✦ Peter Harold, Managing Director of Poseidon Nickel Limited (ASX:POS) has been steadily working towards restarting the Black Swan mining production. He shares recent setbacks and discusses the company's ASX announcement.
The journey of POS has been a mix of highs and lows. However, consider the long-term positive outlook for nickel and positive project development environment in 2024.
Factors for Black Swan Delay
The decision to restart Black Swan has been delayed despite the solid progress made since the delivery of the November 2022 Black Swan BFS. This delay is due to a combination of factors including:
The later availability of grid power;
The need to complete additional metallurgical testwork;
The continuing tightness of the WA labour market;
Ability to secure accommodation in Kalgoorlie for FIFO workers; and
The volatility in global commodity and equity markets.
Poseidon Nickel is looking forward to a positive project development environment in 2024. The main objective is to relaunch Black Swan after addressing the mentioned issues and gaining a more favourable perspective on nickel prices and equity markets.
Listen to Peter Harold here:
00:34 Updates from Poseidon
01:13 Metallurgy - Black Swan Restart
06:58 The global nickel market
10:23 Nickel from an ESG perspective
11:53 The cost effective advantage
17:42 The nickel market
21:44 Grid power not available to late 2024
24:43 Discussion about microgrids
26:12 Extending the mine life
28:26 Discussion about the finances
29:46 Share price performance
32:20 Concluding comments from Tony Goode Samso
Samso, Tony Goode's take on the Poseidon story
The journey of POS has been a mix of highs and lows. While there have been challenges and unfulfilled promises, it's important to assess the company's potential as a nickel producer before making judgments. POS is actively addressing the identified issues and we believe they will transition from an explorer to a miner soon.
Looking at the long-term outlook for nickel, it remains positive, and POS stands out globally among prospective and near-term producers. They have multiple existing nickel assets with varying grades and strong exploration targets. Their infrastructure is valued at over $600 million replacement value.
Currently, the share price is low due to the project delay announcement. However, we believe there is a significant disparity between the market cap of around $90 million and a more reasonable valuation based on the progress towards production, which could potentially reach a market cap of $300 million or more. The low price may make POS an attractive takeover target.
Nevertheless, the delay doesn't change our overall expectations. POS is actively working with partners for offtake and funding. They are also addressing the metallurgical and other issues outlined in their recent announcement. Once resolved, the company will be able to announce a Final Investment Decision, Project Funding, and Offtake Agreements.
As a result, we anticipate that POS will experience a substantial re-rating in the future, presenting trading opportunities for investors.
For a breakdown of Poseidon's business strategy and a deeper analysis of the Poseidon story, join Peter Harold in his Coffee with Samso below.
About Peter Harold
Managing Director and CEO
Peter Harold (B.AppSc (Chem) AFAICD) boasts 30+ years as a seasoned process engineer in the minerals industry. With a background encompassing finance, marketing, business development, and corporate functions, he notably co-founded Panoramic Resources, leading it from a $3 million IPO in 2001 to a remarkable $1.2 billion market capitalization in 2007. Notable achievements include successfully managing the Savannah Nickel Project's financing and development, alongside acquiring and revitalizing the Lanfranchi Nickel Project. His recent efforts involved revitalizing the Savannah Project from care and maintenance to full-scale production. Peter holds extensive expertise in base metal mining across feasibility studies, financing, development, operations, and marketing.
About Poseidon Nickel Limited
Poseidon Nickel Limited (ASX Code: POS) is a prominent nickel sulphide exploration and development firm, managing three projects spanning a 300km radius from Kalgoorlie in Western Australia's Goldfields region. With a resource base of approximately 400,000 tonnes of nickel and 180,000 ounces of gold, Poseidon commands ownership of the Windarra, Black Swan, and Lake Johnston Nickel Projects. These holdings encompass valuable infrastructure, including concentrators at Black Swan and Lake Johnston. Notably, the projects exhibit robust exploration prospects, exemplified by the uncovering of the high-grade Golden Swan resource in 2020 at Black Swan, the Abi Rose deposit at Lake Johnston, and recent nickel findings along Lake Johnston's Western Ultramafic zone.
Contact Poseidon Nickel Limited
Principal & Registered office
Level 1 3 Ord Street West Perth WA 6005
PO Box 190 West Perth WA 6872 Poseidon Nickel Limited
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