Black Swan nickel project sale a lucky break for Poseidon

Poseidon Nickel, a junior mining company backed by Andrew “Twiggy” Forrest, will purchase the Black Swan project from Russian powerhouse Norilsk Nickel.

Poseidon Nickel, a junior mining company backed by Andrew “Twiggy” Forrest, will purchase the Black Swan project from Russian powerhouse Norilsk Nickel.

The deal bolsters plans to reopen Poseidon’s Windarra nickel mine, and means the issue of where ore will be processed is eliminated, slashing capital expenditure costs by up to $250 million.

The acquisition of the project brings with it the Black Swan nickel sulphide plant which is capable of processing Windarra ore.

The plant has a proven throughput capacity of 2,150,000 tpa.

“It’s the answer we needed. It probably takes a quarter of a billion dollars out of our capital requirements and a year out of the schedule, so for us it’s a huge step forward,” Poseidon chief David Singleton explained.

Poseidon will have the option to either recommission the plant in its current location, 53km north east of Kalgoorlie, or relocate it to Windarra.

The current location has the benefit of being connected to the power grid and a nearby workforce in Kalgoorlie a benefit the company will weigh against the cost of trucking ore from Windarra to the current plant.

The Black Swan project also comes with existing nickel resources of that can be fed into the plant.

Poseidon would not reveal how much it would pay for Black Swan, but noted it would not need to raise additional funds.

The company had about $6.5m in the bank before the deal.

Nickel prices have surged in recent months after Indonesia banned nickel exports, creating a global supply deficit.

This has seen a price rise of 42 per cent to $US19,300 a tonne, or just over $US8 a pound.

Windarra is expected to produce an average of 9600 tonnes annually over its 10-year life span.

The deposit, 260 kilometres north east of Kalgoorlie, operated as a mine between 1974 and 1995.

Singleton said Poseidon would be making further announcements which will complement the Black Swan acquisition in the coming weeks.

The deal is a shot in the arm for Poseidon who let 45 workers go last year after plans to recommission Windarra were stumped by failed finance deals.

Forrest quit the as Poseidon chairman late last year and has since dropped his holdings in the company from 31.6 per cent to just 25 per cent.

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