Poseidon mothballs Lake Johnston

Local miner Poseidon Nickel has put its Lake Johnston operation near Norseman on care and maintenance, reduced its staff and cut board member salaries as it awaits improvements in the nickel price.

The company wrapped up its planned pre-production activities at Lake Johnston and has begun shipping about 3,000 tonnes of nickel concentrate, worth about $1.5 million, to China, which was recovered through the filtration circuit as part of plant testing and restart work.

However, Poseidon has decided to delay a formal opening of the site until nickel prices improve, and has reduced its site and office-based workforce to basic care and maintenance levels to reduce costs.

It also cut salaries to board members, the chief executive and senior management by 20 per cent until the site can be reactivated.

But it has left Lake Johnston in good enough condition that it can be reactivated within four months of what it deems an improvement in the market, with licensing, technical, offtake and working capital financing either complete or nearing completion.

Poseidon bought Lake Johnston from Norilsk Nickel last year for about $1 million.

Its Black Swan mine (which it also purchased from Norilsk Nickel) and Mt Windarra mine are also on care and maintenance.

Chief executive David Singleton said the recent restart activity at Lake Johnston was completed in the expectation of an improving nickel price environment during the year, which was predicted by most pundits.

“Unfortunately economic uncertainties, which continue to play out, have conspired to prevent the nickel price keeping pace with us,” he said.

“Therefore, with this work finished, the company is completing a program of major cost reductions across the board whilst preserving our ability to move into production at the appropriate time.”

Poseidon shares were 19 per cent lower to 9.3 cents each at 11am.