Poseidon buys Lake Johnson
Poseidon buys Lake Johnson

Poseidon Nickel has bought the mothballed Lake Johnston nickel mine and processing plant from Russian mining giant Norilsk Nickel for an undisclosed sum.

The purchase of the mine and processing plant site, 115km west of Norseman, comes two months after Andrew Forrest-backed miner picked the mothballed Black Swan mine from Norilsk to jump-start its long-stalled Mt Windarra mine project.

Lake Johnston was put on care and maintenance in April last year after its Russian owners suffered huge losses from continual operational issues and the then weak nickel price.

In a release to the Australian Securities Exchange this morning, Poseidon said Lake Johnston, which includes the Maggie Hays underground mine and 1.5 million tonne per annum concentrator plant, had been maintained to a "high standard" and was in an "operational ready condition".

"Poseidon now has three nickel projects all within 270km of Kalgoorlie," managing director David Singleton said.

"Importantly all three projects have the mines and access to infrastructure to enable production to be brought on-line quickly and at low levels of capital investment.

"All of the projects are in well-endowed mining regions and have demonstrated resource extension potential which could lead to extended production life."

However analysts queried the attractiveness of Lake Johnson when it was placed on the market, with questions surrounding its reserves.

Most industry sources suggested the major factor of interest would be the processing plant, which struggled under Norilsk.

According to Norilsk Nickel Australia's 2012 annual report, its legacy rehabilitation and remediation costs at Lake Johnston alone come to about $60 million.

The West Australian

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