ASX-listed Poseidon Nickel is progressing with its efforts to restart the Black Swan project with 20% of assays returned of a 11 000 m in-pit drill programme that aims to increase the mining inventory to extend the mine life and enhance startup feed schedule.

The company also notes that it has received strong interest in product offtake, with shortlisted parties undertaking site visits to the project, which is about 600 km from Perth, and 50 km from Kalgoorlie.

The project started operations in 1997 and operated continuously until 2008.

MD and CEO Peter Harold says Poseidon’s 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. 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,” he says.

Poseidon conducted a bankable feasibility study on the restart of the Black Swan project in November 2022.

The company is currently undertaking pre-work at Black Swan that includes rehabilitation works of the underground mine that will be scheduled to coincide with the mine ramp-up and an in-pit resource upgrade to increase mine life, which will be completed once all assay results have been received.

Poseidon has also completed dewatering of the openpit, and has finalised a contract with a selected engineering company for processing plant refurbishment.

The company is working on obtaining outstanding approvals for the restart, and notes that planning is well under way for the onboarding of the technical team.

In terms of personnel, Poseidon has identified accommodation as one of the key execution risks, and is therefore looking at various options in relation to having sufficient rooms in Kalgoorlie for the full complement of personnel required for the operating phase.

There is a temporary accommodation camp at site which will be used for the plant refurbishment.

EXPANSION

In addition, Poseidon is undertaking a feasibility study to expand the project, which is based on increasing the mill feed rate from 1.1-million tons a year to 2.2-million tons a year and producing a rougher concentrate which will have a lower nickel grade and higher magnesium oxide content.

This product will be an attractive feedstock for a pressure oxidation, high-pressure acid leach or a precursor cathode active material plant, rather than a conventional nickel smelter.

Metallurgical studies are under way to determine the enhanced rougher concentrate nickel grade, the metallurgical recovery and the typical concentrate specifications to enable potential offtakers to provide indicative terms.

Poseidon notes that these terms will be a key component in determining the economics of the expansion project.

The key attraction of the expansion project is that yearly production of nickel-in-concentrate could increase significantly, and the mine life could be extended owing to the ability to treat talc carbonate ores which are not included in the current ore reserves.

The key to unlocking the value of the talc carbonate material is to find a non-conventional smelter customer/s for the proposed product, which is a main focus of the expansion study.