION OF DIRECTORS MR ROBIN DUNBAR AND MR CRAIG OLIVER

In accordance with Listing Rule 14.4 and clause 11.3 of the Constitution, if the Company has three or more Directors, one

third (or the number nearest one-third) of those Directors must retire at each annual general meeting, provided always that

no Director (except a Managing Director) shall hold office for a period in excess of 3 years, or until the third annual general

meeting following his or her appointment, whichever is the longer, without submitting himself or herself for re-election.

The Company currently has 7 Directors and accordingly, 2 must retire.

A Director who retires by rotation under clause 11.3 of the Constitution is eligible for re-election.

Mr Robin Dunbar (Resolution 4) and Mr Craig Oliver (Resolution 5) retire by rotation and seek re-election.

A summary of Messrs Dunbar and Oliver is contained in the 2009 Annual Report.

6. RESOLUTIONS 6 TO 12 ISSUE OF DIRECTOR OPTIONS

6.1 General

On 15 September 2009 the Companys remuneration committee resolved, subject to obtaining Shareholder

approval, to allot and issue a total of 1,400,000 Options (Director Options) to the Directors, being Messrs Terry

Streeter, Julian Hanna, Daniel Lougher, David Cooper, Robin Dunbar, Rick Yeates and Craig Oliver (Related

Parties) on the terms and conditions set out below.

Specifically, the Director Options vest 50% 24 months before expiry and 50% 12 Months before expiry andexpire on 23 September 2012 and are exercisable at $7.50, which represents a 48.5% premium over the closing

price of the Shares on the day that the remuneration committee resolved to issue the Director Options.

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6.2 Corporation Act and ASX Listing Rules Requirements

For a public company, or an entity that the public company controls, to give a financial benefit to a related party

of the public company, the public company or entity must:

(b) obtain the approval of the public companys members in the manner set out in Sections 217 to 227 of the

Corporations Act; and

(c) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in Sections 210 to 216 of the Corporations Act.

In addition, ASX Listing Rule 10.11 also requires shareholder approval to be obtained where an entity issues, or

agrees to issue, securities to a related party, or a person whose relationship with the entity or a related party is, in

ASXs opinion, such that approval should be obtained unless an exception in ASX Listing Rule 10.12 applies.

The grant of the Director Options to the Related Parties requires the Company to obtain Shareholder approval

because the grant of Director Options constitutes giving a financial benefit and as Directors, Messrs Streeter,

Hanna, Lougher, Cooper, Dunbar, Yeates and Oliver are related parties of the Company.

It is the view of the Directors that the exceptions set out in Sections 210 to 216 of the Corporations Act and ASX

Listing Rule 10.12 do not apply in the current circumstances. Accordingly, Shareholder approval is sought for the

grant of Director Options to the Related Parties.

Pursuant to the exception in ASX Listing Rule 7.1(14), approval under ASX Listing Rule 7.1 is not required in order

to issue the Director Options to the Related Parties as approval is being obtained under ASX Listing Rule 10.11.

Accordingly, the issue of Director Options to the Related Parties will not be included in the 15% calculation of the

Companys annual placement capacity pursuant to ASX Listing Rule 7.1.

6.3 Shareholder Approval (Chapter 2E of the Corporations Act and Listing Rule 10.11)

Pursuant to and in accordance with the requirements of Sections 217 to 227 of the Corporations Act and ASX

Listing Rule 10.13, the following information is provided in relation to the proposed grant of Director Options:

(a) the related parties are Messrs Streeter, Hanna, Lougher, Cooper, Dunbar, Yeates and Oliver and they are related

parties by virtue of being Directors;

(b) the maximum number of Director Options (being the nature of the financial benefit being provided) to be

granted to the Related Parties (or their nominee) is:

(i) 200,000 Director Options to Mr Streeter (or his nominee);

(ii) 200,000 Director Options to Mr Hanna (or his nominee);

(iii) 200,000 Director Options to Mr Lougher (or his nominee);

(iv) 200,000 Director Options to Mr Cooper (or his nominee);

(v) 200,000 Director Options to Mr Yeates (or his nominee);

(vi) 200,000 Director Options to Mr Dunbar (or his nominee); and

(vii) 200,000 Director Options to Mr Oliver (or his nominee);

(c) the Director Options will be granted to the Related Parties no later than

1 month after the date of the Annual General Meeting (or such later date as permitted by any ASX waiver or

modification of the ASX Listing Rules) and it is anticipated the Director Options will be issued on one date;

(d) the Director Options will be granted for nil cash consideration as they are being issued for the purpose set

out in (k) and, accordingly no funds will be raised;

(e) the terms and conditions of Director Options are set out in Schedule 1;

(f ) the value of the Director Options and the pricing methodology is set out in Schedule 2;

(g) the relevant interests of the Related Parties in securities of the Company are set out below;


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Related Party Shares Options

Terry Streeter 25,799,410 800,000 (1)

Julian Hanna 1,379,179 800,000 (1)

Daniel Lougher 50,884 640,000 (2)

David Cooper 1,106,433 800,000 (1)

Craig Oliver 100,000 800,000 (1)

Robin Dunbar 102,500 800,000 (1)

Rick Yeates

1 400,000 Options exercisable at $7.50 each on or before 27 June 2010 and 400,000

Options exercisable at $17.00 each on or before 22 May 2011.

2 240,000 Employee Options exercisable at $7.50 each on or before 6 June 2010 and

400,000 Options exercisable at $17.00 each on or before 22 May 2011..

(h) the remuneration and emoluments from the Company to the Related Parties for both the current financial

year and previous financial year are set out below:

Related Party Current Financial Year PreviousFinancial Year

Terry Streeter 608,698 409,725

Julian Hanna 1,045,569 860,421

Daniel Lougher 934,959 497,691

David Cooper 561,777 382,710

Craig Oliver 945,567 735,692

Robin Dunbar 556,080 379,400

Rick Yeates

(i) if the Director Options granted to the Related Parties are exercised, a total of 1,400,000 Shares would be

allotted and issued. This will increase the number of Shares on issue from 178,889,549 to 180,289,649

(assuming that no other Options are exercised and no other Shares issued) with the effect that the

shareholding of existing Shareholders would be diluted as follows:

Related Party Issued Shares as at Director Options Issued Shares Dilutionary effect

the date of this to be issued upon exercise upon exercise of Notice of Meeting of all Director Director Options

Options

Terry Streeter 178,889,649 200,000 179,089,649 0.11%

Julian Hanna 178,889,649 200,000 179,089,649 0.11%

Daniel Lougher 178,889,649 200,000 179,089,649 0.11%

David Cooper 178,889,649 200,000 179,089,649 0.11%

Craig Oliver 178,889,649 200,000 179,089,649 0.11%

Robin Dunbar 178,889,649 200,000 179,089,649 0.11%

Rick Yeates 178,889,649 200,000 179,089,649 0.11%

TOTAL 178,889,649 1,400,000 180,289,649 0.78%

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The market price for Shares during the term of the Director Options would normally determine whether or not

the Director Options are exercised. If, at any time any of the Director Options are exercised and the Shares are

trading on ASX at a price that is higher than the exercise price of the Director Options, there may be a perceived

cost to the Company;

(j) the trading history of the Shares on ASX in the 12 months before the date of this Notice of Annual General

Meeting is set out below:

Price Date

Highest $8.49 23.09.08

Lowest $2.46 21.11.08

Last $5.06 17.09.09

(k) the primary purpose of the grant of Director Options to the Related parties is to provide a market linked

incentive package in their capacity as Directors and for the future performance by each of them in their

respective roles. The Board (other than each recipient in respect of the Resolution that relates to them)

considered the extensive experience and reputation of each Related Party within the mining industry, the

current market price of Shares and current market practices when determining the number and exercise

price of the Director Options to be issued to the Related Parties. In addition, the Board considers the grant

of the Director Options to the Related Parties to be reasonable, given the necessity to attract the highest

calibre of professionals to the Company whilst maintaining the Companys cash reserves. The Board does

not consider that there are any significant opportunity costs to the Company or benefits foregone by the

Company in issuing the Director Options upon the terms proposed;

(l) the Board acknowledges the grant of Director Options to Messrs Streeter, Cooper, Dunbar and Yeates as

non executive Directors is contrary to Recommendation 8.2 of the ASX Corporate Governance Principles

and Recommendations. However, the Board considers the grant of Director Options to Messrs Streeter,

Cooper, Dunbar and Yeates reasonable in the circumstances, given the necessity to attract the highest

calibre of professionals to the Company, whilst maintaining the Companys cash reserves;

(m) Mr Daniel Lougher declines to make a recommendation to Shareholders in relation to Resolution 6 due

to his material personal interest in the outcome of the Resolution. The other Directors, who do not

have a material interest in the outcome of Resolution 6, recommend that Shareholders vote in favour of

Resolution 6. The Board (other than Mr Daniel Lougher) is not aware of any other information that would

be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests

of the Company to pass the Resolution.

(n) Mr Craig Oliver declines to make a recommendation to Shareholders in relation to Resolution 7 due to

his material personal interest in the outcome of the Resolution. The other Directors, who do not have

a material interest in the outcome of Resolution 7, recommend that Shareholders vote in favour of

Resolution 7. The Board (other than Mr Craig Oliver) is not aware of any other information that would be

reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of

the Company to pass the Resolution.

(o) Mr David Cooper declines to make a recommendation to Shareholders in relation to Resolution 8 due



Resolution 8. The Board (other than Mr David Cooper) is not aware of any other information that would be


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(p) Mr Robin Dunbar declines to make a recommendation to Shareholders in relation to Resolution 9 due



Resolution 9. The Board (other than Mr Robin Dunbar) is not aware of any other information that would be



(q) Mr Rick Yeates declines to make a recommendation to Shareholders in relation to Resolution 10 due to

his material personal interest in the outcome of the Resolution. The other Directors, who do not have


Resolution 10. The Board (other than Mr Rick Yeates) is not aware of any other information that would be



(r) Mr Terry Streeter declines to make a recommendation to Shareholders in relation to Resolution 11 due

to his material personal interest in the outcome of the Resolution. The other Directors, who do not have


Resolution 11. The Board (other than Mr Terry Streeter) is not aware of any other information that would

be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests

of the Company to pass the Resolution;

(s) Mr Julian Hanna declines to make a recommendation to Shareholders in relation to Resolution 12 due

to his material personal interest in the outcome of the Resolution. The other Directors, who do not have


Resolution 12. The Board (other than Mr Julian Hanna) is not aware of any other information that would be


the Company to pass the Resolution; and

7. ENQUIRIES

Shareholders are required to contact the Company Secretary, Mr Joseph Belladonna or Mr Craig Oliver on

(+ 61 8) 9334 7777 if they have any queries in respect of the matters set out in these documents.

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Glossary

$means Australian dollars.

Annual General Meeting means the meeting convened by this Notice of Meeting.

ASIC means the Australian Securities and Investments Commission.

ASXmeans ASX Limited.

ASX Listing Rulesmeans the Listing Rules of ASX.

Boardmeans the current board of directors of the Company.

Business Days means any day other than a Saturday, Sunday or public holiday in the State of Western Australia.

Companymeans Western Areas NL (ACN 091 049 357).

Constitution means the Companys constitution from time to time.

Consultant Optionsmeans options to acquire Shares issued pursuant to Resolution 11.

Consultant Option Holdermeans the holder of a Consultant Option.

Corporations Actmeans the Corporations Act 2001 (Cth).

Directorsmeans the current directors of the Company.

Director Option means an Option granted pursuant to Resolutions 6 to 12 (inclusive) with the terms and conditions set

out in Schedule 1.

Director Option Holdermeans the holder of a Director Option.

Explanatory Statementmeans the explanatory statement accompanying this Notice of Meeting.

Notice of Meetingor Notice of Annual General Meeting means this notice of annual general meeting including the

Explanatory Statement and Schedules dated 23 September 2009.

Resolutionsmeans the resolutions set out in the Notice of Meeting, or any one of them, as the context requires.

Sharemeans a fully paid ordinary share in the Company.

Shareholder means a holder of a Share.

WSTmeans Western Standard Time as observed in Perth, Western Australia.

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Schedule 1 Terms And Conditions Of Director Options

The Director Options entitle the holder to subscribe for Shares on the following terms and conditions:

(a) Each Director Option gives the Director Option Holder the right to subscribe for one Share in the Company, subject

to the Vesting conditions as set out in subclause (d) being met. To obtain the right given by each Director Option,

the Director Option Holder must exercise the Director Options in accordance with the terms and conditions of the

Director Options..

(b) The Director Options will expire at 5:00 pm (WST) onon 17 September 2012(Director Option Expiry Date). Any

Director Option not exercised before the Director Option Expiry Date will automatically lapse on the Director Option

Expiry Date.

(c) The amount payable upon exercise of each Director Option will be $7.50 (Director Option Exercise Price).

(d) 50% of the Director Options will Vest 24 months before the Expiry Date, and the final 50% of Director Options will Vest

12 months before the Expiry Date.

(e) Unless the Board in their absolute discretion determine otherwise, where such discretion can only be exercised where

termination of employment occurs due to retirement, death or permanent disability, Unvested Director Options willlapse upon the earlier of:

(i) the a termination of employment, office or services, for any reason; and

(ii) a determination by the Board that the Director Option holder has acted fraudulently, dishonestly, or in breach of

his or her obligations to the Company or an Associated Body Corporate.

(f ) Unless the Board in their absolute discretion determine otherwise, Vested Director Options shall lapse upon the earlier of:

(i) 1 month after the Director Option holder terminating employment, office or services for any reason, except for

retirement, death and permanent disability;

(ii) 6 months after the Director Option holder ceases employment by reason of retirement, death or permanent

disability; and

(iii) a determination by the Board that the Director Option holder has acted fraudulently, dishonestly, or in breach of

his or her obligations to the Company or an Associated Body Corporate.

(g) The Director Options held by each Director Option Holder may be exercised in whole or in part, and if exercised in

part, multiples of 1,000 must be exercised on each occasion.

(h) A Director Option Holder may exercise their vested Director Options by lodging with the Company, before the

Director Option Expiry Date:

(i) a written notice of exercise of Director Options specifying the number of Director Options being exercised; and

(ii) a cheque or electronic funds transfer for the Director Option Exercise Price for the number of Director Optionsbeing exercised;

(Director Option Exercise Notice).

(i) A Director Option Exercise Notice is only effective when the Company has received the full amount of the Director

Option Exercise Price in cleared funds.

(j) Within 10 Business Days of receipt of the Director Option Exercise Notice accompanied by the Director Option

Exercise Price, the Company will allot the number of Shares required under these terms and conditions in respect of

the number of Director Options specified in the Director Option Exercise Notice.

(k) The Director Options are not transferable.

(l) All Shares allotted upon the exercise of Director Options will upon allotment rank pari passu in all respects with other

Shares.

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(m) The Company will not apply for quotation of the Director Options on ASX. However, The Company will apply

for quotation of all Shares allotted pursuant to the exercise of Director Options on ASX within 10 Business Days

after the date of allotment of those Shares.

(n) If at any time the issued capital of the Company is reorganised, all rights of an Director Option Holder are to

be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the

reconstruction.

(o) There are no participating rights or entitlements inherent in the Director Options and Director Option Holder

will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the

Director Options. However, the Company will ensure that for the purposes of determining entitlements to any

such issue, the record date will be at least 7 Business Days after the issue is announced. This will give Director

Option Holders the opportunity to exercise their Director Options prior to the date for determining entitlements

to participate in any such issue.

(p) Subject to subclause (n), a Director Option does not confer the right to a change in Director Option Exercise

Price or a change in the number of underlying securities over which the Director Option can be exercised.

Schedule 1 Terms And Conditions Of Director Options

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Schedule 2 Valuation Of Director Options

The Director Options to be issued to the Related Parties pursuant to Resolutions 6 to 10 and 12 and 13 (inclusive), have

been independently valued.

Using the theoretical Binomial Option Pricing Model and based on the assumptions set out below, the Director Options

were ascribed a value range, as follows:

Assumptions:

Valuation date 17 September 2009

Closing Market price of Shares $5.06

Director Option Exercise price $7.50

Director Option Expiry date 17 September 2012

Risk free interest rate 4.66%

Volatility (Average) 75%

Indicative value per Director Option $1.93

Total Value of Director Options $2,702,000

- Terry Streeter $386,000

- Julian Hanna $386,000

- Daniel Lougher $386,000

- David Cooper $386,000

- Robin Dunbar $386,000

- Craig Oliver $386,000

- Rick Yeates $386,000

Note: The valuation ranges noted above are not necessarily the market prices that the Director Options could be traded at

and they are not automatically the market prices for taxation purposes.

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Notes

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ANNUAL GENERAL MEETING

I/We

being a member of Western Areas NL entitled to attend and vote at the Annual General Meeting, hereby

Appoint

Name of proxy

OR Mark this box if you wish to appoint the Chair of the Annual General Meeting as your proxy

or failing the person so named or, if no person is named, the Chair of the Annual General Meeting, or the Chairs nominee, to vote in

accordance with the following directions, or, if no directions have been given, as the proxy sees fit, at the Annual General Meeting to be held

at 3.30pm (WST) on 23 October 2009 at The Gershwins Room, Hyatt Regency Perth, at any adjournment thereof.

Voting on Business of the Annual General Meeting FOR AGAINST ABSTAIN

Resolution 1 Adoption of Remuneration Report

Resolution 2 Adoption of New Constitution

Resolution 3 Reappointment of Director Mr Rick Yeates

Resolution 4 Re-election of Director Mr Robin Dunbar

Resolution 5 Re-election of Director Mr Craig Oliver

Resolution 6 Issue of Options Daniel Lougher

Resolution 7 Issue of Options Craig Oliver

Resolution 8 Issue of Options David Cooper

Resolution 9 Issue of Options Robin Dunbar

Resolution 10 Issue of Options Rick Yeates

Resolution 11 Issue of Options Terry Streeter

Resolution 12 Issue of Options Julian Hanna

OR

If the Chair of the Annual General Meeting is appointed as your proxy, or may be appointed by default, and you do

not wish to direct your proxy how to vote as your proxy in respect of Resolutions 6 to 10 and 12 and 13 please place

a mark in this box.

By marking this box, you acknowledge that the Chair of the Annual General Meeting may exercise your proxy even if he has an

interest in the outcome of Resolutions 6 to 12 and that votes cast by the Chair of the Annual General Meeting for Resolutions 6 to 12

other than as proxy holder will be disregarded because of that interest. If you do not mark this box, and you have not directed your

proxy how to vote, the Chair will not cast your votes on Resolutions 6 to 12 and your votes will not be counted in calculating the

required majority if a poll is called on Resolutions 6 to 12.

If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of

hands or on a poll and your votes will not to be counted in computing the required majority on a poll.

If two proxies are being appointed, the proportion of voting rights this proxy represents is ---------------------------------------------------------------------------------------%

Signed this ------------------------------------------------------------------------------------------------------------------------------------ day of ------------------------------------------------------------------------------------------------------------ 2009

By:

Individuals and joint holders Companies (affix common seal if appropriate) Signature

Signature Director

Signature Director Company Secretary

Signature Sole Director and Sole Company Secretary

PROXY FORM

APPOINTMENT OF PROXYWESTERN AREAS NLACN 091 049 357

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WESTERN AREAS NL

ACN 091 049 357

Instructions for Completing Appointment of Proxy Form

1. A member entitled to attend and vote at an Annual General Meeting is entitled to appoint not more than twoproxies to attend and vote on a poll on their behalf. The appointment of a second proxy must be done on a separate

copy of the Proxy Form. Where more than one proxy is appointed, such proxy must be allocated a proportion of the

members voting rights. If a member appoints two proxies and the appointment does not specify this proportion,

each proxy may exercise half the votes. A duly appointed proxy need not be a member of the Company.

2. Where a members holding is in one name the holder must sign. Where the holding is in more than one name, all

members should sign.

3. Where a Proxy Form or form of appointment of corporate representative is lodged and is executed under a power of

attorney, the power of attorney must be lodged in like manner as this Proxy Form.

4. Corporate members should comply with the execution requirements set out on the Proxy Form or otherwise with

the provisions of Section 127 of the Corporations Act. Section 127 of the Corporations Act provides that a company

may execute a document without using its common seal if the document is signed by :

2 directors of the company;

a director and a company secretary of the company; or

for a proprietary company that has a sole director who is also the sole company secretary that director.

For the Company to rely on the assumptions set out in Section 129(5) and (6) of the Corporations Act, a document

must appear to have been executed in accordance with Section 127(1) or (2). This effectively means that the status

of the persons signing the document or witnessing the affixing of the seal must be set out and conform to the

requirements of Section 127(1) or (2) as applicable. In particular, a person who witnesses the affixing of a common

seal and who is the sole director and sole company secretary of the company must state that next to his or her

signature.

5. Completion of a Proxy Form will not prevent individual members from attending the Annual General Meeting in

person if they wish. Where a member completes and lodges a valid Proxy Form and attends the Annual General

Meeting in person, then the proxys authority to speak and vote for that member is suspended while the member is

present at the Annual General Meeting.

6. To vote by proxy, please complete and sign the enclosed Proxy Form and return by:

(a) post to Western Areas NL, Suite 3, Level 1, 11 Ventnor Avenue, West Perth, Western Australia; or

(b) facsimile to the Company on facsimile number +61 8 9486 7866,

so that it is received not later than 2.30pm (WST) on 21 October 2009.

Proxy forms received later than this time will be invalid.

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