PERTH (miningweekly.com) – Nickel developer Poseiden Nickel is undertaking a range of cost-saving measures as it waits for a stronger nickel price to trigger the start of production at its Black Swan operation, in Western Australia.

The company in September announced an executive and board restructure, which saw Peter Harold transition from MD and CEO to nonexecutive chairperson, while Craig Jones transitions from GM mining to CEO.

Derek Le Ferla and Dean Hildebrand retired from the company’s board.

The company in September also announced changes to the operating model at the Black Swan operations to reduce care-and-maintenance costs, changing the pumping and ventilation regime in the Silver Swan decline given an earlier decision to defer the restart of the project.

“We are looking to consolidate what we can do in Perth and around on site as well, to save some money. Some of the initiatives that we've managed to put into place or start to put into place, and which we will execute over the next month, will result in some A$3-million in savings for the business on an annualized basis, which is going to help us continue to do some of the exploration,” Jones told delegates at the Australian Nickel conference.

Poseidon’s focus remains the restart of the Black Swan operation. A bankable feasibility study (BFS) last year indicated that the 1.1-million-tonne-a-year operation could deliver A$333-million in cash flows. The study estimated that the project would require a capital investment of A$50-million, which included A$38-million to refurbish the existing Black Swan concentrator.

Based on an ore reserve of 3.5-million tonnes, averaging 1% nickel for 35 000 t of contained nickel, the project is expected to produce 200 000 t of concentrate containing 30 000 t of nickel over its four-year mine life.

Jones on Wednesday pointed out that the BFS had estimated a break-even cost of $5.90/lb for Black Swan, but noted that this cost analysis had not been updated since November 2022, and that it did not include any inflationary increases.

“That break-even cost doesn't include the cost of capital or any additional funds for exploration, stuff like that. When we look at it in payability terms, which, you know, we haven't locked those things away yet, break-even cost is about $7.50/lb.

“Today, the nickel price is $8.30/lb, so there is not much of a margin to operate in, so we have to make sure we were prudent when we do undertake a restart.”

“We are going to make sure we really understand the operation, so that we do turn it on in the right environment. We will understand how it's going to operate and make sure we can make some margin to ensure we would not have to go back to the market to raise funds because we're falling short and we really didn't understand the products that we produce.”