Photo by: Bloomberg
PERTH (miningweekly.com) – Australian nickel miner Poseidon has struck a deal with Russian major Norilsk Nickel to buy the Black Swan nickel operation, in Western Australia, for an undisclosed amount.
The Black Swan project consists of a 2.15-million-tonne-a-year plant and an openpit mine estimated to contain about 185 800 t of nickel.
Poseidon told shareholders on Monday that the company would have the option to either recommission the plant in its current location to process ore from its own Windarra operation, or to move the plant and relocate it to the Windarra site, creating considerable cost savings.
The ASX-listed nickel miner pointed out that the current location had the benefit of being connected to the power grid and a nearby workforce in Kalgoorlie. However, this benefit had to be weighed against the cost of trucking ore from the Windarra site to the current Black Swan plant.
“The acquisition of Black Swan represents a strong opportunity in line with our strategy and complements our objective of quickly getting the Mt Windarra project back into production at a much lower capital cost than previously announced, and more than doubles our nickel resource base,” said Poseidon MD and CEO David Singleton.
Poseidon has been working to refurbish the Mt Windara mine after revealing it was investigating options for toll treating the mine’s ore. It was hoped that the mine could produce between 350 000 t/y and 700 000 t/y, over the first two years of production.
Singleton said that the company was still negotiating the sale of ore from Windarra to another processing plant, with sales anticipated late this calendar year.
While the acquisition price for the Black Swan project remains confidential, Singleton said that the company would not need to raise additional cash to fund the acquisition.
The nickel miner has paid a 10% deposit on the project, with the remainder of the asking price due when the conditions precedent had been satisfied.