Entering text into the input field will update the search result below

Poseidon Nickel's Ore Reserves Jump 121% At Mt Windarra

Jul. 11, 2013 3:11 AM ET
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Short Only

Seeking Alpha Analyst Since 2009

Proactiveinvestors is a leading multi-media news organisation, investor portal and events management business with offices in New York, Sydney, Toronto, Frankfurt and London. Proactiveinvestors operates five financial websites in four languages providing breaking news, comment and analysis on hundreds of listed companies across the globe daily. We are one of the fastest growing financial media portals in the world. The group also operates hugely successful “investor forums” where three or four companies present to an audience of high net sophisticated investors, fund managers, hedge funds, private client brokers and analysts. Ian Mclelland founded Proactiveinvestors in 2006 as a way to channel his own views on companies small and mid-cap public companies. What started as a hobby quickly turned into a full time job as the website's readership exploded. One2One forums were added later in 2006, and within two years the company had expanded its operations into Canada and Australia. In 2009 the company expanded into Germany and finally into the US in 2010. Proactiveinvestors is now one of the fastest growing global financial media organizations in the world receiving more than one million visitors per month, with investor forums held across the globe on a regular basis.

Poseidon Nickel's (ASX: POS) 121% increase in Probable nickel ore reserves at Mt Windarra will have positive repercussions for cash flow and payback in the early life of the mine, with the company focused on returning the historic Mt Windarra mine to production.

Poseidon will be the only new nickel sulphide producer ready to meet expected supply shortfalls in 2014/2015.

Mt Windarra's Reserves increased to 498,000 tonnes at 1.78% nickel for 8,850 tonnes of nickel metal, with Resources up 17% to 80,200 tonnes of nickel metal.

The much higher reserve grade is now more in line with the historical mine performance.

Importantly the project is located close to existing mining infrastructure which could increase project production with minimal extra capital cost, and is located 260 kilometres north-east of Kalgoorlie in Western Australia.

David Singleton, CEO and managing director, commented: "We're extremely pleased to have added substantially more nickel to our mine plan, which will have positive repercussions for cash flow and payback in the early life of the mine.

"These results build on our track record of solid resource growth, which has been at an average annual rate of 24% in nickel tonnage terms since 2007."

There is also plenty of potential Reserve and Resource upside from within the existing Mt Windarra orebody and from new, adjacent, drill targets.

Highlighting this potential (which are not included in today's upgrade) are results which are all true widths such as:

- 17.53 metres at 3.52% nickel, including 5.1 metres at 7.1% nickel;
- 10.5 metres at 4.36% nickel; and
- 8.68% metres at 2.36% nickel.

Poseidon will look to commence a new drilling program at later stage following review and planning, which will build on the original six-month program from December 2012.

Poseidon targets production ahead of nickel shortfall

Poseidon is continuing to work towards bringing Mt Windarra back into production ahead of a widely expected medium term shortfall in nickel supply.

In regards to finance, Singleton added: "We are continuing discussions around project finance with a number of parties and will update the market with developments in that area as soon as practicable."

Most successful intersection to date

A short period of follow-up drilling at Mt Windarra has returned the most successful intersection to date.

Drill hole WUG0046 was drilled to intersect D Shoot and continue through to test a gap off the northern edge of C Shoot in order to extend the known mineralisation.

It intersected all four mineralised shoots and returned some of the best grades and true widths seen to date including: 8.28 metres (true width 5.08 metres) at 7.10% nickel.

Drilling intersected high grade massive nickel sulphide in D Shoot with individual assays up to 12.01% nickel. It also extended C Shoot by 30 metres to the north and returned individual assays of up to 10.4% nickel.

Drill hole WUG0046 also intersected F Shoot 45 metres below and 33 metres south of existing F Shoot drilling with individual assays up to 13.32% nickel. It also clipped the southern edge of G Shoot confirming its position.


Drilling results suggest there is further upside in resource and reserves within the Mt Windarra orebody.

There is also upside in from new, adjacent, drill targets. This would be positive for future cash flows for the project and payback period.

That the company is in continuing discussions for project finance with a number of parties is positive in a tough funding environment.

The defining benefits of Mt Windarra is that it's a generally a low risk project, while being low in complexity - while be close to all important infrastructure.

A DFS has completed with highlights including production of 9,600 tonnes contained nickel plus 45,000 ounces of gold in three years. All required approvals in place.

The average C1 cost is US$3.35/lb over the initial 10 year life of mine, and therefore the project is also in a strong competitive position due to being in the second quartile cash cost position, with low capital intensity to catch any shortfall in nickel supply.

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.