PERTH (miningweekly.com) – Nickel developer Poseidon Nickel on Thursday said that the refurbishment of its Lake Johnston processing circuit, in Western Australia, has been estimated at around A$31-million.

A scoping study into the project has also estimated that the operating costs for the process facility are estimated at approximately $36/t based on a throughput rate of 0.9-million tonnes a year.

“The results from the scoping study demonstrate that the Lake Johnston plant could be refurbished for a very modest A$31-million over a seven-month period. Similar to the Black Swan project, the estimated refurbishment costs and time are a fraction of what it would take to build a new processing plant and the associated infrastructure such as the 200-person village, tailings dam, airstrip, etc,” said Poseidon MD and CEO Peter Harold.

“We see Lake Johnston as our next nickel sulphide mining and processing operation which could come on stream sometime after we recommence operations at Black Swan. If we can get both Black Swan and Lake Johnston back into production we could achieve one of our stated corporate objectives of producing at least 15 000 t/y of nickel in concentrate.”

The Lake Johnston plant started operating in 1998 with the original Lake Johnston concentrator treating ore from the Emily Ann underground nickel mine. In total 1.5-million tonnes of ore were mined and processed from Emily Anne, delivering 57 000 t of contained nickel. In 2007, the Maggie Hays deposit was brought online with a resource of 12.3-million tonnes.

Workings at Maggie Hay were allowed to flood in 2017.

Poseidon said on Thursday that the company will review the previous studies on mining the remaining Maggie Hays resource and start an aggressive exploration programme aimed at increasing the resource base at Lake Johnston. The initial exploration programme will consist of up to 250 holes on 43 lines, drilling up to 15 000 m, targeting the high priority Western Ultramafic unit.