The Poseidon Nickel Ltd (ASX: POS) share price was posting big gains today — up as much as 30% as the Australian share market or S&P/ASX 200 (INDEXASX: XJO) was mostly flat.
About Poseidon Nickel
With origins dating back to 1969, Poseidon Nickel is a nickel sulphide resources company with three projects located within 300km of Kalgoorlie in the Goldfields region of WA. These mines are named the Windarra Nickel Project, Black Swan and Lake Johnston.
At a float-adjusted market capitalisation of around $145 million today, the Subiaco-based Poseidon Nickel says it has around $60 million of cash on its balance sheet.
Why Are Shares Jumping Today?
With shares of fellow — but larger — miners like Orocobre Ltd (ASX: ORE) and Galaxy Resources Ltd (ASX: GXY) trending mostly sideways you might be asking why Poseidon shares are up so much today.
It’s important to keep in mind that the company is extremely small and a high-risk business.
That being said, earlier today Poseidon Nickel reported that David Riekie will assume the role of interim CEO of the company following the retirement of Rob Dennis. The company said Riekie had been working closely with the board over the past six months and therefore understands the business and its assets very well.
This comes at a time when Poseidon is hoping to restart operations at the Black Swan/Silver Swan project. The Black Swan deposit was an active open-pit mine but did not reach completion before being put on care and maintenance in 2009.
“David’s appointment will, together with our existing executive team, enable a smooth transition and continuation of our progress toward a restart decision point,” Poseidon Chairman Geoff Brayshaw said.
In a recent update, the company said it would be ready to restart Black Swan in less than nine months and be capable of processing some 8,000 tonnes of nickel per year.
As always we think it’s smart to tread carefully with resources and mining companies — especially small ones.
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Disclosure: The author of this story does not have a financial interest in any of the companies mentioned.
