Poseidon buys Lake Johnston from Norilsk

Shares in Poseidon Nickel have surged after it announced it had agreed to buy Norilsk Nickel’s Lake Johnston nickel project, located west of Norseman, for an undisclosed amount.

The Lake Johnston project includes the Maggie Hays underground mine and a 1.5 million tonnes per annum concentrator plant.

“The process plant and mine were placed on care and maintenance in April 2013 and have been maintained to a high standard and are in an operational ready condition,” Poseidon said in a statement.

The deal represents Poseidon’s second acquisition of a Norilsk-owned project in two months.

In July, Poseidon bought Norilsk’s Black Swan project near Kalgoorlie, which included ownership of a nickel sulphide plant and an open-pit mine containing 185,800t of nickel.

Poseidon said the Maggie Hays deposit had an estimated mineral resource of 3.8mt of nickel, while the Emily Ann deposit contained 334,000t.

The company said it planned to bring the project back into production as soon as the contract is finalised.

“Poseidon now has three nickel projects all within 270 kilometres of Kalgoorlie,” Poseidon chief executive officer David Singleton said.

“Importantly, all three projects have the mines and access to infrastructure to enable production to be brought on-line quickly and at low levels of capital investment.

“All of the projects are in well-endowed mining regions and have demonstrated resource extension potential which could lead to extended production life.”

Along with the Maggie Hays and Emily Ann deposits, Lake Johnston comprises haul roads and site access roads, on-site waste dumps, crushing, screening and grinding plants, a concentrate production plant, storage sheds and infrastructure, a weighbridge and a fill plant.

The project sits on 11 mining leases, 10 exploration licences and a prospecting licence.

Poseidon said it planned to undertake a new exploration program on the tenements guided by work previously carried out by the project’s previous owner, with the objective of further extending the project’s operational life.

Poseidon’s share price rose by 16.6 per cent to 21 cents per share at 11am.