Poseidon Nickel (ASX:POS) has received firm commitments to raise $6 million in a placement at $0.02 per share.
The placement price represents a 23.1% discount to the last closing price and a 23.2% discount to the 5-day volume weighted average trading price to 2 August 2023.
The equity raise is expected to settle on 10 August 2023 with 297.5 million shares to be allotted on or around 11 August.
Director participation of $50,000 (2.5 million shares) will be issued, subject to shareholder approval at Poseidon’s annual general meeting in November 2023.
Petra Capital and Morgans Corporate acted as joint lead managers and joint bookrunners to the placement.
Funds raised will primarily be applied to exploration drilling at both Black Swan and Lake Johnston and further confirmatory metallurgical test work on the open pit disseminated ore for the Black Swan restart. The capital will also be used for various activities relating to the restart including offtake and debt financing negotiations, securing accommodation in Kalgoorlie, completion of the prefeasibility study on the expansion project, remediation work on the Lake Johnston tailings facility (dust management) and care and maintenance costs as we progress towards the Black Swan restart.
Drill rigs have been secured for both the exploration program on Target 5 near the Silver Swan Decline and to obtain drill core for the metallurgical testwork program. Both rigs are scheduled to arrive on site during August.
Poseidon has completed a Bankable Feasibility Study (BFS) on Black Swan in November 2022 which will be the first project to restart. This could be followed by Lake Johnston and then Windarra, subject to favourable Feasibility Studies, appropriate project financing structures being achieved, the outlook for the nickel price remaining positive and all necessary approvals being obtained.
A Definitive Feasibility Study (DFS) on retreating the gold tailings at Windarra and Lancefield was completed in mid-2022. A potential partner for this project is currently conducting due diligence on the Lancefield gold tailings and accessing the water in the South Windarra pit.
Addressing the capital raise, Managing Director and CEO Peter Harold says: “We look forward to drill testing the EM target near the Silver Swan decline and the Western Ultramafic at Lake Johnston and continuing the workstreams relating to the restart of Black Swan.”
“We look forward to drill testing the EM target near the Silver Swan decline and the Western Ultramafic at Lake Johnston and continuing the workstreams relating to the restart of Black Swan”
Poseidon Nickel is a nickel sulphide exploration and development company with three projects located within a radius of 300km from Kalgoorlie in the Goldfields region of Western Australia and a resource base of around 400,000 tonnes of nickel and 180,000 ounces of gold.
The company’s strategy is focused on the exploration and eventual restart of its established nickel operations in Western Australia with the aim of being a +15,000tpa nickel producer. A critical element of this strategy has been to acquire projects and operations with significant existing infrastructure, large nickel resources and geological prospectivity likely to lead to resource growth through the application of modern exploration techniques.
Poseidon owns the Windarra, Black Swan and the Lake Johnston Nickel Projects. In addition to the mines and infrastructure including concentrators at Black Swan and Lake Johnston, these projects have significant exploration opportunities demonstrated by the discovery of the Golden Swan Resource at Black Swan, the Abi Rose and more recently the Maggies Hays West mineralisation at Lake Johnston.
