Poseidon Nickel (ASX:POS) eyeing production in early 2025

Sonia Madigan:

Welcome to From the Floor at the Kalgoorlie Diggers & Dealers Mining Forum.

Now this year lithium has been on everyone’s lips, but the fact is you actually need more nickel in an EV than lithium. Now focused on that is Peter Harold, he is the MD of Poseidon Nickel (POS). Tell us the figures, Peter.

Peter Harold:

Thanks, Sonia. So basically the number is six times more nickel than lithium in every EV.
The biggest number is graphite, it’s about I think 60 kilograms, and then it’s 30 kilograms
of nickel and about 6 kilograms of lithium. So it should be called a nickel-lithium hydride battery.

Sonia Madigan:

So is it tough then developing a nickel project?

Peter Harold:

Yeah, look, especially in this nickel-price environment. You had a 12 months ago, the nickel price was looking fantastic. When we did our feasibility study, we used $12 a pound. It’s now $9.50, so it’s dropped quite a bit, now nearly 30 per cent.

At that price, pretty much all the nickel in the world is probably marginal on a full-cost basis. So everyone’s struggling in the production. I think what’s happened is the focus, as you said before, everyone’s into lithium and rare earths and a bit of iron ore, and so nickel’s sort of a little bit struggling at the moment, and yet the outlook in terms of demand is fantastic.

So notwithstanding, there’s a lot of Indonesian production that’s come through probably quicker than people expected, and demand’s a bit slower. So we’re a very bullish nickel medium to longer term.

And so we’re talking about being in production, we were hoping, probably, this time next year, but it’s probably gone out at least six months.

So we’re probably talking production into early 25 now. And that should be at a time when the nickel price is a lot stronger than it is today.

Sonia Madigan:

Now you’re working in Western Australia and actually in a Brownfields development?

Peter Harold:

So we’ve got three Brownfields projects. The primary one is Black Swan, Which, believe it or not, I worked on when I was in my 20s, back in the mid to late 90s when it was first developed.

And then I’ve circled back around again 25 years, nearly 30 years later. Makes me feel old. And basically, yeah, we’re trying to get Black Swan going again.

There’s a processing plant there, that can do about 2.2 million tonnes a year. Last operated in, I think, 2009 by the Russians. When the nickel price collapsed, they pulled out. We picked it up very cheaply for a couple of million dollars. And we’ve just been waiting for the right time in the nickel price cycle to get going again.

We’ve got Lake Johnston, which is the other side of Kalgoorlie, that’s got a one-and-a-half million-tonne plant as well with an ore body and we’ve got Windara.

So we’ve got three historically big producing assets. Black Swan did 180,000 tonnes of nickel, Windara did about 80,000 tonnes and I think Lake Johnston did another 100,000.

So they’ve all been big producers in their own right. And now very strategic assets, especially given that Wyloo’s just taken over Mincor. So Cassini, all that ore currently goes down to the Cambalda to concentrate and that contract runs out at the end of 2025.

So one option for Luca and his team would be to build their own concentrator. Another option would be for them to sell material on a longer-term contract to BHP or they could come up to Black Swan.

It’s only about 140Ks and we’d happily have them in the concentrator. So there’s a lot of optionality there I think you know going forward our assets people will start to
realise that strategic value.