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
AZG Price at posting:
12.5¢ Sentiment: LT Buy Disclosure: Held
