POSEIDON NICKEL LIMITED - ASX: POS

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Description

Poseidon Nickel Limited is based in Perth, Western Australia. Poseidon is a mineral exploration company which is listed on the Securities Exchange and holds exploration interest in nickel. Poseidon's main activities are towards the exploration and development of nickel mineralisation in Mt Windarra 260km NNE of Kalgoorlie. Windarra consists of two leases, and one main lease covering a total area of 70 square kilometres.

Windarra Nickel Project

The Windarra Nickel Project is a historical mine site which, over an 18 year period (1973-1991), mined some 8 million tonnes of nickel ore grading 1.55%, which, after processing resulted in the shipment of 1 million tonnes of nickel concentrate grading 10%. Poseidon is now refurbishing this Project and believes it can be developed into a significant and profitable operation.

The history of the project can be summarised by an extract from the 1973 description of operation: “The Windarra Nickel Project resulted from the discovery of a nickel gossan by Mr. Ken Shirley, a prospector with Poseidon Nickel (then N.L.) in April 1969.

Exploration by Poseidon Limited indicated ore reserves at Mount Windarra sufficient to commence planning and development for a nickel operation to produce nickel concentrates. Subsequently, a second orebody was discovered by the Union-Hanna-Homestake Consortium 13 kilometres south of Mount Windarra.

Poseidon Limited and Western Mining Corporation Limited has formed a joint venture to exploit both orebodies. Production of concentrates is planned to commence in the latter half of 1974. Underground development has commenced at the Mount Windarra mine and over 1400 metres of underground development has been completed. Planning is in hand for the development of an open pit mine at South Windarra. Stripping is due to commence in mid 1973.

Modern facilities already established at Mount Windarra include Windarra Village, housing both married and single personnel, a powerhouse and an office-workshop-store complex.

The major facilities still to be erected are a concentrator and extensions to the power station.

It is planned that Laverton, 22.5 kilometres south-east of Windarra, will be developed to house the personnel working at the mines. This development is being planned jointly by the Laverton Shire, the Western Australian Government and Poseidon Limited.

A sealed road will be built from Windarra to Malcolm and the rail link between Kalgoorlie and Leonora will be upgraded to standard gauge.”

The Windarra mining operations were operated by Western Mining Corporation Holdings Ltd (Western Mining Resources Ltd) (WMC) until the early 1990’s when due to low nickel prices mining ceased and the project closed.

In 2004, following approval in principle from the Minister for State Development, Niagara Mining Limited (Niagara) commenced negotiations with WMC Resources Ltd for the sale of the Windarra assets. Following the successful completion of commercial negotiations, the Minister for State Development approved a Deed of Assignment whereby WMC Resources Ltd assigned all of its rights and obligations under the State Agreement to Niagara.

Niagara changed its name to Poseidon Nickel Limited in early July 2007 and restructured with the appointment of a new board and management team. The new team, under Andrew Forrest’s leadership, accelerated the exploration of the property, refurbishment of the underground mine and recommissioning of existing infrastructure. However, in September 2008, the GCF resulted in the Project being placed on care and maintenance.

Poseidon is continuing its strategy to develop a nickel mining and processing operation capable of contained nickel metal production of in excess of 10,000 tonnes per annum (tpa) at Windarra.

The strategy involves the mining and processing of nickel sulphide ore from the Company’s ore resources to produce a saleable nickel concentrate. It includes the continued refurbishment of the Mt Windarra mine to exploit the inferred nickel resources at depth, the development of the newly discovered Cerberus deposit and exploration of the Windarra lease and Poseidon’s adjoining leases.

To progress this strategy, the approvals processes including those for the refurbishment of the underground mine, licenses for dewatering and water discharge and on-going exploration have been completed.

To date Poseidon has defined 102,528 tonnes of JORC code compliant nickel sulphide resources at the Windarra Nickel Project. This comprises of 66,962 tonnes of contained nickel at Mt Windarra adjacent and below the existing underground infrastructure and, in addition, a maiden 25,269 tonne nickel resource at the newly discovered Cerberus deposit and 10,298 tonnes of contained nickel at South Windarra.

Approximately 1,000 metres of the Mt Windarra main decline has been successfully refurbished and the mine has been dewatered to a vertical depth of 165m. The site existing infrastructure has been maintained in an operational ready status during the care and maintenance period.

Geophysical exploration and drilling has now recommenced in a number of areas which are considered highly prospective and further drilling is planned to expand the Cerberus deposit.

Mine For

gold, nickel

Location of operation(s)

Western Australia

Address

Unit 8, Churchill Court, 331-335 Hay St
SUBIACO, WA, AUSTRALIA

Phone

08 9382 8799

Email

Website

http://www.poseidon-nickel.com.au

Last Updated

21/02/2010