PERTH (miningweekly.com) – Nickel miner Poseidon Nickel has agreed to sell up to 4 000 t of nickel concentrate, valued at A$2.3-million from its Lake Johnston facility to stainless steel producer Tsingshan Iron & Steel.
Poseidon said on Tuesday that the concentrate was stored on site, and had been recovered and used to recommission the filtration circuit at Lake Johnston, in Western Australia.
Shipment of the concentrate was expected before the end of July.
Poseidon added that Tsingshan remained a potential offtake party for concentrate from the Lake Johnston, Windarra and Black Swan facilities.
Earlier this week, Poseidon revealed that the Lake Johnston project would require a capital injection of $10.6-million to restart production. The project was expected to produce some 8 000 t/y of nickel in a smeltable grade concentrate, over an initial mine life of 30 months.
Poseidon acquired the Lake Johnston project from Norilsk Nickel in a A$1-million deal in September last year, after purchasing the Black Swan nickel project from the same company for A$1.5-million earlier in the year. 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.
Underground mining would be undertaken by a contractor, Poseidon said, and tenders for this activity had already been issued.
Ore previously mined and currently stockpiled at the nearby Black Swan operation could also be trucked to Lake Johnston for processing, for a period of up to four years, Poseidon noted.
The feasibility study estimated that all-in sustaining costs would reach $5.39/lb, while C1 cash costs would reach $3.43/lb. Poseidon had estimated a working capital requirement of some A$14-million to restart operations at Lake Johnston.
Poseidon noted this week that start-up activities could take some four months to complete from the point of initiation. All major regulatory approvals were in place to allow for the mine to restart.