UPDATE 2.50pm: Shares in Poseidon Nickel fell after the company announced a discounted placement of shares to raise $3.7 million.
Poseidon said the money would be used for further dewatering and final refurbishment of its historic Mt Windarra nickel mine ahead of a return to production.
The Andrew Forrest-chaired company said its placement of 46.7 million new shares at eight cents each closed heavily oversubscribed.
Poseidon said it was in discussions with various parties to determine the best processing option for its nickel ore between treatment at an existing established facility or by building a new plant.
"Whilst ore transport costs to third party mills will increase the operating costs of the mine, this will be offset by the considerable time delays and capital costs of a new build plant," the company said.
"In light of this and the current strength of the nickel market, Poseidon believes that an early start to production is in the best interests of shareholders."
Poseidon said the final refurbishment program to reach the known ore body would cost approximately $4 million and could be completed over four to six months.
"This investment is part of the restart costs of $11 million, previously estimated, with remaining capital associated with increasing mine ventilation suitable for mining, initial mine activities and working capital," the company said.
Shares in the company fell 1.4 cents, or 14.74 per cent, to close at 8.1 cents after emerging from a trading halt this morning.