Poseidon Nickel Confirms Viability of Lake Johnston Restart

Poseidon Nickel Ltd. (ASX:POS) announced that it’s completed a bankable feasibility study for its Lake Johnston nickel project. It confirms that the operation can be brought back online within a few months with a low level of capital investment and no regulatory or technical barriers.

As quoted in the press release:

Lake Johnston was in full scale operations only 2 years ago so the purpose of the study was to confirm the necessary steps required to restart mining and processing and to confirm the required capital and operating costs. The study also presented Poseidon with the opportunity to plan a number of operating improvements to the site primarily to reduce costs and to improve ore extraction rates.

The study was initiated immediately after the project was acquired in November 2014 and included a major re-analysis of the resource model, a re-design of the mining methodologies used for the ore body and an analysis of the necessary work required to restart the concentrator plant. The resource model work, combined with the revised mining methods, has materially increased the initial project life and ore throughput rates.

Highlights of the study include:

• Production of 8,000 tonnes of nickel per annum in a smeltable grade concentrate
• All in sustaining cost of production of US$5.39/lb payable equivalent to a C1 cash cost of US$3.43/lb
• Prestart capital cost of US$10.6m (A$14m) including plant and mine refurbishment, general restart costs, plus working capital of circa A$14m
• Initial mine life of 30 months with a number of promising resource extensions to be developed
• Ore previously mined and currently stockpiled at Black Swan can be trucked to Lake Johnston for processing for a period of up to 4 years. Combined mill feed will average 1.13 million tonnes per annum compared to process plant capacity of 1.5 million tonnes per annum

Click here to read the full Poseidon Nickel Ltd. (ASX:POS) press release.