Update: Poseidon Nickel Releases The Updated Maggie Hayes Resource Estimate

| About: Poseidon Nickel (PSDNF)
This article is now exclusive for PRO subscribers.

Summary

Poseidon Nickel has updated the Maggie Hayes resource estimate at the Lake Johnston project.

The result is quite decent considering this resource estimate was completed quite fast and it excludes several other zones and new data.

I’m waiting to see an economic study on Lake Johnston, but I’m not expecting bad news as it’s a past producing mine.

Poseidon Nickel (OTC:PSDNF) has shifted its attempts to bring three past-producing nickel mines into the fifth gear and has now released a resource estimate at Maggie Hayes which is compliant with the 2012 JORC code. Maggie Hayes is one of the mineralized zones at the Lake Johnston project, which was acquired by the company less than 4 weeks ago. Poseidon Nickel had to update the resource estimate as the historical estimate wasn't allowed to be used by the regulator.

The Maggie Hayes underground mine now contains 3.8 million tonnes at an average grade of 1.41% nickel for a total nickel content of 53,100 tonnes (almost 117 million pounds) with an in-situ value of roughly $850M. The resources are evenly spread between the indicated and inferred category, so the level of confidence is already relatively high given the fact that an indicated resource estimate could already be compiled. This is just a first estimate and Poseidon says that it has identified additional data, which hasn't been included in this resource estimate yet. This obviously means that it's very likely the resources at Lake Johnston will be expanded even further as this first estimate was only based on Maggie Hayes and ignored the Emily Ann zone as well. Poseidon probably wanted to have a JORC-compliant resource estimate rather quickly and an update should obviously not be expected before 2015.

Maggie Hayes will be the first part of Lake Johnston to restart production, and this should be quite cheap given the fact that the mine was only placed on care and maintenance in April of last year. Poseidon Nickel should have its feasibility study on Lake Johnston ready within a few weeks, and I'm expecting a low initial capital expenditure and a competitive cost per pound of nickel (around $5-5.5 would be in line with my expectations).

Disclosure: The author is long PSDNF.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.