Black Swan Production Restart, page-67

Ah, many thanks!

A quick read of the summary and proposal objectives for this Nov, 2018 power station proposal reveals that BS was (and very likely still is) connected to the mains grid via the 8MW “West Kalgoorlie (Black Swan)” and 10 MW “Black Flag” 33kV feeder lines -- both connected via substations at Black Swan. At the time of this proposal (late-2018) Western Power was only able to supply 3MW of power to BS via the grid. POS proposed to initially make up the required power shortfall by installing 8MW of diesel power-generating capacity at BS to supplement the available mains supply. It further flagged the likelihood of increasing the on-site power-generating capacity to ~12MW over time (under a separate future proposal).

(https://minedex.dmirs.wa.gov.au/Web/sites/details/14e1c0f8-23ec-4e51-8219-b8d543cf4734 - expand the Information Sources section, which is the pathway access Atom's link.)

VERY interestingly, there was little-to-no mention of this in the market announcements that I can remember at that time in mid-2018. I haven't done a deep dive along those lines to verify, so don't hold me to that, but my confidence level is >90%.

What is "interesting" to say the least(!) is the following quote which I took a screenshot of and posted above from several months earlier that year (Jul, 2018):

"Restart Capital Costs
"The Black Swan Nickel Operations has been on care & maintenance and all assets remain in good standing. Only minor deterioration of the plant is evident and previously stockpiled nickel ore has been thoroughly tested to confirm nickel recovery and concentrate quality.

"A full geotechnical study of the underground and open mine has been completed. A modest amount of refurbishment work is required including works to emergency escape ladder ways for the underground mine. Dewatering, power, ventilation, communications and refuge facilities remain in place and in good standing at Silver Swan." (Emphasis added.)

(Source: "Black Swan & Silver Swan Feasibility Study Supports Restart" announcement (18/07/18, p.5).)

Presumably this "power"... "remaining in good standing" comment only related to the u/g power infrastructure at Silver Swan, rather a more general comment about the availability of power to the site from the mains grid!!

One would have expected to see at least passing mention of this issue in mid-2018 feasibility announcement that formed the basis document for the 2018 large CR, but no! This was symptomatic of the problematic communication style with previous management -- particularly our previous COO, MR, imo. This is the same feasibility announcement document that I sat down with them trying to make sense of, to no avail.

One hopes this item was included in the (then) pre-production capex estimates that were provided at that time, but who knows.

What we do know (from the subsequent aerial photos to as recently as April, 2021) is that the proposed power station was never built. No surprises there, given the new Board put a halt to the restart, given the Ni market deterioration that occurred soon after the 2018 CR.

It will be interesting to see what commentary there is on this issue in the updated BS DFS leading into the FID later this year and whether there is still a need to build a supplemental power station at all (i.e. what Western Power's local mains grid supply capacity is nowadays).

Many thanks for this, Atom.

Z