Poseidon Nickel Ltd (ASX:POS) (OTCMKTS:PSDNF) (FRA:NYG1) has declared a JORC 2012 resource of 62,300 ounces of gold for the Lancefield Gold Tailings Project in the Goldfields region of Western Australia.
Lancefield Gold Tailings Project mineral resource.
Background
The Lancefield Gold Tailings Project is about 8 kilometres northwest of the town of Laverton in the northern Goldfields region of Western Australia.
Lancefield is 17 kilometres by road from Poseidon’s Windarra Gold Tailings Project.
Poseidon purchased an option to acquire the right to treat the Lancefield Gold Tailings in August 2020.
If the option is exercised, Poseidon will enter into a Royalty and Right to Treat Agreement with the licence holder of the Lancefield tailings, granting the company the exclusive right to reprocess the gold tailings from the project.
The Lancefield tailings resource has been generated following a sonic drilling program undertaken during Q4 2020 at the project which complemented a resource definition drilling program completed in 2009.
Definitive feasibility study
The 2020 drilling program comprised 23 holes, 10 of which twinned the previous drilling plus 13 additional holes.
In addition to the 2020 drilling program, an extensive pulp re-assay program was carried out on the rejects from the 2009 drilling.
The Lancefield Gold Tailings will now be incorporated into the definitive feasibility study (DFS) being undertaken on the Windarra North and South Tailings Dams that contain an indicated resource totalling 105,000 ounces of gold.
The DFS is due for completion late next quarter.
Nickel sulphide exploration
Poseidon is a nickel sulphide exploration and development company with three projects within a 300 kilometres radius of Kalgoorlie in the Goldfields region of WA and a resource base of around 400,000 tonnes of nickel and 180,000 ounces of gold (excluding Lancefield Tailings).
Poseidon’s strategy is focused on the exploration and eventual restart of its established nickel operations in Western Australia where project risk capital and operating costs are low.
A critical element of this strategy has been to acquire projects and operations with high levels of geological prospectivity likely to lead to potential substantial extension of the operation’s life through the application of modern exploration techniques.
Poseidon owns the Windarra, Black Swan and the Lake Johnston nickel projects.
In addition to the mines and infrastructure including concentrators at Black Swan and Lake Johnston, these projects have significant exploration opportunities demonstrated by the discovery of the Abi Rose deposit at Lake Johnston and the recent discovery of the Golden Swan mineralisation at Black Swan.
Poseidon is also undertaking a DFS on retreating the gold tailings at Windarra and Lancefield given the strength of the A$ gold price.
$10 million placement
Earlier this month the company received commitments to raise $10 million (before costs) through a private placement of ordinary shares in Poseidon to clients of Morgans Corporate Limited, who acted as sole lead manager of the placement.
Managing director and CEO Peter Harold said: “This placement will provide us with funds to accelerate our exploration activities at Black Swan and aggressively explore the Southern Terrace where we have recently discovered the high-grade Golden Swan massive sulphide nickel mineralisation.
"Funds will be allocated to completing the Golden Swan drill drive, the Golden Swan resource drilling program, further exploratory drilling and EM surveys within the Southern Terrace and resource to reserve conversion drilling of the Silver Swan resource.
"All these activities are aimed at building a sufficient high-grade inventory at Black Swan to allow mining to recommence after a 10-year hiatus.
"We are very excited about the potential of the Southern Terrace and thank Morgans for their assistance with this placement.”