Contractors let go after Australian nickel project halted
Poseidon Nickel said today that "a number of mining contractors" are being laid off due to the "current shortfall in work across the industry", and that the company is bringing its previously planned six-month drill program to a temporary halt.
The Australian nickel explorer made the announcement in a news release touting a major reserve and resource upgrade at its Mr. Windarra project. The company announced a 121% increase in Probable nickel ore reserves at Mt Windarra. The reserves increased to 498,000 tonnes at 1.78% nickel for 8,850 tonnes of nickel metal.
The company is down 3.85% after announcing the news to 12.5 cents a share. The company has lost 28.6% since the start of the year.
The company's chair Andrew Forrest is trying to raise A$200 million in debt to fund the project so far without success.
As previously announced, the original drill programme was designed for 6 months and has revealed many new features of the Mt Windarra mine not understood before and which have led to the larger than expected resource extension. The programme has now been brought to a temporary halt whilst the data received is reinterpreted with historic data to redesign the next phase of the drilling programme. During this time Poseidon will also review the water extraction system in the mine as the limits of the current system have now been met with the water depth now down near to the bottom of the main vent shaft which has been used to date as the extraction point.
Poseidon has been advised that unfortunately due to the current poor conditions for mining service providers that a number of contractors have chosen to stand down a number of their staff now that the programme is complete. In some cases the contractors have chosen to make redundancies, due to the current shortfall in work across the industry.
The company didn't divulge how many people were being let go.
The company said it was encourage by the results and was planning a follow up exploration program in "due course."