Australian exploration company Poseidon Nickel is set to reopen the historic Windarra nickel mine following a feasibility study that demonstrated viability of the project through low capital and mining costs.
The Windarra mine, located in Western Australia, triggered a nickel boom in the 1970s before the mine was closed due to dipping prices.
The company plans to invest $197m in the project, which is expected to meet the estimated supply deficits in 2014/2015.
Poseidon Nickel chairman Andrew Forrest said, "The DFS confirms a strong future for Poseidon as a low cost producer of nickel in Australia with a mine life potentially well beyond a decade."
Poseidon Nickel managing director David Singleton said that the company aims to immediately move to finance completion, construction and production.
"We are in the fortunate position of expecting to have two-thirds of the required capital items secured in signed contracts by the time financing is completed," Singleton said.
According to a Definitive Feasibility Study (DFS), the mine is estimated to have an average annual production of 9,600t of contained nickel in concentrate at an average operating cost of $3.35/lb during an initial ten-year period.
The DFS proposes the development of the existing brownfields Mt Windarra underground mine, the neighboring greenfields Cerberus underground mine, a nickel sulphide concentrator facility and a retreatment plant.
The project will also involve the development of a gold production facility at the site, which is projected to produce 45,000oz of gold in the initial three-year period.
Poseidon Nickel has appointed international investment bank Credit Suisse to support the development of various alternatives towards financing the Windarra Nickel Project.
Image: Windarra Nickel Project is expected to meet the estimated supply deficits in 2014/2015. Photo: Poseidon Nickel Limited.