The dewatering and refurbishment programme has been extended. The primary objective is to complete refurbishment to the underground crusher chamber at approximately 450 metres below ground level. From this level, we will be able to undertake additional resource drilling to extend the Windarra reserve. This work had not initially been contemplated until after final funding but has been brought forward to improve the funding potential of the project further.

Poseidon’s approval process requires submission of the Mining & Environmental documents through the Department of State Development (DSD) of the West Australian Government. This is an enhanced approval process dictated by the fact that Poseidon’s tenements are covered by West Australian “State Act” licenses. Poseidon intends to submit all proposals in 3 parts for the Mt Windarra proposal, Cerberus proposal and Tailings disposal and gold proposal. These proposals have all been under consideration for some months and we are not aware of any objections.

Poseidon is completing its Definitive Feasibility Study (DFS) for the Windarra Nickel Project. This includes the reopening of the existing Mt Windarra underground mine, the development of the new Cerberus underground mine, a new concentrator plant with the associated infrastructure and a tailings disposal facility. The concentrator plant for nickel will have a 700,000 tonne per annum throughput capacity and produce a nickel sulphide concentrate. The DFS will be the key document used to raise the appropriate funds to build the project. The DFS was completed in February 2012. Falling nickel prices from March 2012 onwards meant that as previously announced, final project funding was postponed and the time used to update and develop the DFS to further improve its bankability. The final DFS was completed in October 2012 and will undergo review by an independent technical expert.

The Rights Issue is extended to all Shareholders of Poseidon at the registration date in Australia and New Zealand. The details of this issue are contained in the Entitlement Issue Prospectus and a link for this is contained on the Home Page of this website.

Poseidon is targeting Government approvals in May 2012. These will be the final major approvals required before making a commitment to build the infrastructure. Poseidon has not yet received finalisation of these approvals, however, we understand that there are no material outstanding impediments raised by the various Government departments and that approval will be received shortly, although we have no indicative date.

Poseidon has appointed Behre Dolbear of Queensland to undertake an Independent Technical Review of the projects Definitive Feasibility Study. The initial review was undertaken in May 2012 and was subsequently used to inform the Banks arranging debt finance. The review provided greater assurance that the DFS has fully covered all of the issues necessary to restart the Windarra Nickel Project.

Poseidon has now secured, through its fully underwritten Rights Issue with Shareholders, a $20m equity funding package. For several months, Poseidon has been working with a number of international Banks to develop the optimum debt funding package to finance the construction of the process plant onsite, together with the development of the mines at Mt Windarra and Cerberus. We believe that funding in early 2013 is possible.

Poseidon announced earlier this year that it intended to bring forward drilling work from underground at Windarra that was initially intended to be undertaken only after final funding. The decline refurbishment has progressed to the point where a suitable drilling position close to the ore body is accessible and allows reserve drilling not economic from the surface. Poseidon intends to use the well tested Wassara drilling system developed and used in Scandinavia but not yet in use in Australia. The system promises much higher drill rates and therefore conversion of indicated and inferred resources to reserves.