Poseidon Nickel Ltd (ASX:POS, OTC:PSDNF) has brought in A$6 million to progress exploration drilling and development activities over its Black Swan and Lake Johnston nickel projects in Western Australia.
Professional and sophisticated investors got in on the raise at A$0.02 per share — a 23.1% discount to Poseidon’s last closing price and a 23.2% discount to the company’s five-day volume-weighted average price.
Cash in hand
With the funding in hand, Poseidon can accelerate towards a project restart at Black Swan, where it intends to conduct metallurgical test-work and complete an expansion-focused pre-feasibility study.
The capital will also support the company’s pre-start endeavours, namely offtake and debt financing negotiations, securing accommodation in Kalgoorlie, remediation work on the Lake Johnston tailings facility and keeping up with care and maintenance costs as it prepares to bring Black Swan back online.
To that end, Poseidon is gearing up for exploration drilling at both WA nickel camps, with two drill rigs set to kick things off with exploration at Target (NYSE:TGT) 5 near the Silver Swan Decline.
Both rigs should arrive on site this month, primed to excavate drill core for Poseidon’s imminent test-work program.
Gearing up for restart
Ahead of the program, managing director and CEO Peter Harold said: “We are pleased with the support for the placement and welcome a number of new institutional investors to the register.
“We look forward to drill testing the electromagnetic target near the Silver Swan decline and the Western Ultramafic at Lake Johnston and continuing the workstreams relating to the restart of Black Swan.”
Following the placement, Poseidon plans to issue 297.5 million shares later this week.
In a vote of confidence in the Black Swan restart, directors have put their hands up to raise a cumulative A$50,000 (equal to 2.5 million shares), although this move is subject to shareholder approval at a general meeting in November this year.
Big picture
The fresh capital will help Poseidon execute its vision to become a +15,000 tonnes per annum nickel producer in WA’s goldfields region, where it’s committed to developing projects with sizeable infrastructure, large nickel resources and geological prospectivity.
Poseidon owns the Windarra, Black Swan and Lake Johnston projects, where discoveries like the Golden Swan resource and nickel hits at Abi Rose and Maggies Hays West point to definitive exploration upside.
The company completed a bankable feasibility study on Black Swan in November 2022, teeing it up as the first project in the restart pipeline.
Depending on market conditions and regulatory hurdles, Black Swan’s restart could be followed by Lake Johnston and then Windarra, subject to favourable feasibility studies and appropriate financing structures at each nickel camp.