Poseidon Nickel looks to raise cash for nickel mine

Poseidon Nickel has requested a trading halt before it tries to raise money for its Windarra project in Western Australia.

More details of proposed capital raising will be announced tomorrow and comes after the aspiring miner signed a conditional offtake agreement with BHP’s Nickel West.

The deal will  see BHP treat Poseidon ore at its concentrator at Leinster and purchase the concentrated product.

The contract is for a minimum quantity of 350,000 tonnes of ore per annum and a maximum of 500,000 tonnes which can be extended to 700,000 tonnes by mutual agreement.

A bullish nickel market outlook and the acquisition of two quality deposits this year has seen Poseidon’s share price rise from eight cents in July to 21 cents as of today.

Poseidon chief David Singleton said the company had removed capital funding risk through the acquisition the Black Swan and Lake Johnston projects.

Lake Johnston, 117km west of Norseman, includes the Maggie Hays underground mine and a 1.5 million tonne per annum concentrator plant.

It includes mineral resources estimated to contain 70,500 tonnes of nickel, increasing Poseidon’s total nickel inventory to over 400,000 tonnes.

The acquisition of Black Swan means Poseidon also owns a nickel sulphide plant with a proven throughput capacity of 2,150,000 tpa.

Both deals 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.

“Poseidon now has 3 nickel projects all within 270 kms of Kalgoorlie,” Singleton said.

“Importantly all 3 projects have the mines and access to infrastructure to enable production to be brought on-line quickly and at low levels of capital investment.

 “All of the projects are in well-endowed mining regions and have demonstrated resource extension potential which could lead to extended production life.”

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.

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