Name of the Project
Black Swan nickel operations restart project.

Location
Kalgoorlie, Western Australia.

Project Owner/s
Poseidon Nickel.

Project Description
A bankable feasibility study (BFS) has proven positive.

The BFS is based on mining ore from the Black Swan disseminated openpit (serpentinite ore only), and Silver Swan and Golden Swan high-grade underground mines, supplemented with Silver Swan tailings and existing surface stockpiles (disseminated serpentinite material), and processing these feed sources through the existing concentrator and associated infrastructure.

Black Swan can produce a high-grade nickel concentrate with an estimated 15% nickel, 6% magnesium oxide and an iron:magnesium oxide ratio of 5:1, which is highly desirable for conventional nickel smelters.

The BFS envisages the refurbishment and operation of the existing plant with a processing capacity of 1.1-million tonnes a year to align with the available processing mine inventory of five-million tonnes, presenting an after-development project life of four years. Over the life of the project, Phase 1 will produce 200 000 t of smelter-grade concentrate, averaging 15% nickel containing an estimated 30 000 t of nickel from the various feed sources, representing an average metal recovery of 68%.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at an 8% discount rate, of $248-million and an internal rate of return of 103% at the current Australian dollar nickel price.

Capital Expenditure
Existing infrastructure means a low pre-production capital expenditure of about $50-million, compared with that of a greenfield operation, which includes $38-million for refurbishment of the Black Swan concentrator.

Planned Start /End Date
If a final investment decision is made during first half 2023, concentrate production could start in early 2024.

Latest Developments
Poseidon Nickel has postponed the restart of its Black Swan project, citing project-related factors and external market conditions.

A final investment decision on restarting the project had initially been targeted for late in the first half of 2023, but Poseidon told shareholders on July 17 that Western Power had advised that grid power would be available only from late 2024.

Further, the company has determined from the recent confirmatory drilling and updated resource model that further metallurgical testwork is required to confirm the recoveries used in the feasibility study for the disseminated openpit ore. These project-related factors, together with the continuing tightness in the Western Australian labour market, the lack of available fly-in, fly-out accommodation in Kalgoorlie, and the increased volatility in global commodity and equity markets, have resulted in the deferral of the final investment decision.

“In the meantime, we will continue to add value for shareholders by completing the Black Swan expansion project prefeasibility study and undertake further exploration drilling . . . targeting high-grade mineralisation,” Poseidon MD and CEO Peter Harold has said.

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
Poseidon Nickel, tel +618 6167 6600, fax +618 6167 6649 or email admin@poseidon-nickel.com.au.