Poseidon Nickel Ltd (ASX:POS, OTC:PSDNF) is making strong progress towards a restart of the Black Swan Project in Western Australia, following positive outcomes from a bankable feasibility study (BFS) for a standalone 1.1 million tonnes per annum million feed option to produce smelter grade concentrate.
The company is advancing numerous workstreams as it moves towards a final investment decision (FID), which is on track to be made in the June quarter.
In the field, Poseidon has completed an 11,000-metre reverse circulation (RC) drill program into the Black Swan disseminated resource aimed at increasing the mineral inventory for a potential mine life extension.
At the office, the company received strong interest and has shortlisted a group of potential off-takers who can provide debt finance for the project.
Moving forward, work continues on the expansion project which is based on increasing the mill feed rate from 1.1 million to 2.2 million tonnes per annum and producing a rougher concentrate with a lower nickel grade and higher magnesium oxide content.
Focus on offtake and financing
Poseidon managing director and CEO Peter Harold said: “Our primary focus remains on offtake and project financing work streams, with strong interest having been received.
“The most attractive structure is currently combining offtake and project financing.
“A shortlist of parties have been given access to the data room and are undertaking site visits, as required.
“We are planning to finalise the preferred partner/s early in the second quarter of 2023 and we remain on track to announce the Final Investment Decision for the restart during the second quarter.
“We are also progressing the expansion project study with metallurgical test-work well underway to determine the optimum nickel recovery and grade of nickel in the rougher concentrate.
“The key attraction of the expansion project is that annual production of nickel in concentrate could increase significantly, and the mine life could be extended due to the ability to treat talc carbonate ores which are not included in the current ore reserves.
“The key to unlocking the value of the talc carbonate material is to find a non-conventional smelter customer/s ie, POX, HPAL or pCAM producer for the proposed product which is a main focus of the expansion study.”
Lake Johnston drilling
The Lake Johnston Project remains an important part of the company’s strategy going forward and studies to consider options for restarting this project will begin once the Black Swan Project is in production
POS is planning a reverse circulation (RC) drill program of up to 15,000 metres at the project, scheduled to kick off in early April.
This program is aimed at systematically testing the base of the Western Ultramafic Unit against the underlying Banded Iron Formation (BIF) unit, at regular intervals over its 14 kilometres strike.
The Western Ultramafic Unit is interpreted to represent the extruded portion of the intrusive body hosting the Maggie Hays and Emily Ann deposits that have breached the BIF unit.
Historically, isolated nickel sulphide intersections located along or near the Western Ultramafic basal contact position, have confirmed the fertility of the unit.