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Poseidon, no reserves, on a run again
Email Printer friendly version Normal font Large font October 11, 2007

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From a pulp mill in Tasmania to Western Australia, where there's a Forrest in the news.

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Last time Poseidon Nickel shares went for an unexplained run, the company soon afterwards released drilling results and a news of a marketing agreement with Fortescue Metals. This was followed by three queries from the stock exchange in the space of a week - along with a visit from the corporate plod.

This time around, new Poseidon chief executive David Singleton reckons the explanation is a little simpler: he's spent the week selling his company's story to the Sydney broking community.

Poseidon shares soared 39c, or 43 per cent, to close at $1.30 yesterday on extremely high volumes, but it's understood the company doesn't expect to report any news in the near term.

Having been party to Singleton's pitch, Xchange knows Poseidon is touting the vision of its chairman, Andrew "Twiggy" Forrest, to produce 25,000 tonnes to 30,000 tonnes of nickel a year from two or three mines. Some day.

In the meantime, it's focused on the more modest goal of producing 4000 to 5000 tonnes of nickel a year from a 300,000 tonne a year mill from the end of next year. After it proves up a reserve, of course.

Poseidon will also look at the economics of building a plant to turn its concentrate into nickel metal without the help of a bigger partner like BHP Billiton.

And, for the time being, Singleton says, acquisitions are pretty much off the agenda.