Poseidon Nickel, a junior mining company backed by Andrew “Twiggy” Forrest, has bought the Lake Johnston Nickel Project from Norilsk Nickel.
Lake Johnston, 117km west of Norseman, includes the Maggie Hays underground mine and a 1.5 million tonne per annum concentrator plant.
The process plant and mine were placed into care and maintenance in April 2013.
Poseidon said it will look to restart mining at Lake Johnston shortly after the sale deal is complete.
The project has produced over 12,000 tonnes nickel per annum in a good quality smeltable concentrate, the company said.
Lake Johnston includes mineral resources estimated to contain 70,500 tonnes of nickel, increasing Poseidon’s total nickel inventory to over 400,000 tonnes.
The deal bolstered 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,” Poseidon chief David 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.”
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.