Australia's Western Areas Monday upgraded its nickel in ore production guidance by around 4% to 27,000 mt for fiscal year 2013-2014, from 25,000-26,000 mt previously.

Production guidance for nickel in concentrate has also been revised up to 25,000 mt, from 23,000-24,000 mt, for the financial year ending June 30, 2014.

The company has also revised down its cash costs to produce nickel in concentrate to A$2.70/lb ($2.40/lb) for fiscal 2014, from A$2.80-2.90/lb previously.

The guidance upgrades were due to the continued strong performance of the company's operations, Western Areas Managing Director Dan Lougher said in a statement.

Western Areas operates the Flying Fox and Spotted Quoll mines in Western Australia. The mines produced 7,407 mt during the October-December 2013 period, down by around 10% from the previous quarter.

The company also operates the Cosmic Boy concentrator, which produced 6,409 mt over October-December. Output from Cosmic Boy is sold in two offtake agreements: with BHP Billiton for 12,000 mt/year and 13,000 mt/year with China's Jinchuan smelter.

Western Areas said in its recent production report it expects to complete offtake contract agreements with Jinchuan early in the March quarter of 2015.

"The company has already fielded early inquiries and bids for this offtake contract, demonstrating the strong demand for the premium concentrate for blending purposes," Western Areas said last month.

Western Areas plans to tender the offtake contract for 12,000-13,000 mt/year of contained nickel in concentrate in the second half of 2014.