18/05/2015 - 10:52

Poseidon progresses Lake Johnston restart

18/05/2015 - 10:52

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Poseidon Nickel says its Lake Johnston project could be up and running in just a few months, although at a higher cost following completion of a bankable feasibility study.

Poseidon progresses Lake Johnston restart
Poseidon Nickel's Lake Johnston nickel project near Norseman.

Poseidon Nickel says its Lake Johnston project could be up and running in just a few months, although at a higher cost following completion of a bankable feasibility study.

The Subiaco-based nickel miner said it would take up to four months to restart operations at the nickel mine near Norseman, with pre-production capital costs totalling about $14 million.

That’s nearly $6 million more than what it estimated in November when it bought the project from Norilsk Nickel.

“The tailings facility requires an increase in capacity by increasing the height of the dam walls,” Poseidon said.

“The licence for this has been approved by the Department of Mines and Petroleum. Tenders have been released and Poseidon expects to place a formal contract for the works in the near future.”

According to the study, the mine will have an initial life of 30 months with a production output of 8,000 tonnes per annum of nickel, at an all-in sustaining cost of $US5.39 per pound payable equivalent to a C1 cash cost of $US3.43 per pound.

Poseidon also said about 1.7 million tonnes of previously mined and unprocessed nickel, which is currently stockpiled at its Black Swan project, would progressively transported and processed at Lake Johnston, which has a 1.5mtpa processing plant.

The company plans to employ about 180 workers at the site, with the majority to be drive-in-drive-out, with onsite accommodation available at the existing Windy Hill camp.

“Whilst nickel prices have been depressed in recent months, the low capital requirement for the project combined with lower input cost rates have demonstrated that Lake Johnston can be economic at the current nickel price,” Poseidon said.

“Poseidon expects nickel prices to progressively improve from recent lows over the next year.”

The company has entered negotiations with potential nickel offtake partners, and says it expects to receive offers to sell all of the concentrate produced at Lake Johnston either separately or in conjunction with a prepayment facility to fund working capital requirements.

Poseidon shares were 11.1 per cent higher to 15 cents each at 10:45am.

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