Nickel sulphide exploration and development company Poseidon Nickel (ASX:POS) reports it is aiming to raise $9 million through a private placement of ordinary shares and a share purchase plan (SPP) to support the restart of operations at the Black Swan Project in Western Australia.
The company says it has received commitments to raise $6 million through a private placement of ordinary shares in Poseidon to clients of Morgans Corporate who acted as lead manager of the placement.
In addition to this placement, Poseidon will also offer existing eligible shareholders the opportunity to participate in a non-underwritten SPP to raise up to $3 million.
Poseidon Managing Director and CEO Peter Harold says: “This placement and SPP will support the company’s strategy to grow our nickel inventory and to ‘Fill the Mill’ at Black Swan as we move to a decision to proceed in Q2 2023 with first production to follow in 2024.
“THIS PLACEMENT AND SPP WILL SUPPORT THE COMPANY’S STRATEGY TO GROW OUR NICKEL INVENTORY AND TO ‘FILL THE MILL’ AT BLACK SWAN”
The funds raised will be used to convert more resources to reserves at Black Swan to expand the mine life, continue with pre-production works, order long lead items, complete the rougher concentrate feasibility study and undertake an extensive drilling program at Lake Johnston targeting Emily Ann style (over 3% Ni) mineralisation.
The company would like to thank our existing and new shareholders who participated in the placement and Morgans for their role as lead manager.”
Poseidon reports commitments received from new and existing institutional, professional and sophisticated investors to raise $6 million thorough the issue of 171.5 million fully paid ordinary shares at an issue price of $0.035 per share, representing an 18.2% discount to the 5 day volume weighted average share price of $0.043, and a 14.6% discount to last closing price before the trading halt of $0.041.
Shares issued under the placement will be issued under the company’s existing placement capacity, and the directors of Poseidon have subscribed for 2,857,143 new shares as part of the placement for $100,000.
In addition to the placement, Poseidon will also offer existing eligible shareholders the opportunity to participate in a non-underwritten SPP to raise around $3 million.
Under the SPP, eligible Poseidon shareholders will have the opportunity to apply for up to $30,000 of new shares without incurring brokerage and other transaction costs.
The company confirms that the record date for participation in the SPP is 30 November 2022, and registered holders of shares at the recorded date with a registered address in Australia and New Zealand will be eligible to participate in the SPP.
The SPP offer period will open on 5 December 2022 and is expected to close at 5pm AEDT on 19 December. The new shares to be issued under the SPP will be issued at $0.035 per share.
Poseidon will be using the funds raised from the placement and the SPP to immediately commence an infill reverse circulation (RC) drilling program from the bottom of the dewatered Black Swan open pit to convert inferred resources to indicated for both the 1.1 million tonnes per annum smelter grade concentrate and the 2.2 million tonnes per annum rougher concentrate projects.
The funds will also be used to commence a 15,000m RC drilling program at Lake Johnston in early 2023 targeting the Western Ultramafic Unit identified by specialised geological consultants NewExco as a ‘high’ priority exploration target.
It will also go towards completing the Black Swan 2.2 million tonnes per annum rougher concentrate feasibility study during the first half of 2023 to potentially support the expansion of operations at Black Swan beyond the recently released smelter grade concentrate project.
Poseidon also notes the funds will go towards reviewing the exploration potential of Windarra by NewExco to identify priority targets for future exploration programs, and for general working capital.
Poseidon Nickel is a nickel sulphide exploration and development company with 3 projects located within 300km from Kalgoorlie in Western Australia including the Windarra, Black Swan and Lake Johnston Nickel Projects.
Images: Poseidon Nickel Ltd