Poseidon Nickel chairman Andrew Forrest says the company faces a "serious challenge" to find capital funding for its Mt Windarra project nickel mine, as it reaches a "tipping point" from explorer to producer.
Speaking at the company's annual meeting yesterday, Mr Forrest, who was re-elected chairman for his sixth year in the seat, would not be drawn on the debt-equity ratio expected to meet the estimated $200 million construction costs at the historic site.
Yet despite the flaccid market conditions facing the junior exploration sector, Mr Forrest said he believed it was a good time to find the equity needed as the nickel market had bottomed out. "I think we will be able to muster bank support for the project," he said. "Coming out of the bottom of a cycle is a good spot to be in . . . and this will be a new nickel province in WA"
Originally mined by Western Mining Corporation in the 1970s, Poseidon started its mining regeneration of the area in 2007.
Managing director David Singleton said construction of the nickel mine was expected in the second half of next year with nickel exports by the middle of 2014.
He said this would make Poseidon Australia's first nickel producer in 10 years.
Speaking candidly to shareholders later in the meeting Mr Forrest, dressed casually in jeans, said he was often asked why he continued to support a small exploration company such as Poseidon.
"I think it is important to support these companies at the grass roots," he said.
"Without that endeavour (of finding new discoveries) the mining industry would fade away."The company is expected to work the capital markets early next year after receiving conditional environmental approval from Premier and State Development Minister Colin Barnett earlier this month, dependent on the company finding project funding and signing offtake agreements for nickel before July next year.