Poseidon Nickel Ltd (ASX:POS, OTC:PSDNF) is powering ahead towards the restart of the Black Swan Project in Western Australia, following positive outcomes from a bankable feasibility study (BFS) for a standalone 1.1 million tonnes per annum million feed option to produce smelter grade concentrate.
The company has kicked off an 11,000-metre reverse circulation (RC) drill program into the Black Swan disseminated resource in order to increase mineral inventory for a potential mine life extension.
This drilling program is scheduled to be completed in early February 2023 with all assay results expected by the end of March 2023.
Looking ahead, final work streams are underway as the company heads toward the restart with a final investment decision (FID) expected in the second quarter of 2023.
“Pressing ahead to the restart”
Poseidon managing director and CEO Peter Harold said: “Following the release of our 1.1 million tonnes per annum smelter grade concentrate feasibility study and the recent equity raising, the company is pressing ahead to the restart of Black Swan.
“The resource drilling program we just started aims to increase the life of mine and optimise the start-up mine production schedules for the project.
“We are now primarily focused on the offtake and project financing work streams.
“Poseidon aims to finalise the preferred offtake and project financing partner(s) by early second quarter 2023.
“The company is on track to announce the final investment decision on the project during the second quarter of next year.
Expansion project
Poseidon has received strong interest in the rougher concentrate product from the 2.2 million tonnes per annum feed project, which will have a lower nickel grade and higher magnesium oxide content and hence will be more attractive as a feed for pressure oxidation or high-pressure acid leach plant rather than a conventional nickel smelter.
Metallurgical studies are ongoing to determine a typical specification for the rougher concentrate to allow for potential off-takers to provide indicative terms.
The benefit of the expansion project is that annual production of nickel in concentrate would increase and the mine life could be extended due to the ability to treat the talc carbonate material which is not included in the current ore reserves.
Harold adds: “While the plan is to commence operations producing the high-grade nickel concentrate we have received strong interest in the rougher concentrate product, which has a lower nickel grade and higher magnesium oxide content, and therefore we are undertaking the feasibility study on this project – which we now refer to as the Expansion Project.
“If the rougher concentrate can be sold locally to pressure oxidation or high-pressure acid leach plant with attractive nickel payability then it is possible Black Swan will switch from producing smelter grade concentrate to rougher concentrate at the optimal time in the future.
“The great benefit of the Expansion Project is that annual production of nickel in concentrate would increase and the mine life could be significantly extended due to the ability to treat the talc carbonate material which is not included in the current ore reserves.”