Since commencing as Chairman on 1 December 2019 my focus has been on understanding our asset base and working with the board and executive team to assist in driving the Company’s future strategy.
We have a unique mix of Western Australian nickel sulphide assets which have all had significant historical production and currently host combined resources of close to 400,000 tonnes of contained nickel. In addition, we have two nickel sulphide processing plants, both on care and maintenance and three gold tailings dams at Windarra which contain a sizeable gold resource of around 180,000 ounces.
We recognise shareholders have invested in Poseidon primarily for exposure to nickel and ultimately are seeking a return through share capital appreciation or a dividend stream or hopefully, both. We appreciate the degree of volatility associated with nickel as a commodity and that the economics of any nickel mining project needs to be robust to ensure ongoing profitability. Notwithstanding the historical price volatility, the continued growth in stainless steel production and the electric vehicle revolution will in our view see the demand for nickel continue to rise. This bodes well for the nickel price outlook and therefore our ability to monetise our nickel assets.
The Company has done considerable work in the past few years on studying the economics of restarting the Black Swan Operations and that asset remains our priority in terms of a near term nickel producing asset. Following the success of the drilling at Black Swan in discovering the new high-grade Golden Swan mineralisation, the potential for the Black Swan plant to have another high-grade feed source is becoming increasingly evident. We will continue to focus our exploration activities on Golden Swan and the Southern Terrace given the potential this area has to host multiple, high grade nickel deposits. We will also continue to study the various production scenarios at Black Swan given the multiple ore sources that are available. In addition, we will spend the coming year determining how best to deal with our other nickel assets, being Mt Windarra and Lake Johnston.
Our other focus recently has been on the gold tailing at Windarra on which we have completed a Prefeasibility Study which indicated favourable economics at the current spot gold price. We have committed to a Definitive Feasibility Study which will be completed during the remainder of this calendar year. While gold is not our core metal, we see this as an opportunity to potentially monetise our “gold option”.
We have also been focusing on reducing our cost base and have recently repaid the US$17.5 million convertible note so that we are debt free.
We have had a number of personnel changes at both board and management level. At Board level, Geoff Brayshaw and Karl Paganin retired from the board in June, and Dean Hildebrand and Peter Muccilli joined the board in July and August respectively. On behalf of the Company, can I sincerely thank both Geoff and Karl for their exceptional service and contribution to the Company. Dean and Peter have already proved exceptional directors and I look forward to working with them.
Can I also take this opportunity to formally welcome our new Managing Director and CEO, Peter Harold, who joined the Company in March. Peter’s input and contribution has already been considerable and I look forward to continuing to develop a productive and close working relationship with him. Whilst on the subject of CEO’s I would also like to thank David Riekie who stepped in as interim CEO until Peter was appointed and settled.
Finally, can I take this opportunity to thank you, our valued shareholders, for your continued support. We have all the ingredients needed to create a successful mining business:
- processing plants;
- positive commodity price environment;
- experienced personnel; and
- loyal and supportive shareholders.
We are committed to achieving our vision of becoming a self-funding mining producer and confident we will achieve this. We trust you will remain with us for what will be a very exciting and hopefully very rewarding journey.
Derek La Ferla