06/09/2019 - 09:24

Poseidon Nickel targets restart of $56m WA project

06/09/2019 - 09:24

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Andrew Forrest-backed Poseidon Nickel has edged closer to restarting operations at its Black Swan project in Western Australia following a recent surge in nickel prices.

Poseidon Nickel targets restart of $56m WA project
The Black Swan project comprises a probable metal resources of 16,200t of nickel.

Andrew Forrest-backed Poseidon Nickel has edged closer to restarting operations at its Black Swan project in Western Australia following a recent surge in nickel prices.

Prices of Nickel surged this week after Indonesia, the world's biggest nickel ore producer, said it would stop exports from the start of next year, two years earlier than it initially indicated.

The improved market dynamics provided a price foundation to support a restart of the Black Swan operations, Poseidon said in a statement.

The operation was placed into care and maintenance in February 2009 following a period of low nickel prices.

The nickel-focused miner, which Andrew Forrest has a 17 per cent stake in, said the restart would take several months and may cost $30 million.

"We are now entering an important and critical time for Poseidon aided with tailwinds from improving, sustained increased nickel prices," said David Riekie, who was appointed interim chief executive officer on Monday.

In July last year, Poseidon released a feasibility study confirming the viability of restarting its mothballed Black Swan project near Kalgoorlie, with an estimated capital expenditure of $56.7 million.

The project comprises a probable metal resources of 16,200 tonnes of nickel at a grade of 0.9 per cent for 1,790t.

Goldman Sachs said in a note on Sunday it expected London nickel prices to reach $US20,000/t in three months due to the ban.

Prices currently sit at $US17,500/t.

Earlier this week, the restart of the Ravensthorpe nickel project officially commenced, as owner First Quantum Minerals launched a recruitment drive to fill at least 350 direct roles at the mine.

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