Poseidon Nickel (ASX: POS) has identified significant cost savings as part of a targeted strategy focusing on the pathway to production, targeted exploration, and business development.
The company has made significant progress towards the restart of its Black Swan operations with the confirmation of the metallurgical recoveries one of the key items outstanding. Poseidon has made the decision to defer the Black Swan restart until all outstanding items are resolved and the nickel price environment and equity markets improve.
To scale back corporate overheads and Black Swan site operating costs, proactive initiatives will be implemented including executive and board transitions, such as; Peter Harold will transition from managing director and CEO to non-executive chair, Craig Jones, Poseidon’s current general manager mining, will transition to CEO, Derek La Ferla and Dean Hildebrand will retire from the board.
A revised operating model will be implemented to materially reduce care and maintenance costs including changes at the corporate and site, which will save approximately C$3M annually. Exploration activities will be primarily at Lake Johnston along Western Ultramafic Unit, non-core asset rationalization and other cost reduction strategies will be considered.
Managing director and CEO, Peter Harold, commented: “While we have made significant progress on project financing, concentrate quality and offtake, approvals and planning in relation to the Black Swan restart as previously advised, we are not in a position to make the final investment decision for a number of reasons including the current weaker than anticipated nickel price, the short-term outlook for commodity prices, and the need to complete additional metallurgical test work.
“Since the decision was made, in mid-July 2023, to defer the restart, the board and executive team has been looking at ways to reduce costs in the business both at the corporate and asset levels. To that end, some major personnel changes will be made, including myself, to significantly reduce the corporate overhead while preserving the knowledge base of the company.”
“In addition, we have revised the care and maintenance operating model at Black Swan which will result in a material reduction in annual operating costs without impacting the restart timetable for the mine and processing plant when a decision to restart is made.”
“Our aim is to ensure costs are reduced while at the same time putting Poseidon in the best position for the restart. Combined cost reductions from these initiatives total approximately C$3M on an annualized basis. I would like to take this opportunity to thank Derek and Dean for their efforts and dedication since they joined the company.”
I would also like to thank Craig for his commitment to the company and for stepping up into the CEO role. I am passionate about Poseidon, its assets and its people and will transition from my current role to non-executive chair. I look forward to assisting Craig and the executive team over this transition period. Our primary focus remains to restart Black Swan in the right nickel price environment. Our immediate priorities are to confirm the metallurgical recoveries for the smelter grade concentrate project, complete the expansion project prefeasibility study, continue exploration activities at Lake Johnston along the highly prospective Western Ultramafic Unit and keep reviewing our assets and costs and make further adjustments where necessary.”
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