OPTIMISTIC Poseidon believes that the positive market outlook for nickel will improve and Black Swan mine will offer attractive returns
Nickel sulphide development company Poseidon Nickel has completed the feasibility study for its Black Swan nickel operations, located about 600 km east of Perth and 50 km north-east of Kalgoorlie, Western Australia, which confirms that the operations can be brought back into operation.
The operations include the Black Swan openpit mine, the Silver Swan high-grade underground mine, the Black Swan sulphide concentrator and supporting infrastructure.
“Black Swan nickel operations remain on care and maintenance with all assets held in good standing. The engineering study highlighted the key prestart activities required to restart mining and processing activities and to confirm the required capital and operating costs.”
First production can be within 12 months of fully funding the project, at a low level of capital investment and no regulatory or technical barriers exist. All operating licences necessary to restart operations are also in good standing.
The company’s wholly owned operations are expected to generate A$288.6-million in revenue. The restart is estimated to produce about 8 000 t of nickel a year in smeltable grade concentrate from the Black Swan process plant and direct shipping ore from Silver Swan.
Poseidon believes that the positive market outlook for nickel will continue to improve and the low risk and short restart times of Black Swan offer attractive returns on investment.
In a statement, the company says the study was initiated to update previously completed studies, including an analysis of the geological model, resource model and geotechnical studies. The study also includes a redesign of the mining methodologies used for the orebody and an analysis of the necessary work required to restart the process plant and infrastructure.
The company says 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.”
Poseidon expects to appoint an underground contractor to begin early works at Silver Swan.
Project Resources
From the 2017 reserves which are derived from measured and indicated material, and other modifying factors, such as dilution, 16 200 nickel tonnes represents 70% of the mine plan or 82% sulphide ore tonnes.
The mine plan also includes additional inferred material which is outside the probable reserve. This amounts to 30% of the nickel tonnes of the mine plan or 18% of the processed sulphide ore. Most of the additional inferred material is from either the mining of existing inferred stockpiles, mined in conjunction with the dewatering of the pit, or the additional inferred material from the full mineral inventory from underground.
The company says various early works have been undertaken including re-establishment of services at depth underground.
Meanwhile, Poseidon has issued an expressions of interest tender document to potential nickel offtake parties and negotiations are under way.
The company expects to receive offers to sell all of the concentrate produced at Black Swan and direct shipped ore from Silver Swan underground mine either separately or in conjunction with a prepayment facility to fund the working capital and some capital requirements, during the initial start-up period.