Poseidon Nickel Ltd (ASX:POS) (OTCMKTS:PSDNF) (FRA:NYG1) is extending the Golden Swan resource drill drive by 50 metres and this is expected to reduce mine development time at the Black Swan Nickel Project in Western Australia.
This decision means the end of the drive will be 50 metres closer to the mineralisation and follows a recent detailed review of the planned underground drilling program at Golden Swan discovery.
It will also provide a better drilling angle for the planned holes and reduce the amount of drilling in the ultramafic (less competent rock).
Drill drive on-track
Poseidon Nickel said mining contractor WestAuz had been doing an excellent job with the drill drive and would continue the drive for a further 50 metres.
The drive is now scheduled for completion in mid-April and the drilling contractor is on-track to mobilise two additional rigs to Black Swan on April 19 with drilling to begin soon after.
“Proactive planning”
Managing director and CEO Peter Harold said: “This change has the benefit of reducing the total drill metres of the resource drilling program by about 1,800 metres so the forecast time to complete the resource drilling program is unchanged and the net cost is almost neutral, with the additional drive development cost being offset by reduced drilling costs.
“This is a lower risk strategy and demonstrates proactive planning by our in-house geology team, site-based personnel and our mining consultants.
“In addition, the drill drive will also be 50 metres closer to the mineralisation which will be beneficial by reducing time to production, assuming we decide to proceed with mine development.”
Resource drilling was awarded to Webdrill and will take around three months to complete with two diamond rigs.
The resource drilling is scheduled to be completed by mid-July 2021 which will allow Poseidon to report the maiden resource for Golden Swan during the September quarter.
Activities to enhance high-grade inventory
Harold continued: “There should be plenty of news flow for the remainder of this year with more exploration drilling and EM surveys within the Southern Terrace, resource drilling at Golden Swan and 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.
“Our internal target is to be mining Golden Swan by mid-2022.”
Poseidon has also re-started exploration drilling of the Southern Terrace in late January from a drill position in the Silver Swan decline.
The aim of this drilling is to test for additional mineralisation below the existing known high-grade nickel sulphide mineralisation at Golden Swan.
Given that the ground conditions have been challenging we now expect the drilling to be at target depth by late March or early April.
Project timetable
Poseidon is confident the Golden Swan Resource drilling will result in the delineation of a maiden resource that will have sufficient tonnage to be exploited in the near term.
Preparations are underway for a recommencement of mining activities in the first half of 2022 with an internal target of producing saleable ore by mid-2022.
The initial plan is to sell DSO and the company has started preliminary discussions with potential buyers in Western Australia.
Golden Swan project timeline.