PERTH (miningweekly.com) – Nickel developer Poseidon will raise up to A$9-million to progress the restart of its Black Swan project, in Western Australia.
The company has received firm commitments for the placement of 171.5-million shares, at a price of A$0.035 each, to raise an initial A$6-million under its existing placement capacity and will undertake a share purchase plan (SPP) to raise a further A$3-million.
The SPP will allow eligible shareholders to subscribe for up to A$30 000 of additional new shares in the company, will open on December 5 and will close on December 19.
“This placement and SPP will support the company’s strategy to grow our nickel inventory and to “fill the mill” at Black Swan as we move to a decision to proceed in the second quarter of 2023 with first production to follow in 2024,” said MD and CEO Peter Harold.
“The funds raised will be used to convert more resources to reserves at Black Swan to expand the mine life, continue with preproduction works, order long lead items, complete the rougher concentrate feasibility study and undertake an extensive drilling program at Lake Johnston targeting Emily Ann style (+3% Ni) mineralisation.”
A feasibility study into the Black Swan nickel project has shown that the 1.1-million-tonne-a-year operation could deliver A$333-million in cash flows. The study estimates that the project will require a capital investment of A$50-million, which includes A$38-million to refurbish the existing Black Swan concentrator.
Based on an ore reserve of 3.5-million tonnes, averaging 1% nickel for 35 000 t of contained nickel, the project is expected to produce 200 000 t of concentrate containing around 30 000 t of nickel over its four-year mine life.
Poseidon on Thursday said that assuming a final investment decision for the Black Swan project was made in the first half of 2023, based on a 1.1-milllion- or 2.2-million-tonne mill feed, concentrate production could start in early 2024, taking advantage of the strong nickel price environment.