Name of the Project
Black Swan nickel operations restart project.

Location
Kalgoorlie, in Western Australia.

Project Owner/s
Poseidon Nickel.

Project Description
The mine has 16 200 nickel tonnes derived from measured and indicated material and other modifying factors, such as dilution, which represents 70% of the mine plan or 82% sulphide ore tonnes.

The mine plan also includes additional inferred material, which excludes probable reserves. This amounts to 30% of the nickel tonnes of the mine plan or 18% of the processed sulphide ore tonnes.

A feasibility study has confirmed that the Black Swan operations – the Black Swan openpit mine, the Silver Swan high-grade underground mine, the Black Swan sulphide concentrator and supporting infrastructure – can be brought back into operation at a low level of capital investment without any regulatory or technical barriers.

The study envisages production of about 8 000 t/y of nickel in a smeltable grade concentrate from the Black Swan process plant and direct shipping ore from the Silver Swan underground mine. Ore previously mined and currently stockpiled at Black Swan will be processed at Black Swan. Combined mill feed will average 1.1-million tonnes a year, compared with process plant capacity of 2.2-million tonnes a year, which will be able to process third-party feed on a toll treatment basis or buy at the gate under contract terms.

Several mines within the Kalgoorlie region will come out of contract and the opportunity exists to competitively bid for the ore. The project has a mine life of 3.1 years, with several promising extensions to be considered.

Potential Job Creation
An estimated 180 jobs will be created on site.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 10% discount rate, of $43.6-million and an internal rate of return of 92%.

Capital Expenditure
Total project capital requirements are estimated at $56.66-million, including plant and mines refurbishment and development.

Planned Start /End Date
The feasibility study has confirmed that the operations can be brought back into operation, with first production within 12 months of fully funding the project.

Latest Developments
Higher nickel prices have prompted Poseidon Nickel to take the decision to restart its Black Swan operations.

The Poseidon board has approved an accelerated programme of work that will include the rehabilitation of mine escape ladderways at the Silver Swan mine, the rehabilitation of all access ways and structures at the Black Swan plant, and the dewatering of the Black Swan openpit mine.

The estimated contracted costs for these works are estimated at A$2.9-million, and is considered to be necessary precursors to ensure that the bulk of mine and plant rehabilitation work can proceed at an accelerated rate, but in an orderly and safe environment. The dewatering of the pit is a necessary step allow for access from surface to the Black Swan orebody.

The work will be completed over the coming months to provide the basis for a rapid restart.

The capital expenditure and rehabilitation work at the processing plant will run concurrently with metallurgical testing and optimal processing improvements that are also continuing.

Poseidon has been working to derisk and improve the bases for a positive restart decision, including conduction drilling at the Silver Swan mine and at the Black Swan openpit.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Poseidon Nickel, tel +618 6167 6600, fax +618 6167 6649 or email admin@poseidon-nickel.com.au.