Poseidon Nickel raise $30 million for mine restart

Poseidon Nickel has raised $30 million which will enable it to reopen the Windarra nickel mine.

The cash was raised through a share placement with Petra Capital and was priced at a discounted rate of 18 cents a share.

The company said the money will allow it to complete refurbishment activities at Mt Windarra, commence capital works at Lake Johnston, and repay debt.

The restart costs for Windarra have previously been estimated at $11 million.

Under a new deal, ore from the mine will be trucked to BHP Billiton’s Nickel West concentrator at Leinster where the concentrate produced will be bought by BHP.

Meanwhile, Poseidon is also in the process of finalising capital costs for the restart of its newly acquired Lake Johnston project, expected to be less than $10 million.

The company said it intends to provide additional project liquidity for working capital and contingency through debt finance, with an announcement expected in 2015.

Poseidon chief David Singleton said he was delighted the company was receiving strong support from investors that would allow production to commence.

“We now have an enviable pipeline of projects, supported by a strong balance sheet with an emerging nickel market.”

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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