Poseidon Nickel says its historic Windarra nickel mine will cost $197 million to re-start, with a feasibility study flagging a 10-year mine life and first production in 2014.
The Andrew Forrest-chaired miner released a definitive feasibility study for the Windarra project today, with the report demonstrating an underground mine with average operating costs of $US3.35 per pound of nickel concentrate.
The mine is expected to bring in total EBITDA of $US1.8 billion, and has a net present value of $US546 million.
Poseidon is estimating to produce 9,600 tonnes of nickel concentrate per year from the Windarra project, which is located 260 kilometres north east of Kalgoorlie-Boulder.
The feasibility study looked at re-starting the brownfields Mt Windarra underground operation, as well as a new underground mine at the nearby Cerberus deposit.
Poseidon also flagged the construction of a nickel sulphide concentrator plant and re-treatment plant on site, in addition to the development of a gold production facility.
The operation has received all necessary government approvals to commence production, subject to final financing and off-take arrangements.
International financier Credit Suisse has been engaged to assess financing alternatives for the project.
Mr Forrest said the feasibility study confirmed Poseidon as a viable low cost nickel producer.
“I very much look forward to the day we will cut the ribbon on first production at Poseidon, built upon the foundations of the celebrated Windarra mine,” Mr Forrest said in a statement.
Poseidon managing director David Singleton said the timing of the project was significant, with first production at Windarra set to coincide with a widely-forecast recovery in world nickel markets.
“Successful return to production at Windarra will represent a link back to the celebrated past of Western Australia’s nickel industry, with a homecoming back to the original 1969 Poseidon nickel discovery that commenced the 1970s nickel boom,” Mr Singleton said.
The Windarra mine originally operated from the early 1970s until 1995, when the project's then-owner WMC ceased underground operations.
Poseidon Nickel acquired the project in 2005, renaming itself from Niagra Mining in honour of the mine's original discoverers.
At 10:00AM, WST, Poseidon shares had gained 10.5 per cent, trading at 21 cents.
