Poseidon Nickel Limited (ASX: POS) has announced the successful issuance of 297,500,000 fully paid ordinary shares, as part of a placement aimed at raising AUD $6 million before costs. The shares were priced at AUD $0.02 per share, according to the firm’s announcement dated 7th August 2023.
Legally, the shares were issued without investor disclosure under Part 6D.2 of the Corporations Act, in compliance with section 708A(5)(e) of the Act. As of the date of the announcement, Poseidon confirmed that it was fully compliant with all relevant provisions of the Corporations Act, including Chapter 2M, and had no undisclosed “excluded information.”
Today, the share price stands at AUD $0.021, marking a 4.55% decline from its previous close of AUD $0.022. Trading volume reached 4,175,954 shares, compared to a four-week average volume of 8,580,205, with a turnover of AUD $91,057. The day’s range was between AUD $0.021 and AUD $0.022, with a Volume-Weighted Average Price (VWAP) of AUD $0.022.
This significant development comes amid challenging times for the nickel market. Peter Harold, Managing Director of Poseidon Nickel, discussed the intricacies of developing a nickel project during an interview with Sonia Madigan for The Market Herald at the Kalgoorlie Diggers & Dealers Mining Forum earlier in August.
Harold underscored the critical role nickel plays in Electric Vehicle (EV) batteries. “The number is six times more nickel than lithium in every EV. The biggest number is graphite; it’s about 60 kilograms, and then it’s 30 kilograms of nickel and about 6 kilograms of lithium. So it should be called a nickel-lithium hydride battery,” said Harold.
However, Poseidon is facing market headwinds. A year ago, the nickel market was robust with prices hovering around $12 a pound. “It’s now $9.50, so it’s dropped quite a bit, now nearly 30 percent,” Harold noted. While the downward trend in nickel prices has led to global struggles in production, Harold remains bullish on the medium to long-term outlook for the metal, especially with growing demand in sectors like EV manufacturing.
Originally, Poseidon had hoped to start production by this time next year. But given market conditions, Harold mentioned that “it’s probably gone out at least six months. So we’re probably talking production into early 25 now. And that should be at a time when the nickel price is a lot stronger than it is today.”
Additionally, Poseidon is strategically placed in Western Australia, focusing on three Brownfields projects, primarily Black Swan, a project that Harold personally worked on during his younger years. The other assets, Lake Johnston and Windara, have also been historically significant nickel producers.
These Brownfield projects place Poseidon in a pivotal position, especially with recent market movements like Wyloo’s takeover of Mincor. Harold remarked that Poseidon’s assets have “a lot of optionality” and believes that “people will start to realise their strategic value.”
As Poseidon navigates the challenges of fluctuating nickel prices and production delays, today’s share placement could be viewed as a strategic move to solidify its footing in an ever-changing landscape. The outcome will not only be keenly observed by shareholders concerned about the recent dip in share price but also by industry experts looking to gauge the future of nickel, a metal silently shaping the future of sustainable transport.
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Poseidon Nickel issued 297,500,000 shares, raising AUD $6mn at AUD $0.02 per share, amid challenging #nickel market conditions. CEO Peter Harold remains optimistic about nickel's long-term relevance, especially in the growing #EV market. #TheIndianSunhttps://t.co/sP1gwyHuOS
— The Indian Sun (@The_Indian_Sun) August 29, 2023
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