Poseidon Nickel (ASX: POS, 'the Company') is pleased to report the outcomes from the Scoping Study on the estimated capital cost for the refurbishment and operation of two processing plant configurations at Black Swan undertaken by GR Engineering Services Limited ('GRES') (ASX Code GNG), namely: the 150,000 tonne per annum (tpa) Silver Swan circuit for treating high-grade sulphide ore and the 1.1 million tpa Black Swan circuit for treating lower grade open pit disseminated ore and potentially ore from Windarra.

Managing Director and CEO, Peter Harold, commented: 'The results from the Scoping Study demonstrate that both processing plants can be refurbished at a relatively low cost and in a relatively short period of time, i.e., approximately six months. This creates wonderful optionality for our shareholders as it allows us to consider producing concentrate from our high-grade resources like Silver Swan and potentially Golden Swan, assuming the current resource drilling results in a maiden resource which can be converted to a reserve. The benefit of producing our own concentrate compared to selling ore would be the ability to obtain higher payability for the contained nickel and improve overall project economics.

In addition, with a strong nickel price environment and positive outlook, it's definitely time to review mining and processing of the lower grade Black Swan disseminated ore and potentially combining that feed with Windarra ore from Mt Windarra and/or Cerberus. These are certainly very exciting times for our shareholders.'

Background

GRES has provided Poseidon with capital and operating cost estimates for the refurbishment and operation of the separate 150ktpa and 1.1Mtpa ore treatment circuits at Black Swan to a +/- 20% level of accuracy, collectively referred to as the Scoping Study. GRES was chosen to undertake the Scoping Study due to their detailed knowledge of both circuits and their experience in the construction and refurbishment of these type of plants. JR Engineering, the precursor to GRES constructed the 150ktpa plant in 1997. Lycopodium constructed the 2Mtpa plant in 2006.

GRES completed a refurbishment cost estimate on the 2Mtpa plant in 2014. It is proposed that the existing 2Mtpa plant would be derated to 1.1Mtpa utilising the SAG Mill grinding capacity only initially but could be rerated later to bring into service the Ball Mill grinding capacity, subject to the quantity of ore reserves defined going forward and the prevailing nickel price.

Contact:

Peter Harold

Tel: + 61 (0)8 6167 6600

FORWARD LOOKING STATEMENTS

This release contains certain forward looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as 'may', 'will', 'except', 'intend', 'plan', 'estimate', 'anticipate', 'continue', and 'guidance', or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipatedproduction and expected costs. Indications of, and guidance on future earnings, cash flows, costs, financial position and performance are also forward looking statements. Forward looking statements, opinions and estimates included in this announcement are based on assumptions and contingencies which are subject to change, without notice, as are statements about market and industry trends, which are based on interpretation of current market conditions. Forward looking statements are provided as a general guide only and should not be relied on as a guarantee of future performance. Forward looking statements may be affected by a range of variables that could cause actual results or trends to differ materially. These variations, if materially adverse, may affect the timing and development of the processing options at Black Swan.

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