Poseidon shares rally on ‘very wide’ intersection of massive nickel sulphides at Silver Swan
Poseidon has reported its best hit so far from drilling the Silver Swan Channel, with one intersection showing much thicker massive nickel sulphides than the previously estimated average thickness of the resource.
Drilling by Poseidon Nickel (ASX:POS) into the Tundra-Mute zone within the Silver Swan Channel has intersected 13.6m of massive nickel sulphides – news that sent shares up over 17% on Monday morning.
The true width of this latest intersection is estimated at 9.8m and assays are pending.
“This is the best intersection so far in this drill program and is significant given that the average thickness of the Tundra Mute Inferred Resource was previously about 2 metres,” Managing Director Peter Harold said.
“The aim of this program is to increase the confidence in the resource, by converting existing resources from inferred to indicated and to potentially find high-grade mineralisation outside the current known resources.
“This latest hole will most certainly increase the amount of material in the indicated resource category.”
By upgrading a resource to the indicated category, it means an explorer has sufficient information on geology and grade continuity to support mine planning.
Investors welcomed the news, driving shares up to an early trading high of 11c on Monday morning.
Poseidon is drilling at Silver Swan to not only increase the confidence in the resource but also to potentially find high-grade mineralisation outside the current resource.
The company has drilled 18 holes so far in the current program.
“We are still planning to drill at least two deeper EM holes and look forward to seeing whether the EM surveys detect any EM plates beyond the current extent of the known mineralisation,” Harold explained.
Silver Swan has previously delivered some impressive high grades like 1.55m at 12.98% nickel, including 1.05m at 15.67% nickel.
The Silver Swan and Golden Swan deposits 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 2.2-million-tonne-per-annum 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 is on track to deliver a bankable feasibility study in the middle of 2022, having delivered a maiden resource for Golden Swan in late October and with the significant results returned so far from infill drilling in and around the Tundra-Mute resource at Silver Swan.
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.