Poseidon Nickel has begun an $8 million refurbishment of its Mt Windarra nickel mine, in preparation for an underground mining restart in 10 months.
The stock gained 1.5 per cent on the news, closing trade today at $0.32.
The first step of operations was repairing the decline roadway to enable access for an underground jumbo drilling machine.
Poseiden will now complete the remaining 420 vertical metres of decline to gain access to the previous lowest level of the mine.
"This is the key step to reopening the mine and recommencing production," chief executive David Singleton said.
"We are now fully funded through the recent $US20 million convertible note facility from Harbinger and committed to the program ahead."
Poseidon shareholders will vote on terms of the funding at an extraordinary general meeting March 28.
The additional funds from Harbinger Capital Partners would be used for drilling and exploration, which would be performed by contractor GSM Mining, Poseiden said.
The Mt Windarra mine was operated by Western Mining Corporation until the early 1990s when it was shut due to low nickel prices.
WMC was taken over by mining giant BHP Billiton in 2005.
