While progressing various work streams across its projects, Poseidon Nickel Ltd (ASX:POS, OTC:PSDNF) is finalising a review of its business costs at the corporate and asset levels which it hopes to implement this month in a move aimed at countering weak economic conditions globally
As a result, the ASX-lister is continuing to put on hold the final investment decision (FID) on the restart of its Black Swan Nickel Project in Western Australia.
Regardless, the company is making significant progress on the project and the status quo will allow it to complete more confirmatory metallurgy test work.
Encouragingly, Poseidon has identified strong vectors to nickel sulphides at several areas within its Lake Johnston Project, which include platinum and palladium values.
Work progressing well
“Although global inflation is returning to anticipated levels, commodities markets remain volatile and somewhat depressed,” Poseidon managing director and chief executive officer Peter Harold said in a group-wide exploration update.
“As a result, the final investment decision remains on hold.
“In the meantime, the company is continuing to progress various work streams while at the same time looking at areas where we can reduce our business costs.”
Metallurgy test results
The first phase of the metallurgical testing has confirmed that the interim non-sulphide nickel assay results from existing diamond drill core are consistent with Black Swan’s November 2022 bankable feasibility study.
The second phase of the metallurgical test work is underway using diamond core from drilling completed in August this year.
Samples are being assayed after which composite samples will undergo locked cycle flotation tests to confirm the sulphide nickel recoveries and concentrate quality achievable across all three zones within the Black Swan resource, which is the hanging wall, main and footwall.
The full test program is expected to be completed in the first quarter of next year.
Other restart workstreams are ongoing, including offtake and project debt financing documentation, design and engineering studies and discussions with potential accommodation providers.
Black Swan expansion
On the previously announced Target (NYSE:TGT) 5 at Black Swan, the electromagnetic plate was drill-tested earlier this month but did not return any significant mineralisation or DHEM conductors.
“These results do not eliminate the possibility of mineralisation in areas north of Silver Swan as surveys only cover 50 metres around the previous drill holes,” Harold said.
“We will continue to assess the exploration potential at Black Swan and will consider future exploration programs aimed at growing the higher grade resources.”
Underground diamond drilling at Target 5.
On its goal to have Black Swan process 2.2 million tonnes per annum of nickel into a rougher concentrate, Poseidon is on schedule to complete the pre-feasibility study later this year.
GR Engineering Services is finalising the processing plant capital and operating cost estimates while mining optimisation work is underway based on preliminary cost information.
As well, concentrate sample testing with potential customers are ongoing.
Potential new target
Turning to its Lake Johnston Project, Harold said the reconnaissance drill program carried out in May had identified strong vectors to nickel sulphides at several areas along the Western Ultramafic Unit (WUU).
A resampling of the cores from the Maggie Hays West prospect returned up to 254 parts per billion combined platinum and palladium value.
“The company is planning a high-priority follow-up program along the WUU, which includes drilling at Maggie Hays West, where a potential new channel has been identified.
“The next phase of drilling is mainly comprised of further infill fences of drilling that will provide geological certainty for future deeper drill testing,” he added.
The aircore and reverse circulation drill program at Maggie Hays West and six other nickel prospects along the WUU is targeted to commence next month.
A new program of work with drill lines spaced at 100 metres over a 700-metre strike length has been submitted.