Poseidon Nickel has agreed to acquire Norilsk Nickel's Lake Johnston nickel mines and associated infrastructure in Western Australia for A$1 million. The Lake Johnston property encompasses the Maggie Hays and Emily Ann underground mines and a concentrator and has been on care and maintenance since April 2013. Poseidon's acquisition of the property is in addition to its purchase of the Black Swan nickel mine from Norilsk, announced on July 7, (E&MJ, August 2014, p. 16). Black Swan is also in Western Australia.

The Lake Johnston sulphide flotation concentrator has throughput capacity of 1.5 million mt/y and historically has produced 12,000 mt/y of nickel in concentrate. The project includes an estimated mineral resource of 70,500 mt of nickel contained in ore grading 1.7% nickel at Emily Ann. Poseidon currently anticipates bringing the property back into production shortly after closing of the purchase transaction.

The Lake Johnston property includes a series of 11 mining leases, 10 exploration licenses, and one prospecting license. Poseidon considers the area to have significant exploration potential. Only limited exploration drilling has taken place in recent years, but several highly prospective areas have been identified. Poseidon plans to undertake a major new exploration program guided by the work undertaken to date, with the objective of further extending the project’s operating life.

Poseidon Managing Director and CEO David Singleton said, “Poseidon now has three nickel projects all within 270 km of Kalgoorlie. All of the projects are in well-endowed mining regions and have demonstrated resource extension potential that could lead to extended production life.”

Sale of the Lake Johnston property completes Norilsk’s divestment of its former operating assets in Australia.

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