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Poseidon delays Black Swan restart

Image shows nickel ore stockpiles and mining truck

Photo by Bloomberg

17th July 2023

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Nickel company Poseidon Nickel has pushed back the restart of its Black Swan project, in Western Australia, citing project-related factors and external market conditions.

A final investment decision on the restart of the project had initially been targeted for late in the first half of 2023, but Poseidon Monday told shareholders that Western Power had advised that grid power would be available only from late 2024.

“The offtake and project debt financing work streams continue to progress well, together with obtaining all the necessary approvals for the Black Swan restart. While the team has made solid progress advancing the project towards the restart, we have been advised that grid power will not be available at site until late 2024,” said Poseidon MD and CEO Peter Harold.

“In addition, we have determined from the recent confirmatory drilling and updated resource model that further metallurgical testwork is required to confirm the recoveries used in the feasibility study for the disseminated openpit ore. These project-related factors together with the continuing tightness in the Western Australian labour market, the lack of the availability of Kalgoorlie fly-in, fly-out accommodation and the increased volatility in global commodity and equity markets have resulted in us deferring the Black Swan restart decision.

“We expect the volatility in global markets to start to abate into 2024 providing a more favourable environment for project development. We will constantly monitor the project-related factors and together with external market conditions. Our primary aim remains to restart Black Swan as soon as it is feasible to do so,” said Harold.

“In the meantime, we will continue to add value for shareholders by completing the Black Swan expansion project prefeasibility study and undertake further exploration drilling at both Black Swan and Lake Johnston targeting high-grade mineralisation.”

Poseidon released a feasibility study into Black Swan last year, which 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 around 30 000 t of nickel over its four-year mine life.

The study estimated that the project would have a pre-tax net present value of A$248-million and an internal rate of return of 103%, based on the current nickel price.

Edited by Creamer Media Reporter

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