Poseidon on track to Black Swan restart with rapidly growing nickel inventory

Poseidon’s continued progress with its ‘Fill the Mill’ strategy at its flagship Black Swan project has the company in pole position for a bigger mining inventory to support the restart of the processing plant.

Poseidon Nickel (ASX:POS) revealed today that progress so far on its ‘Fill the Mill” strategy supports fast tracking several initiatives for the restart of the Black Swan nickel operation in Western Australia.

The news comes just a day after the company reported “exceptionally high-grade” intercepts from drilling into the Tundra-Mute zone within the Silver Swan Channel, which drove shares up over 15% to an intra-day peak of 10.5c before the closed the day out nearly 10% higher at 10c.

That’s because drilling delivered a top hit of 15m at 17.92% nickel from 265m, which included higher grade intercepts again of 2.2m at 19.74% nickel from 270.3m and 1.5m at 21.2% nickel from 277m.

These are very high grades and will “most certainly add tonnes to the resource base at Tundra-Mute”, according to Managing Director Peter Harold.

Today’s news continued the momentum, with shares revisiting the 10.5c peak following a 5% increase in early morning trade.

Poseidon Nickel (ASX:POS) share price chart

The growing mine inventory supports the Black Swan restart strategy based on feeding the 1.1-million-tonne-per-annum (Mtpa) processing circuit from a combination of feed sources to maximise the amount of nickel produced.

The Silver Swan and Golden Swan deposits will provide Poseidon with high-grade nickel that can be blended with the lower grade Black Swan disseminated open pit ore to increase the grade and quality of the concentrate.

Black Swan has a 2.2Mtpa processing plant in good condition, which provides Poseidon with a low-cost and relatively quick restart option.

In early September, a scoping study showed the most economically attractive option for a production restart at Black Swan was to refurbish the 2.2Mtpa processing circuit, derated to 1.1Mtpa and fill that plant to maximise nickel concentrate production.

Poseidon Nickel — Black Swan 2Mtpa processing plant

“The resource drilling programs on the Black Swan Disseminated mineralisation and within the Silver Swan Channel continue to deliver positive results which show potential for an increase in the mining inventory for the restart,” Harold explained.

“In addition, further knowledge of these resources builds our understanding of the mineralogy and metallurgy and will help us refine the ore blending strategy to achieve the optimal concentrate specifications.”

Poseidon has already undertaken sufficient metallurgical testwork, in conjunction with historical plant production data, to provide preliminary concentrate specifications to several potential offtake parties.

And prospective buyers of Poseidon’s nickel concentrate have already expressed interest in concentrate offtake and/or helping fund the Black Swan restart.

These discussions are expected to progress further once the company has defined the mining inventory and finalised the concentrate specifications and production schedule.

Poseidon now plans to fast track various workstreams including further exploration down plunge of the existing Silver Swan resource to grow the high-grade mining inventory, studies on dewatering the Black Swan open pit in 2022, and commencing the environmental and mine approvals process.

“Progress to date on the bankable feasibility study has provided the necessary outputs from our internal preliminary economic assessment to provide comfort for us to commence a number of workstreams to support the Black Swan restart,” Harold said.

Poseidon’s expects to make a final investment decision for the project by mid-next year, with plant commissioning scheduled for the March quarter of 2023.

This article was developed in collaboration with Poseidon Nickel, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.