PERTH (miningweekly.com) – ASX-listed nickel miner Poseidon Nickel on Tuesday announced that its Lake Johnston project, in Western Australia, would require a capital injection of some A$8.3-million to restart operations.
Poseidon acquired the Lake Johnston project from Norilsk Nickel in a A$1-million deal in September this year, after purchasing the Black Swan nickel project from the same company for A$1.5-million in July. Both projects included mine and concentrator plant infrastructure, as well as proven resources.
The Lake Johnston project included a modern 1.5-million tonne a year treatment plant as well as large ground position, and the project had been in production until April 2013, at which time it went into care-and-maintenance.
Poseidon was in the midst of a restart bankable feasibility study for the Lake Johnston project, and recently announced a re-estimated mineral resource of 3.8-million tonnes, grading 1.41% nickel for 53 100 t of contained nickel at the Maggie Hays mine.
“Lake Johnston has an exciting resource potential with several zones of greater than 4% nickel in the mineralised resource. The quality of the existing infrastructure is excellent and, as a result, production could be restarted very quickly,” said Poseidon MD and CEO David Singleton.
Poseidon was targeting a restart rate of some 900 000 t/y, meaning that the processing plant would not require any modification. Operating costs for the operation have been projected at A$6.70/lb.
However, Singleton noted that there were clear options to improve the mining methodologies and approach to reduce cost and improve nickel recovery, adding that the company would now work on this area during the first quarter of next year.
It was anticipated that the Lake Johnston restart would be funded by a combination of existing cash, sales revenue from Poseidon’s Windarra project, and some potential debt for working capital purposes.
The company has also entered into offtake negotiations for the Lake Johnston nickel, which were now well advanced.