Poseidon Nickel Ltd (ASX:POS, OTC:PSDNF) has delivered a breakthrough improvement in nickel grade and saleability from the results of its recent metallurgical test work as part of a bankable feasibility study (BFS) for the Black Swan Project in Western Australia.
The company is finalising the 1.1 million tonnes per annum Black Swan BFS which it now expects to be completed in the December quarter.
At Lake Johnston, the proposed 15,000-metre Western Ultramafic drilling program is expected to kick off in early 2023.
Work is also progressing on the Mt Windarra nickel mining study to assess the economics of processing the ore at Black Swan.
What’s more, Poseidon is receiving continued strong inbound interest from potential offtake parties and financiers for the Black Swan restart.
“Attractive to potential off-takers.”
Poseidon managing director and CEO Peter Harold said: “The company is in the process of finalising the 1.1 million tonnes per annum Black Swan bankable feasibility study.
“Positive results from recent metallurgical test-work employing locked-cycle flotation tests indicate that the addition of a regrind circuit, utilising the existing 150,000 tonnes per annum Silver Swan ball mill, would significantly improve the nickel grade and reduce the MgO content to levels more attractive to potential off-takers.
“Immediately prior to the shutdown of Black Swan in 2009, a period during which operations were processing only disseminated ore, the project produced concentrate with a MgO content of around 15% which is not preferred for most conventional nickel smelters."
Ongoing workstreams
As progress advances toward completion of the smelter grade concentrate BFS there are a few important workstreams to finalise.
A key item is to confirm anticipated concentrate specifications to optimise offtake terms.
Historical production data from Black Swan shows the project was producing high MgO concentrate immediately before shutting down in 2009.
Consequently, the project team has been looking at options to reduce MgO levels in the concentrate going forward.
Harold adds: “The project team have been looking for ways to lower the MgO levels of the Black Swan concentrate and the recent locked-cycle test-work indicates that MgO levels can be reduced to around 5%, which is a major breakthrough for the project.
“In addition, following the recently completed Quantitative Xray Diffraction analysis program the project team has completed the initial assessment of the talc distribution throughout the Black Swan disseminated resource.
“This work is important to ensure we can more accurately predict the recovery and specifications for both the smelter grade and rougher concentrates.
“This assessment has confirmed that the level of talc within the serpentinite ore will not impede the project producing an acceptable MgO level in the smelter grade concentrate.
“In addition, this work has allowed us to focus on blending the talc carbonate and serpentinite ore types to produce a lower grade rougher concentrate which would be suitable feed for POX and HPAL plants and could significantly extend the mine life at Black Swan.”
Metallurgical test results
Poseidon has received positive results from locked-cycle flotation tests (LCT) using a Black Swan Disseminated (BSD) master composite incorporating a regrind stage (ie, regrinding the rougher concentrate to 80% passing 32 microns).
The LCT incorporating the regrind stage demonstrated a marketable smelter grade concentrate can be produced from the serpentinite ore without adding any Silver Swan tailings or Silver Swan underground massive sulphides.
Harold adds: “Following the recent metallurgical breakthrough, further optimisation test-work is required to finalise study assumptions and confirm concentrate specifications to achieve the best offtake terms.
“As a result, completion of the 1.1 million tonnes per annum smelter grade concentrate bankable feasibility study will be during the December quarter.
“The 2.2 million tonnes per annum rougher concentrate study continues to progress with further infill resource drilling required to convert more inferred resources to the indicated category.
“This drilling will be undertaken from the open pit floor and is expected to commence during November 2022, following the completion of pit dewatering.”
Next steps for BFS
Items remaining to complete the BFS include:
- Additional metallurgical test-work to refine the ore blending strategy and confirm smelter grade concentrate specifications and nickel recovery.
- Indicative terms from potential off-takers based on the optimised nickel concentrate specifications.
- Review and optimise the operating cost models received from mining contractors.
- Finalise the economic analysis based on all bankable study level input assumptions.
“The marketability of our potential concentrates, smelter and rougher, are critical to the outcomes of the respective studies.
“We have identified several potential customers, including Pure Battery Technologies, for the rougher concentrate which has the potential to significantly increase our mine inventory and mine life.
“Also, securing water rights from the Norton Goldfields pits and grid power from Western Power will provide significant operating cost and environmental benefits.
“In addition, the company has continued to progress various pre-production works for the restart of Black Swan.
“The board and management team acknowledge that this additional work has delayed the feasibility study delivery date which will frustrate some shareholders, however, this work is absolutely necessary to ensure the most economically attractive and de-risked option for restarting Black Swan is determined.”