Poseidon Nickel Ltd (ASX:POS, OTC:PSDNF) has wrapped up its disseminated drilling program, which consisted of diamond drilling beneath the Black Swan open-cut pit to determine the extent of the resource as work aimed at restarting the project advances.
Its next step is to progress a bankable feasibility study (BFS), which will be delivered around the same time as the final investment decision on the restart
The Black Swan Disseminated (BSD) program involved drilling of 24 holes for 5,144 metres and has added to the company’s understanding of widespread mineralisation within the Black Swan ultramafic flow.
Progress on DFS
Managing director and CEO Peter Harold said: “The company has made good progress on the Black Swan BFS over the past three months, notwithstanding the BFS delivery has been pushed back a few months due to a combination of COVID, the extra drilling below the open pit and increased activity in the resources sector.
“The resource drilling below the pit was extended to increase the knowledge of the serpentinite zones and has assisted in establishing the optimal pit shell for the BFS.
“The company continues to undertake various pre-production works to support the restart.
"Most recently we completed rehabilitation works on a 150-metre stretch of the Silver Swan decline so the electromagnetic (EM) platform hole below Tundra-Mute could be drilled.”
Modelling for new resource estimation
Modelling is underway to delineate the Serpentinite and Talc altered parts of the orebody using logged intervals supported by quantitative X-ray diffraction (QXRD) analysis. Assays will be applied to this model as they become available to support the JORC resource update.
The company is working with WSP Golder on the new resource estimation and is aiming to release the results to market during the current quarter.
Silver Swan extension opportunities
At Silver Swan, a deeper hole is being drilled for an EM survey to follow the EM plate identified in hole PTMD022, which could identify a new area prospective for massive sulphide mineralisation beneath the currently known extents of the deposit.
This extension of the Silver Swan resource could build additional high-grade mine inventory.
The updated mineral resource for Silver Swan is due for release later this month.
Metallurgical test-work done
Metallurgical test-work on various ore sources, nickel recoveries and potential concentrate specifications is well advanced, with ore characterisation and blending tests demonstrating that the iron to magnesium oxide ratio in concentrate can be improved.
Regrind tests on Black Swan disseminated samples also confirm that a higher nickel grade can be achieved in the final concentrate BFS.
Engineering work is well underway on the project, with GR Engineering working on this component.
BFS timeframes pushed out
The company still needs to conduct further drilling and metallurgical test-work to quantify the serpentinite zones below the current open pit floor level.
Additional drilling, work scope changes and industry wide pressures have pushed the BFS delivery out a few months to September 2022. The final investment decision will be delivered around the same time as the BFS.
Strong offtake interest
There has been strong interest in the Black Swan concentrate offtake from various potential customers, based on preliminary specifications and production estimates. Indicative offtake terms confirm concentrate saleability and competitive market terms.
POS partner Pure Battery Technologies (PBT) has secured around $120 million in funding from the Federal Government for its pCAM refinery hub.
Preliminary test-work indicates that Black Swan concentrates could be a suitable feed material for the pCAM refinery.
Poseidon is in the process of negotiating a definitive agreement with PBT in relation to working together.
“A contract for the balance of the decline rehabilitation has recently been awarded and will commence immediately,” Harold said. “The Federal Government grant of $120 million for PBT’s proposed Kalgoorlie pCAM refinery hub is a major step forward for the project.
“This refinery could be of great benefit to Poseidon by maximising margins on concentrates supplied to the refinery as well as potentially being able to treat a broader range of nickel concentrate specifications, thereby unlocking significant additional value from the company’s large nickel sulphide resource base proximal to Kalgoorlie.”
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