This article is 16 years old. Images might not display.
Perth-based Poseidon gained 19c to hit an intraday high of 93c in morning trade on news United States fund manager Harbinger Capital will invest $50 million in Poseidon by subscribing to an issue of convertible notes.
The funds will be used to develop the feasibility study for the Windarra project, to complete the mine rehabilitation works and to continue its exploration and resource development program.
The convertible notes will be priced at a 25% premium to the company's closing price yesterday of 74c.
Poseidon's managing director David Singleton said the investment represented a milestone in the company's development and a major vote of confidence in both the company and Windarra's potential.
"The terms of the convertible notes are, in my opinion, very advantageous to shareholders and reflect the faith vested in the company and its management," he said.
Singleton said Harbinger's close relationship with Poseidon's chairman Andrew Forrest was a key element in securing the agreement.
Harbinger holds a 15.8% stake in Fortescue Metals Group, of which Forrest is chief executive, and a 19.98% stake in Murchison Metals, which is currently vying with Sinosteel for control of fellow iron ore play Midwest Corporation.
Recently, Poseidon announced a 35% increase in JORC-compliant indicated and inferred resources at Windarra to 60,370 tonnes of contained nickel and began refurbishment of the Windarra decline.
The company is progressing studies into a major nickel mining operation at Windarra capable of producing around 20,000t of nickel per annum.
Shares in Poseidon have cooled to 88c in late morning trade.
