Poseidon Nickel Ltd (ASX: POS) continues to progress towards the restart of the Black Swan project in Western Australia on the basis of the November 2022 Bankable Feasibility Study.
Numerous work streams are being progressed as the company moves towards the restart Final Investment Decision (FID), which is on track to be made in the second quarter of 2023.
“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,” Managing Director and CEO, Peter Harold, said.
“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. The key to unlocking the value of the talc carbonate material is to find a non-conventional smelter customer/s i.e., POX, HPAL or pCAM producer for the proposed product which is a main focus of the Expansion Study.”
The company has completed an 11,000m reverse circulation drilling programme, from the bottom of the open pit, into the Black Swan Disseminated resource.
Approximately 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.
The principal aims of the drill programme were:
* 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;
* enhance 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 optimize the mining schedules and ore blending strategies;
* optimize the mining schedule for the commencement of operations; and
* provide additional material for ongoing metallurgical testwork for the Expansion Project study.
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.
Workstreams for the Restart
The main workstreams are:
* Offtake and debt financing
* Pre-works at Black Swan
o Open pit – dewatering completed
o Underground – remaining rehabilitation works will be scheduled to coincide with the mine ramp up o Resource upgrade (in pit) to increase mine life – will be completed once all assay results received
o Processing plant – finalize contract with selected engineering company for plant refurbishment o Major contracts – discussions will commence as required
o Approvals – continue work on obtaining outstanding approvals required for the restart
o Personnel onboarding – planning is well underway for the onboarding of the technical team
o Accommodation – is recognized as one of the key execution risks and the company is 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 utilized for the plant refurbishment.
Offtake and Debt Financing
Firm offers were received for offtake and/or project financing during January 2023. The company is delighted with the strong interest received 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 Final Invest Decision can be made during that quarter.
Final Investment Decision (FID)
FID remains on track to be made during the June quarter 2023. Assuming that timing is achieved, concentrate production could commence mid-2024, based on the current refurbishment timetable and mine production ramp up schedule.
For further information please visit: https://poseidon-nickel.com.au/
