Poseidon announced today that it had raised $A3.7 million for pre-production activities at the site via the placement of 46.7 million shares at 8c per share.

This follows a $3.8 million raising in late February amid speculation the company was seeking $US197 million ($A212 million) to develop the project while needing at least $9 million to repay a loan from Forrest.

Forrest resigned from the Poseidon board in September to allow more time for philanthropic activities, but retained a 31.7% stake in the company.

The purpose of the placement was to speed up the restart of Mt Windarra through dewatering and refurbishments planned to begin immediately.

The final refurbishment program to reach the known orebody will cost about $4 million and can be completed over a four to six month period.

This investment is part of the restart costs of $11 million, previously estimated, with remaining capital associated with increasing mine ventilation, initial mine activities and working capital.

“Poseidon remains in active discussions with various parties to determine the best processing option for its nickel ore between treatment at an existing established facility or by building a new plant at the Mt Windarra site,” the company said today.

“Whie ore transport costs to third part mills will increase the operating costs of the mine, this will be offset by the considerable time delays and capital costs of a new build plant.

“In light of this and the current strength of the nickel market, Poseidon believes that an early start to production is in the best interests of shareholders.”

Nickel was last trading at about $US18,245 per tonne.

In April 2013, a definitive feasibility study outlined Mt Windarra as a 9600 tonnes per annum operation with a net present value of $546 million over a 10-year life.

Poseidon said it expected the complex to deliver a total of $US1.8 billion in earnings before interest, tax, depreciation and amortisation in its first decade and initially estimated pre-start capital costs at $A197 million.

The most recent placement was capped by the company’s remaining placement capacity and followed the issue of about 802,400 shares over the March quarter in lieu of December and January salary to a senior employee.

In February, the company announced it had identified potential concentrate offtake arrangements that would allow it to toll treat ore to a concentrate within a reasonable trucking distance.

Shares in Poseidon were last trading 9.5% down at A8.6c.