Poseidon Nickel shareholders have gone all in on the recent share purchase plan, with the company receiving applications totalling $9m – triple the original targeted amount.

Poseidon Nickel (ASX:POS) announced the results of the share purchase plan (SPP) today that demonstrated the strong confidence investors have in the company as it gets closer to making a final investment decision on the Black Swan restart.

The company received applications for up to $9m worth of shares, which significantly exceeded the targeted $3m.

Shareholders were given the opportunity to purchase up to $30,000 worth of additional shares at the same 3.5c offer price new investors were offered in the recent placement.

Poseidon decided to scale back the over subscriptions but will still raise double what it was aiming for.

“We acknowledge that shareholders who subscribed may be disappointed by the scale back, however we have balanced the strong SPP applications with the foreseeable capital needs of the business in the best interests of all shareholders, hence the board’s decision to take $6 million,” managing director Peter Harold told the market today.

This takes the total raised under the combined placement and SPP to $12m.

The strong support follows the release of the highly anticipated bankable feasibility study (BFS) results for the Black Swan project.

“The funds raised by the recent placement and this SPP will support the company with its intended restart at Black Swan with final work streams underway to get to a final investment decision during the second quarter of 2023,” Harold explained.

Funds will be directed towards drilling to convert more resources to reserves, finalising an offtake agreement, securing debt financing, finalising the contractor for the plant refurbishment and mining, advancing final approvals for the restart, and sourcing additional personnel.

“In addition, funds from the placement and SPP will be directed towards the 15,000-metre drill program at Lake Johnston to test the Western Ultramafic priority targets,” Harold added.

Australia’s next nickel sulphide producer

Poseidon is on the fast track to become Australia’s next nickel sulphide producer after recently delivering strong BFS results that demonstrate its Black Swan project in Western Australia can produce a high-grade nickel sulphide concentrate and be a profitable operation.

The study was for a 1.1Mpta mill feed option, but studies are also underway on a larger 2.2Mtpa operation.

The BFS envisages the operation will process 5 million tonnes of feed over four years to produce 200,000 tonnes of high-grade concentrate containing about 30,000 tonnes of nickel.

This scenario is forecast to deliver free cash flows of $333m with a pre-tax net present value of $248m and an internal rate of return of 103% at the current Australian dollar nickel price.

Black Swan can produce a high-grade nickel concentrate with ~15% nickel, less than 6% magnesium oxide (MgO) and an iron to magnesium oxide ratio of 5:1 – which is highly desirable for conventional nickel smelters.

Poseidon has been working with Pure Battery Technologies since mid-last year to investigate the suitability of nickel concentrate from the Black Swan and/or Lake Johnston projects as feed for PBT’s proposed battery material refinery in Kalgoorlie, WA.

Black Swan’s high-quality concentrate has also brought several other end users to Poseidon’s door, with the company receiving indicative offtake terms from several groups.

If a positive final investment decision is made for the Black Swan project in the first half of 2023, concentrate production would start in early 2024 taking advantage of the strong nickel price environment.



This article was developed in collaboration with Poseidon Nickel, a Stockhead advertiser at the time of publishing.


This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.