Poseidon Nickel (ASX:POS) is full steam ahead with the restart of the Black Swan Project on the basis of the November Bankable Feasibility Study (BFS) with numerous work streams being progressed as it moves towards the restart Final Investment Decision (FID).
The company reports that FID is on track to be made in the second quarter of 2023.
The main workstreams include, among others, offtake, and debt financing; pre-works at Black Swan; underground remaining rehabilitation works will be scheduled to coincide with the mine ramp up; and resource upgrade (in pit) to increase mine life – will be completed once all assay results received.
Meanwhile, Poseidon reports that firm offers were received for offtake and/or project financing during January 2023.
The company says it has received strong interest and has shortlisted a group of offtakers who can also provide project debt finance. These parties are now in the detailed due diligence phase including access to an electronic data room and site visits, as required. The aim is to have both offtake and project debt financing terms concluded during the second quarter of 2023 so the FID can be made during that quarter.
Addressing the progress, Managing Director and CEO Peter Harold says: “Our primary focus remains on offtake and project financing work streams, with strong interest having been received. The most attractive structure is currently combining offtake and project financing.
“The most attractive structure is currently combining offtake and project financing”
A shortlist of parties have been given access to the data room and are undertaking site visits, as required. We are planning to finalise the preferred partner/s early in the second quarter of 2023 and we remain on track to announce the Final Investment Decision for the restart during the second quarter.
We are also progressing the Expansion Project study with metallurgical testwork well underway to determine the optimum nickel recovery and grade of nickel in the rougher concentrate. The key attraction of the Expansion Project is that annual production of nickel in concentrate could increase significantly, and the mine life could be extended due to the ability to treat talc carbonate ores which are not included in the current Ore Reserves.
Harold notes that the key to unlocking the value of the talc carbonate material is to find a non-conventional smelter customer or pCAM producer for the proposed product which is a main focus of the Expansion Study.
The company has completed an 11,000-metre reverse circulation drilling program, from the bottom of the open pit, into the Black Swan disseminated resource. About 20% of the assay results have been returned with all assays expected by the end of March 2023. The resource model update will then follow, during Q2 2023.
Poseidon reports that the principal aims of the drill program were, among others upgrade some of the large tonnages of Inferred Resources that are available within the proposed open pit shell to Indicated Resources category. The higher confidence levels could lead to an increase in mining inventories and reportable open pit ore reserves.
Other principal aims include enhancing the delineation of the metallurgically important serpentinite and talc-carbonate hosted ore types to quantify variations in their respective characteristics, such as talc and non-sulphide nickel levels as well as sulphur/nickel ratios, to optimise the mining schedules and ore blending strategies; and optimise the mining schedule for the commencement of operations; and
Any increase in the Ore Reserve of the Black Swan open pit would result in a longer mine life which would subsequently improve the NPV and the debt financing parameters for the project.
Work continues on the Expansion Project, which is based on increasing the mill feed rate from 1.1Mtpa to 2.2Mtpa and producing a rougher concentrate which will have a lower nickel grade and higher magnesium oxide content.
Poseidon is a nickel sulphide exploration and development company with 3 projects located within a radius of 300km from Kalgoorlie in the Goldfields region of Western Australia and a resource base of over 400,000 tonnes of nickel and 180,000 ounces of gold.
Poseidon’s strategy is focused on the exploration and eventual restart of its established nickel operations in Western Australia with the aim of being a plus 15,000tpa nickel producer. A critical element of this strategy has been to acquire projects and operations with significant existing infrastructure, large nickel resources and geological prospectivity likely to lead to resource growth through the application of modern exploration techniques.
Write to Adam Orlando at Mining.com.au
Images: Poseidon Nickel Ltd
