PERTH (miningweekly.com) – ASX-listed Poseidon Nickel has received a conditional proposal from Perth-based Black Mountain Metals.
Poseidon told shareholders on Friday that while no formal bid price per share has been offered or agreed upon, Black Mountain has made an informal proposal of 6c a share
The company said that as there was no formal proposal, it was not certain that a formal proposal would be forthcoming, but noted that discussions between the two parties were continuing.
In addition to the execution of a definitive bid implementation agreement, the proposal was also subject to Black Mountain being granted due diligence access and completing its review within three weeks, as well as no material adverse changes in respect of Poseidon.
Poseidon on Friday told shareholders not to take any action, with the company’s board intending to seek further information to evaluate the proposal.
Poseidon has three near operational projects in Western Australia, and is currently drilling for lithium resources.
A recent feasibility confirmed the restart of the Silver Swan openpit mine and processing plan at the Black Swan operation would be economic, and could generate revenues of A$288.6-million and a pre-tax net present value of A$43.6-million.
The feasibility study estimated production of some 8 000 t/y of nickel in a smeltable grade concentrate from the Black Swan process plant, and direct shipping ore from Silver Swan.
The project is expected to require a capital investment of A$56.7-million, including plant and mines refurbishment.
Poseidon on Friday said that the company was in advanced process staged of a planned and significant equity raising, which was still considered a viable alternative transaction to the Black Mountain deal, but noted that the proposal from Black Mountain will still be assessed.