Poseidon gains state government approval for Mt Windarra

THE BOURSE WHISPERER: Poseidon Nickel (ASX: POS) has received the nod of conditional approval from Western Australia Premier Colin Barnett to recommence nickel mining at the Mt Windarra site in the North Eastern Goldfields of Western Australia.

The application included all of the necessary environmental and infrastructure approvals, which Poseidon indicated have been assessed by the Department of State Development and other agencies over the last few months.

The company’s proposal for the recommencement of nickel mining and processing operations at the Mt Windarra site includes:

–    Recommencement of nickel mining at the Mt Windarra underground mine;

–    Commencement of nickel mining at the new Cerberus ore body located on the same tenement package;

–    Construction of a nickel flotation concentrator plant capable of a minimum throughput of 700,000 tonnes of ore per annum;

–    Construction of a gold tailings re-treatment facility; and

–    Installation of in-pit tailings deposition via a slurry pipeline to South Windarra.

The Windarra nickel project is located on tenements managed under the Poseidon Nickel Agreement of 1971, which requires that in addition to the normal statutory approvals, Poseidon is to supply reasonable evidence of its marketing (offtake) and project financing necessary for the fulfilment of its proposals.

The final formal approval is subject to Poseidon demonstrating it has project financing and offtake contracts in place.

Premier Barnett, in his role as Minister for State Development, has given Poseidon until 30 June 2013 to meet these financing and offtake commitments.

Under a Deed of Covenant associated with the Agreement, Poseidon was also required to submit a revised Mine Closure Plan to DSD.

This has been submitted, as required, and approved in similar terms to the mining proposal.

“This is an enormously important and successful outcome for Poseidon as it essentially gives statutory approval for the project subject only to final financing and offtake,” Poseidon Nickel managing director and chief executive officer David Singleton said in the company’s announcement to the Australian Securities Exchange.

“This announcement clears the environmental and construction approval risk for the project prior to financing, and as a result we maintain an expectation of nickel mining restarting in this area of the Goldfields.

“We recently announced the completion of the Definitive Feasibility Study for the project and as announced previously are continuing our preparations for financing the project.”

Poseidon Nickel described the Windarra project as a higher-grade nickel sulphide deposit that has demonstrated high recovery levels through a standard nickel floatation concentrator.

The total current Mineral Resource is located at two positions approximately 10 kilometres apart and includes the existing brownfields mine at Mt Windarra and a new discovery at Cerberus.

Poseidon has completed a Definitive Feasibility Study (DFS) and is targeting initial concentrate production in 2014.

The concentrator plant to be constructed at Mt Windarra is expected to have a minimum throughput capacity of 700,000 tonnes of ore per annum.