Poseidon Nickel Ltd (ASX:POS, OTC:PSDNF) has secured a $180,000 grant from the West Australian state government to hunt for nickel sulphides at the Western Ultramafic Unit of its Lake Johnston Project in Kalgoorlie.
Poseidon’s 15,000-metre reverse circulation (RC) drilling program aims to delineate and vector towards channel features along the basal contact of the Western Ultramafic Unit, a fertile belt based on historical nickel sulphide intersections.
The grant, awarded under the highly-competitive Exploration Incentive Scheme (EIS), will co-fund 50% of direct drilling costs and 50% of mobilisation costs, the latter capped at $5,000, up to a combined maximum of $180,000.
Planning for the initial program is well advanced and is anticipated to begin in early 2023.
Interpreted basal contact position of the Western Ultramafic overlaying magnetics with highlighted areas of potential nickel sulphides.
“Delighted”
Poseidon managing director and chief executive officer Peter Harold said: “The company is delighted to receive the EIS grant from the WA state government which will assist us to explore the highly prospective Western Ultramafic Unit within the Lake Johnston Project.
“Historically, the nickel exploration mindset at Lake Johnson was heavily focused on the Central Ultramafic Unit as it hosts both the Maggie Hays and Emily Ann nickel mines. The Western Ultramafic unit prospectivity is underpinned with promising reconnaissance nickel drill intersections along its approximately 18 kilometres of strike and remains underexplored.”
Historical mines
The Lake Johnston Project is located 190 kilometres south-west of Kalgoorlie in Western Australia and contains two historical underground nickel sulphide mines, Emily Ann and Maggie Hays, a 1.5 million tonnes per annum processing plant, 200-person village, airstrip, tailings facility and associated infrastructure.
About 1.5 million tonnes of ore was mined from Emily Ann at an average grade of 3.8% nickel, delivering 57,000 contained tonnes of nickel in concentrate between 1998 and 2007.
Mining of the Maggie Hays deposit, with an initial resource of 12.3 million tonnes at 1.5% nickel for 182,000 contained nickel, began in 2008 before the mine and processing plant were placed under care and maintenance in 2013 due to low nickel price. A resource of 52,000 tonnes nickel averaging 1.49% nickel remains at Maggie Hays.
The Emily Ann and Maggie Hays nickel deposits are hosted within the Central Ultramafic Unit, which has been the focus of extensive exploration by previous owners.
Exploration undertaken by Poseidon at the Emily Ann deposit has successfully identified and tested a geological model indicating that it is hosted within a shallow intrusive peridotite body confined by a banded iron formation (BIF) unit.
Lithium opportunity
Poseidon is also reviewing the potential for lithium at Lake Johnston following approaches from third parties.
Reconnaissance field work by Poseidon’s geologists in 2016 located numerous pegmatites towards the northeast of the project’s tenement package.
Rock chip sampling returned assay results grading from 2.80% to 3.85% lithium dioxide (Li2O).