As per POS's release on 25/10 - they have increased the size of...

As per POS's release on 25/10 - they have increased the size of the project - initially targeted throughput of 350,000 - now targeting 700,000. Details below.

Background:
Allmine/NFC currently have the non-binding MOU for construction of the nickel concentrator and associated infrastructure - project size of $35 million.

Allmine was to carry out the concentrator plant optimisation study for the Mt Windarra project which leads to a final price EPC contract. Allmine are to act as local design and installation engineer.

Initial project details
- due for completion November 2012
- new concentrator capacity of 350,000 expandable to 700,000
- expected binding agreement 3rd quarter 2011

Impact of increase in project size:
Poseidon Nickel recently have upgraded one of their key Nickel resources, and this has led to an annoucement on the 25/10 that they they are doubling the production capacity of the project. The target is increased from 350,000 to 700,000. The increase in project scope accounts for the delay in signing a final EPC contract with NFC/Arccon by the 3rd quarter 2011.

Quoting their release as of 25/10 'as a result of these outcomes, Poseidon has now placed an engineering contract to update the design of the concentrator process plant to a nominal throughput of 700,000 tonness per annum' - this will be to NFC/Arccon

So, key points
- project slightly delayed due to upgrade in scope of project
- Arccon will have to undertake some redesign work to now optimise for a 700,000 throughput
- Arccon/NFC project now looking like being a $50-$60 mil project (my guess) rather than a $35 mil project
- updated feasability study due early 2012


Cheers