Poseidon Nickel Ltd (ASX:POS, OTC:PSDNF) says the Black Swan Nickel Project in Western Australia is tracking strongly towards a restart with a resource update and feasibility study progress pointing to the potential to use the maximum available annual plant capacity of 2.2 million tonnes.
The resource update provides a combined underground high-grade and open pit disseminated mineral resource of 29.8 million tonnes at 0.69% nickel for 206,000 tonnes of contained nickel.
Within this, the Black Swan disseminated mineral resource estimate (MRE) now totals 28.9 million tonnes at 0.63% nickel for 181,000 tonnes of nickel metal contained, an uplift of about 10,000 tonnes from the previous estimate.
The updated resource has again improved the confidence in the nickel grade and distribution of the metallurgically important serpentinite and talc-carbonate hosted disseminated mineralisation immediately below the Black Swan open pit.
This increased resource and other developments underpin the opportunity for a study using the maximum available plant capacity.
Suitability of ore types
Preliminary metallurgical test-work shows that concentrates produced from both serpentinite and talc carbonate ore types are suitable for pressure oxidation and refinery feed.
Confirming the distribution of the ore types – and quantifying the talc content – is important, allowing the company to identify mining blocks that will be suitable to produce a smelter-grade concentrate.
The talc-carbonate ore is typically high in talc (magnesium oxide) content, and low in iron-sulphide content, to produce a favourable concentrate feed for conventional smelters.
"Solid progress"
Managing director and CEO Peter Harold said: “Over the past three months the company has achieved solid progress on the Black Swan bankable feasibility study on its 1.1 million-tonne-per-annum base case restart scenario to produce a smelter grade concentrate.
“The recently announced Black Swan Disseminated mineral resource update together with the previously announced high-grade underground resources update means total resources are now just over 206,000 tonnes contained nickel.
“As the quantity and distribution of talc can impact the concentrate quality and nickel recovery, we have undertaken significant metallurgical test-work on the different ore types at Black Swan to determine the most suitable route to market for our nickel concentrate.
Versatile concentrate
"Most importantly the test-work has demonstrated the amenability of concentrate produced from both serpentinite and talc carbonate ore types to pressure oxidation producing a mixed hydroxide precipitate for downstream processing predominantly into the growing battery market.
"This positive outcome supports Poseidon’s continuing discussions with Pure Battery Technologies on supplying feed to their proposed Kalgoorlie refinery/pCAM hub.”
Harold went on to say that the company needs to conduct further feedstock studies to understand the economics of downstream production. It is also obtaining capex and opex estimates to assist in its discussions with potential offtaker Pure Battery Technologies.
“Given the nickel price outlook, the projected demand for either nickel concentrates or MHP/pCAM products and internal preliminary economic assessment of the various restart options, the optionality has placed the company in a unique position," he said.
“Not only will the company continue with the feasibility on the 1.1-million-tonne-per-annum base case restart scenario, we have now included a 2.2-million-tonnes-per-annum throughput scenario in our feasibility studies.
“The latter could unlock long-term value from our large resource base by fully utilising the existing processing capacity to provide feedstocks into the rapidly growing mixed hydroxide/pCAM markets.”
What’s next
The company has conducted an internal preliminary economic assessment, which supports various restart options.
There is continued strong interest from potential offtake parties and financiers for the Black Swan restart, with discussions in progress with Pure Battery Technologies on offtake for its proposed Kalgoorlie refinery.
The company’s investigation of a direct-shipped-ore option revealed sub-optimal economics for the idea, and this has been shelved.