Poseidon gets started on Windarra�s latest adventure
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Thursday, 20 March 2008
WITH the official start of mine refurbishment at the historic Mount Windarra mine in Western Australia yesterday, Poseidon Nickel is hoping to get the project up and running again as quickly as possible. But complicating matters for the nickel hopeful is a potential 50,000 tonnes of contained nickel oxides, alongside the project�s nickel sulphide resources. Kate Haycock reports from the mine�s official re-opening.
Poseidon has yet to release a JORC resource for the oxides � which are contained in tailings and some other near-surface material � and the company�s chief executive David Singleton was careful to tell stockbrokers, analysts and journalists visiting Windarra yesterday that the 50,000 tonnes is a target only.
However, should the oxidised resource prove to contain as much metal as the company hopes it does, it will provide additional support for the company's re-start plans.
Poseidon has already defined a 4.17 million tonne inferred and indicated resource at the project, grading 1.45% nickel for 60,370t contained nickel, around the historical workings at Mount Windarra.
With 100,000t contained metal from both the oxides and the sulphides, Poseidon will have the stuff in the ground needed to underpin an expansion beyond its initial target of 300,000 tonnes per annum production throughput.
Singleton said the oxides would also require different processing from sulphides, and this could have ramifications for the processing plant needed for the project.
The oxides could be recovered via acid or heap leaching, which would be an additional capital expense and an additional stage on top of the process required for the sulphides.
Singleton said the company has not yet decided what course of action to take with the nickel oxides.
But with 50,000t contained nickel worth more than $1 billion at today�s nickel prices, the company has appointed ex-Minara strategic development manager Michael Rodriguez as technology manager to look at the best options for the Mount Windarra project.
Rodriguez�s expertise in nickel processing would also be integral if the company decides to install an electro-winning plant at the Windarra project.
Poseidon does not have an offtake deal for the nickel it plans to mine, and while some could see this as a disadvantage, Singleton sees this as an advantage.
Last year Singleton flagged the company�s belief that it could process its ore to nickel metal stage via an electro-winning plant, and gain a significant premium for the product over other nickel miners in WA which sell their concentrate directly to BHP Billiton, Norilsk Nickel or Chinese company Jinchuan Nickel.
�We want to take as much profit from Windarra�s in-ground resources we can,� Singleton said.
Taking the nickel to metal stage would be expensive, however, despite the potential increase to the company�s profit margins. With current volatile markets, even finding the money to get a mine up and running is hard enough.
But Singleton was confident the company would be able to find the cash, reminding visitors to the site that the company�s non-executive, Andrew Forrest, has ways of getting projects off the ground.
But for now the company has only just begun to dewater and refurbish the decline, a process that should take around nine months.
Meanwhile, the company is also trying to prove up the exploration prospectivity of the area around the site of the first nickel boom in the 1970s.
Regardless of the its nickel metal plans, the pressure will be on Poseidon to make good its promise of bringing Windarra out of the dustbin of history.
Shares in Poseidon gained 3c to 61c yesterday and were steady this morning -----------
Smoke me a kipper, I'll be back for breakfast!
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