07/07/2014 - 13:36

Poseidon to buy Black Swan mine

07/07/2014 - 13:36

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Shares in Perth-based Poseidon Nickel have risen 23.7 per cent after the company agreed to acquire Norilsk Nickel’s Black Swan project near Kalgoorlie for an undisclosed amount.

Poseidon to buy Black Swan mine
Poseidon managing director and chief executive officer David Singleton.

Shares in Perth-based Poseidon Nickel have risen 23.7 per cent after the company agreed to acquire Norilsk Nickel’s Black Swan project near Kalgoorlie for an undisclosed amount.

The purchase of the project includes ownership of the Black Swan nickel sulphide plant and an open-pit mine containing 185,800 tonnes of nickel.

The processing plant was upgraded in 2006, but was put on care and maintenance in 2009 during the GFC.

Poseidon said the plant had a capacity of 2.15 million tonnes per annum, compared with the 700,000tpa previously contemplated for its Windarra mine site, which underwent refurbishment in June. 

“The acquisition of Black Swan complements our objective of quickly getting the Mt Windarra project back into production at a much lower capital cost and more than doubles our nickel resource base,” Poseidon managing director and chief executive officer David Singleton said. 

Under the agreement, Poseidon will have the option to either recommission the plant in its current location and transport ore from Windarra, or relocate it at Windarra and save transportation costs. 

Poseidon said the current location had the benefit of being connected to the power grid and a nearby workforce in Kalgoorlie, which would have to be weighed against the cost of trucking ore from Windarra. 

The company has paid a 10 per cent deposit to Norilsk, with the remaining amount to be paid within the next six months.

Poseidon said it would not need to raise additional money for the acquisition.

Poseidon shares last traded at 12 cents per share at 1:30pm. 

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