Poseidon Nickel Limited : Final Documentation for Approvals now Submitted to DSD

20th January 2012
Company Announcements Officer
ASX Limited
Exchange Centre
Level 4, 20 Bridge Street
SYDNEY NSW 2000
Dear Sir

Re: WINDARRA NICKEL PROJECT FINAL DOCUMENTATION FOR APPROVALS NOW SUBMITTED TO DEPARTMENT OF STATE DEVELOPMENT IN WA

We enclose herewith a copy of an announcement in relation to the above. Yours faithfully

David P.A. Singleton MANAGING DIRECTOR & CHIEF EXECUTIVE OFFICER

Enc

CORPORATE DIRECTORY Principal Office

Unit 8, Churchill Court Director / Senior Management 331-335 Hay Street David Singleton Managing Director & Chief Executive Officer SUBIACO WA 6008

Andrew Forrest Non-Executive Chairman P: 61 8 9382 8799

Geoff Brayshaw Non-Executive Director F: 61 8 9382 4760

Richard Monti Non-Executive Director

Chris Indermaur Non-Executive Director Registered Office

Ross Kestel Company Secretary Level 2, Spectrum

100 Railway Road

Corporate Enquiries SUBIACO WA 6008

Mr David Singleton - MD & CEO P: 61 8 9367 8133

P: 61 8 9382 8799 F: 61 8 9367 8812

F: 61 8 9382 4760

Media Enquiries

E: [e-mail] Mr Paul Downie

FT Consulting

P: 61 8 9386 1233 M: 0414 947 129

Shareholder Enquiries E: [e-mail]

Enquiries concerning shareholdings should be addressed to:

Home Exchange

Computershare Investor Securities The Company's shares are listed

GPO Box D182, Perth WA 6840 on the Australian Securities Exchange

P: 61 8 9323 2000 and the home exchange is Perth

ASX code: POS

POSEIDON N I CKEL LIM I T E D • Unit 8 • Churchill Court • 331-335 Hay Street • Subiaco • WA 6008

PO Box 190 • West Perth WA 6872 • T [phone] • F [phone] • www.poseidon-nickel.com.au • ABN 60 060 525 206

Page 2

ASX Announcement 20th January 2012

Windarra Nickel Project final documentation for approvals now submitted to Department of State Development in WA

• Poseidon has now submitted all of the necessary Windarra Nickel Project Mining Proposals and Works Approvals to the Department of State Development

• Proposal outlines plans for approximately 700,000 tonne per annum production from Mt Windarra and Cerberus combined

• Approvals are expected in March 2012

Poseidon Nickel (Poseidon) is pleased to announce that it has submitted detailed Mining Proposals and Works Approvals for the Windarra Nickel Project to the Western Australian Government in order to seek approval to both restart mining operations and to build a processing plant on the site. The Mt Windarra proposal was submitted in November 2011 and the remaining project proposals including Cerberus, co-product treatment and tailings disposal have now been submitted. No further mining proposals are required prior to operational start up.
The proposal includes mining up to 700,000 tonnes of ore per annum from both Mt Windarra and Cerberus combined with an initial mine life of six years. The Windarra Project has a resource base of 9.2 million tonnes of ore at an average nickel grade of 1.51%.
Poseidon plan to build a 700,000 tonne capacity nickel sulphide concentrator to process ore from Mt Windarra and from the Cerberus mine. The indicated construction time for the plant and associated infrastructure is approximately 12 months and will be built largely inside the footprint of the historical plant. The size of the plant selected provides good economies of scale and processing costs are likely to be in line with other nickel peer producers in Western Australia.
The Mining Proposal application includes the following major infrastructure:

• Existing underground mine, ventilation shafts, access portal and underground crusher chamber.

• Refurbishment of existing vertical haulage shaft to reduce decline haulage costs.

• Flotation concentrator plant including power plant and water.

• Accommodation camp, use of exiting administration buildings, workshops and lay down areas.

• Development of the Cerberus underground access portal.

• Tailings storage facilities.

• Co-product treatment facilities.

The development proposals have been submitted to the Western Australian Department of State Development in compliance with the 'Poseidon Nickel Agreement Act 1971,' the associated Variation Agreement and Deed of Covenant. The Act envisages a response by the Government within two months of the final Application being submitted.

Page 3

Poseidon Nickel is developing the Windarra Nickel Project in Western Australia. The project is a higher grade nickel sulphide deposit that has demonstrated high recovery levels through a standard nickel floatation concentrator. The total current Mineral Resource is located at two positions approximately 10kms apart and includes the existing brownfields mine at Mt Windarra and a new discovery at Cerberus. Poseidon is on track to complete its definitive feasibility study in early 2012 and is targeting initial concentrate production in
2013. The concentrator plant to be constructed at Mt Windarra is expected to have a nameplate capacity of 700,000 tonnes of ore per annum.

Windarra Nickel Project Sulphides		Cut Off Grade	Resource Category
Windarra Nickel Project Sulphides		Cut Off Grade
Windarra Nickel Project Sulphides		Cut Off Grade	Indicated	Inferred	TOTAL
Windarra Nickel Project Sulphides		Cut Off Grade	Tonnes	Ni% Grade	Ni Metal t	Tonnes	Ni% Grade	Ni Metal t	Tonnes	Ni% Grade	Ni Metal t
Mt Windarra		0.75%	910,000	1.24	11,300	2,955,000	1.72	50,900	3,865,000	1.61	62,200
South Windarra		0.80%	771,665	0.98	7,533	-	-	-	771,665	0.98	7,533
Cerberus		0.75%	2,773,041	1.25	34,637	1,777,743	1.91	33,996	4,550,784	1.51	68,633
Total Sulphide			4,454,706	1.20	53,470	4,732,743	1.79	84,896	9,187,449	1.51	138,366

Note: The information in this report relates to Exploration Results and Mineral Resources based on information compiled by Mr N Hutchison, General Manager of Geology at Poseidon Nickel, who is a Member of The Australian Institute of Geoscientists and Mr I Glacken who is a Fellow of the Australasian Institute of Mining and Metallurgy as well as a full time employee of Optiro Pty Ltd. Mr Hutchison and Mr Glacken both have sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2004 Edition of the

'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.' Mr Hutchison and Mr Glacken have consented to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The Australian Securities Exchange has not reviewed and does not accept responsibility for the accuracy or adequacy of this release.