Poseidon flags Lake Johnston upgrade

Shares in Poseidon Nickel have surged after it flagged a major resource upgrade at the recently purchased Lake Johnston nickel project near Norseman.

In a statement today, the Subiaco-based nickel explorer said it expected a high proportion of the resources at Lake Johnston to be converted into the indicated JORC category, and would be available for potential conversion to mining reserves.

Managing director David Singleton said while the company was unable to comment on the likely outcome, things were moving “very positively”.

“The key now is the resource and reserve modelling which is well under way,” Mr Singleton said.

About 100 underground drill holes have been added into the site’s resource database, Poseidon said, while 27 drill holes with incomplete data were currently being re-assayed.

Poseidon plans to produce a new updated mine plan for Lake Johnston within the next three months using a revised resource model it said was currently under development.

“This modelling, aided by the knowledge of recent mine activities, should allow for an accurate production of the current mine life, throughput levels and costs of production,” the company said.

Poseidon also plans to announce a new general manager for Lake Johnston.

After purchasing Lake Johnston from Norilsk Nickel in November last year, Poseidon said it would cost $8.3 million to restart the project.

Shares in Poseidon were 9 per cent higher at 12 cents per share at 10:10am.