28/01/2014 - 14:33

Poseidon working on funding deal

28/01/2014 - 14:33

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Poseidon Nickel has suspended its shares from trading on the ASX as it works to secure funding to support the construction of its Windarra project.

Poseidon working on funding deal
Poseidon Nickel chief executive David Singleton.

Poseidon Nickel has suspended its shares from trading on the ASX as it works to secure funding to support the construction of its Windarra project.

Poseidon said today it hoped to make an announcement relating to a potential capital raising by next Friday, pending the conclusion of discussions and signing of term sheets.

The nickel explorer was prompted to enter a trading halt when it received a speeding ticket from the ASX last Wednesday after its shares closed the day's trade more than 26 per cent higher.

In response to questions from the regulator, Poseidon said it was in the midst of discussions with potential investors and stakeholders but that any funding proposals were not sufficiently complete to warrant disclosure.

Poseidon said in its most recent quarterly report that it had completed all necessary activities at the Windarra project prior to construction, including the completion of a definitive feasibility study, independent reports and permits.

The company had hoped last year to finance construction through debt capital markets in the US but was constrained by the US Federal Reserve's decision to taper its quantitative easing program, which coincided with the nickel spot price reaching near 10-year average lows.

It noted last week that several global investment banks had indicated a strengthening market position for nickel, driven by Indonesia's ban of unprocessed nickel ore.

Poseidon shares last traded at 10.5 cents.

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