Forrestania Resources (ASX: FRS) confirmed execution of the formal sale agreement with Poseidon Nickel for its Lake Johnston Project on 31 December 2025. The binding document satisfies a critical condition in the $35 million acquisition, positioning Forrestania closer to securing Western Australia’s significant processing infrastructure.
The deal has moved beyond the heads of agreement stage into formal documentation. Completion hinges on shareholder approval at a meeting scheduled for 12 January 2026.
Payment Structure Shifts as Deal Progresses
The original payment terms received an amendment. Forrestania has completed an $8 million payment to Poseidon Nickel Pty Ltd, a wholly owned subsidiary of Horizon Minerals (ASX: HRZ).
The remaining consideration breaks down as follows:
- $20 million cash payment at completion
- $5 million worth of Forrestania shares at completion
This revised structure differs from the initial heads of agreement signed in November 2025, which outlined phased payments including a $2 million deposit and $14 million at formal agreement execution.
Poseidon Nickel acquired the Lake Johnston assets through Horizon Minerals’ $30 million merger with the former Poseidon Nickel Limited earlier in 2025.
Lake Johnston Project Location
Gold Conversion Plans Take Shape with Contractor Engagement
Forrestania has engaged five specialist contractors for early involvement in converting Lake Johnston’s processing facility from nickel to gold operations.
MBS Environmental brings 23 years of global environmental consulting expertise. The Perth-based firm will handle environmental approvals and work packages across the site.
OTOC Australia secured the non-process infrastructure contract. The company specialises in critical support infrastructure and remote area accommodation solutions.
Polaris Engineering will lead process plant engineering. The heavy engineering business offers turnkey packages for minerals processing facilities.
RG Mining Consulting takes responsibility for study management, geology, mine planning, mine optimisation, mine scheduling and project execution planning. The firm holds expertise across base metals, precious metals and critical minerals sectors.
PwC (PricewaterhouseCoopers) rounds out the team with cost modelling, financial analysis, and CAPEX/OPEX estimation and evaluation.
Executive Chairman David Geraghty stated: “This acquisition represents a transformational step for FRS. FRS is delighted with key Early Contractor Involvement partners who have been selected to advance the Lake Johnston processing infrastructure to ensure our Company is capable of moving swiftly from explorer to near term gold producer.”
Lake Johnston’s Strategic Assets and Location
The Lake Johnston Project sits approximately 190 kilometres southwest of Kalgoorlie in Western Australia’s goldfields region. The site contains two historical underground nickel sulphide mines, Emily Ann and Maggie Hays.
Infrastructure includes:
- 5 million tonnes per annum processing plant
- 200-person accommodation village
- Airstrip for fly-in-fly-out operations
- 42 hectares of tailings storage facilities
- Workshops and offices
- Site access and haulage roads
- Crushing, screening and grinding facilities
- Five megawatt power supply
The Emily Anne processing facility operated as a conventional nickel sulphide flotation plant. Previous operations produced concentrate with low arsenic levels and approximately 13.5 percent smeltable quality nickel. A substantial refurbishment occurred in 2011.
LionOre Mining International originally developed the operation in 2001. Production expanded in 2003 from 250,000 tonnes to 1.2 million tonnes annually. Russian mining company Norilsk Nickel acquired the project in 2007, placing it on care and maintenance in April 2013 due to falling nickel prices.
Regional Context and Development Potential
The Lake Johnston Project lies within the Lake Johnston greenstone belt, a northwest trending structure extending approximately 35 kilometres with a maximum width of eight kilometres. The region sits in the southern portion of the Southern Cross Province between the Lake Johnston greenstone belt and main Forrestania greenstones of the Archaean Yilgarn Craton.
Forrestania’s existing gold assets in the Southern Cross, Forrestania and Eastern Goldfields regions position the company to feed ore into the Lake Johnston facility once conversion completes.
The Emily Ann Mine historically produced 46,000 tonnes of nickel with a resource grade averaging 4.1 percent nickel. About 1.5 million tonnes of ore passed through the plant between 1998 and 2007 at an average grade of 3.8 percent nickel, delivering 57,000 contained tonnes of nickel in concentrate.
A resource of 52,000 tonnes nickel averaging 1.49 percent remains at Maggie Hays.
What This Means for Horizon Minerals
Horizon Minerals views the divestment as strategically positive. Managing Director Grant Haywood commented: “Lake Johnston was acquired through the ~$30 million merger with Poseidon and is considered a non-core asset, with our focus on the refurbishment and restart of the Black Swan processing facility to be fed with Horizon’s 100%-owned gold resources.”
The proceeds strengthen Horizon’s balance sheet to advance the Black Swan processing facility and surrounding gold projects. Horizon completed a pre-feasibility study for Black Swan in December 2025 and recently acquired the nearby Gordons Dam Project.
Horizon shareholders retain exposure to Lake Johnston’s future success through their $5 million equity stake in Forrestania.
Gold Market Backdrop Supports Development Timeline
Gold prices remain elevated, trading above $3,300 per ounce as of late December 2025. The precious metal has climbed approximately 48 percent over the past year, driven by geopolitical tensions and economic uncertainty.
This macroeconomic environment enhances the economic case for Forrestania’s gold-focused strategy and the Lake Johnston conversion project.
Australia’s gold sector continues attracting significant investment due to the country’s rich mineral endowment and stable regulatory framework. Western Australia hosts several of the world’s largest gold producers.
Shareholder Meeting and Completion Timeline
Forrestania shareholders will vote on the transaction at a meeting on 12 January 2026. The company expects completion shortly after shareholder approval, assuming all other conditions are satisfied.
These conditions include receiving necessary regulatory approvals, third-party consents including governmental consent for tenement transfers, and execution of all necessary deeds of assignment for asset transfer.
The company previously raised capital to fund the acquisition, demonstrating strong investor support for the strategy.
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Market Performance and Outlook
As of 31st December 2025, Forrestania Resources shares traded at $0.3, within a 52-week range of $0.008 – $0.320. The stock has delivered returns exceeding 1,500 percent year-to-date, substantially outperforming the ASX 200 index.
Market capitalisation sits at approximately $107.8 million with 469 million shares on issue.
The company’s strategy centres on transitioning from explorer to near-term gold producer through the Lake Johnston acquisition combined with resource development across its project portfolio.
Kula Gold (ASX: KG1) welcomed Forrestania’s acquisition in November 2025. Forrestania holds a 76 percent stake in Kula following an off-market takeover offer declared unconditional in late December 2025.
The Lake Johnston processing plant sits approximately 135 kilometres from Kula’s Mt Palmer Gold Project, potentially providing processing solutions for multiple projects in the Southern Cross goldfields.
This consolidation strategy aligns with Forrestania’s stated objective of achieving gold production in calendar year 2026.
