24/02/2014 - 11:52

Poseidon appoints new chairman

24/02/2014 - 11:52

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Poseidon Nickel has signalled it no longer plans to pursue a major debt capital raising in the United States, appointing a new chairman to replace US-based Bud Scruggs.

Poseidon appoints new chairman
Poseidon Nickel chief executive David Singleton.

Poseidon Nickel has signalled it no longer plans to pursue a major debt capital raising in the US, appointing a new chairman to replace US-based Herbert Scruggs

Mr Scruggs became Poseidon chairman in September last year, replacing the departing Andrew Forrest who stood down citing overwhelming philanthropic duties.

The company said at the time that Mr Scruggs had deep and current experience in the US capital markets, which it viewed as a key component in bringing its Mt Windarra nickel project to production.

However Poseidon told the market today that Mr Scruggs' experience in the US capital markets "is no longer a primary issue for Poseidon as it moves towards production and focuses on Australian investors".

The company's shares slumped on the news, trading more than 20 per cent lower at 8.3 cents at 11:47am WST.

Poseidon has appointed non-executive director and former Alinta executive Chris Indermaur as its new chairman.

It has also appointed chief operating officer Robert Dennis to its board as a non-executive director.

The company has meanwhile completed a $3.8 million capital raising through a placement of about 54 million fully paid ordinary shares at 7 cents per share to professional and sophisticated investors.

The funds will go towards pre-production activities at the Mt Windarra project as the company continues to negotiate a potential offtake agreement.

Poseidon has completed a definitive feasibility study and secured all necessary permits at the mine but has been forced to delay construction of an ore concentator due to a lack of funding. 

In an update to the ASX earlier this month, Poseidon said it was negotiating a potential offtake agreement which would allow it to mine ore at Mt Windarra and ship it for treatment at a third-party facility.

If the deal goes ahead, Poseidon claims the agreement would allow it to deliver 350,000 to 700,000 tonnes of ore per annum for an initial period of two years.

The company hopes to commence operations during the current calendar year and has estimated the capital cost of restarting mining operations at less than $15 million.

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