2013 DFS Supports Low Cost, Long Life Nickel Operation, page-15

Hi Diesel

I have picked $3.35lb apart recently and personally believe that the cash cost is slightly elevated compare to the original DFS say between $4 to $5 base on:

Highlights
Expected average annual production of 9,600 tonnes of contained nickel in concentrate at an average operating cost of US$3.35/lb over initial 10 year life of mine (net of gold credits)

Additional gold processing facility estimated to produce over 45,000 ounces of gold in the first 3 years

Foot note item no 5 and 6

5 The Average Operating Cost is an average over the 10 year period of the financial model and stated on a C1 basis which includes mining, flotation concentration, transport, sea freight, administration, royalties (to State and BHPB) and gold credits but excludes smelting and refining charges.

6 Mining Cost (Operating) per tonne is the average operating cost of mining for Mt Windarra and Cerberus over the LOM based on sub-level caving and longitudinal sub-level caving methods respectively. This excludes mine development costs which are capital costs.

My opinion is that smelting and refining charges need to be added to that cost, then less gold credit of 15,000 ounces pa. Item no 6 stated excludes mine development costs which are capital costs and therefore no add back for the saving as it is not included in the first place.

May he high 3 and early 4 is the all in cash cost. Petra had 5 which is a sizable buffer and will be very profitable.

Good news is there is gold but not too sure how much it will cost to build a processing plant.

"In addition to the nickel ore, the project includes a 4.36 million tonne gold tailings reserve in the North and South tailings dams which will be reprocessed through a standard CIL plant to be constructed adjacent to the nickel sulphide concentrator facility."

Ni recovery will be at 83%

"The nickel ore treatment process plant has been designed to treat 900,000 tpa while production is planned to ramp up to 720,000 tpa, producing around 85,000 tpa of nickel concentrate at a grade of circa 12% nickel, with an overall forecast nickel recovery in excess of 83%."

Just to rub it in
"Poseidon’s Managing Director, Mr DS, said the Company’s objective was to immediately move to finance completion, construction and production."