Poseidon Nickel Ltd (ASX:POS) enjoyed a productive December quarter, achieving several milestones including commencement of the Golden Swan drill drive at its Black Swan Project in Western Australia, which once completed, will allow resource drilling.
This progress is encouraging as the company aggressively moves towards its goal of beginning nickel production in 2022.
Managing director and CEO Peter Harold said: “On the back of the successful Golden Swan discovery, the strong nickel price and buoyant equity markets, the company raised $10 million via a placement through Morgans Corporate Limited, increasing our cash position to $20 million at December 31.
“The placement has provided the company with the necessary funds to accelerate our exploration activities at Black Swan and aggressively explore the Southern Terrace, which hosts the high-grade Golden Swan discovery.
“Funds from the placement have been allocated to completing the Golden Swan drill drive, the Golden Swan resource drilling program, further exploratory drilling and EM surveys within the Southern Terrace and resource to reserve conversion drilling of the Silver Swan resource.”
Golden Swan exploration
Harold said: “The successful installation of the underground electromagnetic fixed loop provided high-quality DHEM results on the existing Golden Swan EM conductors and further EM surveys identified new EM anomalies, extending the footprint of Golden Swan DHEM plates.
“In addition, two EM anomalies were identified in the footwall of the Southern Terrace, indicating the potential for mineralisation to be hosted outside the existing Golden Swan zone.
“A third intersection, 50 metres up plunge from the previous two intersections confirmed high-grade nickel sulphides in the newly identified upper extension of the Golden Swan mineralised zone.
“The three intersections to date demonstrate the significance of the Golden Swan discovery.”
Promising metallurgical test-work
Additionally, preliminary metallurgical test-work has indicated that Golden Swan could produce a high-grade nickel concentrate with low impurities which would be very attractive to nickel smelters globally.
The metallurgical test-work returned results including:
- Nickel recovery > 90%;
- Nickel grade >13% in concentrate;
- Negligible arsenic in concentrate; and
- Very attractive Fe:MgO ratio (>50:1).
The Golden Swan drill drive consists of a 400 metres drill drive from the existing Silver Swan decline to facilitate resource definition and ongoing exploration drilling at Golden Swan and the wider Southern Terrace.
Once the drill drive is completed, drilling will start with the aim of proving up a mineral resource for Golden Swan.
In addition, further exploration drilling from the Silver Swan decline into the Southern Terrace below the Golden Swan mineralisation recently commenced and will continue over the current quarter.
WestAuz drilling jumbo in the Golden Swan Drill Drive.
Maiden resource in Q3
Harold said: “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 aim is to have a maiden resource reported for Golden Swan during Q3 2021 and then move straight into mining studies and processing options which include direct shipping ore (DSO) or restarting the Black Swan concentrator.
“We hope to have all these studies completed by the end of calendar year 2021.”
Lancefield tailings
During the quarter, the company declared a JORC 2012 mineral resource for the Lancefield Gold Tailings Project of 1.5 million tonnes at 1.25 g/t gold.
Poseidon purchased an option to acquire the right to treat the Lancefield Gold Tailings last year, and if the option is exercised, the company will enter into a royalty and right to treat agreement with the licence holder - granting it the exclusive right to reprocess the tailings at the Windarra Gold Project.
The Lancefield Gold Tailings will now be incorporated into the definitive feasibility study (DFS) being undertaken on the North and South tailings dams at Windarra that contain an indicated mineral resource totalling 105,000 ounces of gold.
The DFS is due for completion late in Q1 2021.
Fully funded for future work
As of December 31, 2020, the company had cash and current investments totalling $20.1 million.
The company intends to use the funds raised from the recent placement to:
- Complete the Golden Swan Drill Drive;
- Undertake up to 15,000 metres of diamond core resource drilling on the Golden Swan mineralisation;
- Undertake additional diamond drilling from surface and/or underground to further the test to potential of the Southern Terrace to host additional high-grade nickel mineralised zones;
- Complete additional down hole electromagnetic surveys;
- Undertake resource to reserve drilling of the Silver Swan orebody to increase the reserve base; and
- For general working capital purposes
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