Poseidon Nickel Limited (ASX: POS, 'the Company') is pleased to provide a Company update.
CEO, Craig Jones, commented: 'the Company continues to progress several important workstreams, namely preparing the Black Swan project for a future restart, feasibility studies on the Black Swan Expansion Project to unlock further nickel tonnes from the Disseminated Resource, exploration activities at Lake Johnston along the highly rated Western Ultramafic Unit and a review of exploration potential at Windarra. At the Black Swan Project, work programs have continued to ensure the Company will be in a strong position to quickly proceed to FID and take full advantage of any future nickel price upswing, whilst a significant reduction in site holding costs has been achieved. The Company continues to prepare itself for a future FID at the Black Swan Project with a cost efficient option for 150 accommodation rooms in Kalgoorlie being secured that meets the personnel requirements as per the Bankable Feasibility Study. In addition, positive results were received from initial confirmatory metallurgical testwork for the Black Swan disseminated ore, indicating the non-sulphide nickel content is consistent with the Bankable Feasibility Study assumptions.
The Expansion Project scoping study remains on track to be completed late in 2023. Recent testing of the rougher concentrates by potential customers has returned 95% extraction for HPAL and 96% for POX. Rougher concentrate is not a widely traded product, so confirming the commerciality and beneficial synergies through a third party HPAL or POX facility is key. The testwork aims to help set the platform for third parties to provide indicative nickel payability terms to treat rougher concentrate. Follow up exploration drilling at Lake Johnston has been completed and samples submitted to the laboratory. Interpretation of historical drilling data and the most recent drilling supports the theory for channelised ultramafic environments, a key setting for nickel sulphides, are likely to occur along the Western Ultramafic Unit.
It's early days on this exciting development however the opportunity is highly rated by our geological team. We are also reviewing the lithium prospectivity of our Lake Johnston tenements with validation of database records as a first step, followed by field reviews with support from a lithium expert. Lastly, a recent review of exploration targets at Windarra by our specialised geological consultants, Newexco, has been received identifying a number of highly prospective targets which could be tested using low-cost exploration techniques such as electromagnetic surveys. The Company will provide further exploration updates for our shareholders on the Lake Johnston and the Windarra exploration targets as information comes to hand.'
BLACK SWAN
Black Swan Restart Project The Company has recently advanced the following workstreams to progress the Black Swan restart project: Accommodation The Company has entered into an option agreement for the provision of accommodation rooms in Kalgoorlie with an established provider. The low-cost option provides Poseidon a minimum of 150 rooms for a minimum of four years. The option can be exercised at any time during the 12-month period through to the end of October 2024.
Metallurgical Testwork
The Black Swan Disseminated Mineral Resource was updated by Golders in June 2023 and incorporated an additional 3,000 assays from a 112-hole Reverse Circulation (RC) drilling program drilled from the base of the pit (refer to ASX Announcement 'Updated Resource provides more Nickel at Black Swan' dated 7 June 2023). The updated Mineral Resource pointed to a notable increase in the Non-Sulphide Nickel (NSNi) content within the modelled mineralised zones along with a lower sulphur to nickel ratio (S:Ni ratio) in theHangingwall zone. Follow-up work was conducted in June and July 2023 to compare the NSNi assays from prior diamond drilling (DD) campaigns, however a reliable comparison could not be made given the limited NSNi assays completed. The NSNi assays received from the RC drilling program were approximately two times higher than anticipated. This led to a recommendation to improve confidence in the NSNi assay dataset given the importance of the metallurgical recovery assumptions and anticipated concentrate specification for the project
Expert technical advisors recommended the use of samples derived from DD core to assess the variability in the NSNi content within each mineralised zone and to verify the nickel recovery within each mineralised zone. The metallurgical testwork program will also quantify the concentrate specification quality that can be achieved within each mineralised zone.
The first stage of the confirmatory testwork commenced immediately following the August 2023 capital raising: DD core intervals from historical holes were selected and sent to the Strategic Metallurgy laboratory to assess the NSNi content on a one metre sampling basis and to confirm metallurgical recoveries. The samples selected represent the three modelled mineralised zones (Main, Hangingwall and Footwall) and provide spatial representation of the second half of the mine plan. With reference to Table 1, the underlying NSNi content reported from the first stage of testwork is in line with the metallurgical samples utilised in the November 2022 Bankable Feasibility Study (BFS). Despite the limited number of DD samples (70) tested so far, the results indicate that it is likely that the higher NSNi assays derived from the finer RC drill samples was a result of the samples oxidising between drilling and assaying.
The second stage of the confirmatory testwork involves diamond core samples from the ten-hole DD and metallurgical sampling program completed during September 2023: Approximately 520 additional NSNi assays were received from the drilling program that was designed to intersect the three mineralised zones and to spatially cover the north to south extents of the resource. This is another positive outcome given the much larger sampling size and extent of the resource covered by the drilling program. An investigation into why the NSNi assays reported in the RC in-fill drilling program returned 'elevated' values has concluded that partial sulphide oxidation is the most likely mechanism. RC drilling introduces a significant amount of energy (including heat) into the rock, pulverising it to produce ultrafine samples. These ultra-fine size fractions are then susceptible to sample 'aging' i.e., partial oxidation of the liberated metal sulphides. The RC samples took approximately six weeks from drilling to be assayed in the laboratory. This significant time period is also believed to have contributed to the partial oxidation of the pulverised RC samples.
Mtpa Expansion Project
Engagement with potential customers for the rougher concentrate remains ongoing with concentrate samples supplied to interested parties to confirm suitability as a feed source for their hydrometallurgical processes. One potential customer completed High Pressure Acid Leaching (HPAL) testwork and confirmed the nickel extraction for the rougher concentrate was circa 95% when the concentrate was blended at 2.5%, 5.0% and 7.5% (by weight) with their nickel laterite ore. Pressure Oxidation (POX) amenability testwork has also demonstrated high nickel extraction can be achieved with the rougher concentrate with relatively rapid leach kinetics. The testwork reported circa 96% nickel extraction within 30 minutes when applying standard POX operating conditions in a laboratory autoclave
These tests confirm high nickel extraction rates for the rougher concentrate when processed through either a HPAL or POX facility, which is an important input to the ongoing Prefeasibility Study (PFS) for the Expansion Project. The Company has now received the majority of input assumptions to the PFS and remains on track to release the study late in 2023, subject to confirming nickel payability assumptions for the rougher concentrate. Rougher concentrate is not a widely traded product and therefore verifiable nickel payability assumptions are not readily available to confirm revenue assumptions in the PFS. As such, the study is subject to potential customers being able to provide such information. Poseidon continues to progress the product testing and is anticipating receiving indicative payability assumptions that can be used in the PFS.
Western Ultramafic Unit Exploration
During May 2023 Poseidon completed an initial program of shallow Aircore (AC) and RC drilling along a 14km section of the Western Ultramafic Unit (WUU), identifying coincident nickel sulphide pathfinder anomalous zones at several regional locations and primarily at Maggie Hays West (refer to Company ASX announcement 'Exciting Greenfields Nickel Intersections at Lake Johnston' dated 3 July 2023). Poseidon has now completed an initial follow-up drill program targeting both Maggie Hays West and several regional targets. The recent follow-up program comprised a total of 18 AC holes for 844m and seven RC holes for 835m. A total of 1,049 samples were collected and dispatched to SGS's Perth Laboratory for analysis, with all results anticipated to be returned in early December 2023.
Maggie Hays West
The Maggie Hays West component of the recent drill program consisted of 17 AC holes for 807m drilled on 100m spaced lines with the aim to define the position of the basal (eastern) contact of the WUU against the Banded Iron Formation (BIF). Maggie Hays West is located 200m west of the existing Maggie Hays nickel ore body and associated underground workings (Maggie Hays is 250m from the surface within the Central Ultramafic Unit (CUU)). The interpreted stratigraphy and the continuity of coincident nickel sulphide pathfinder anomalous zones will be confirmed once the assays are returned and the interpretation updated. This is expected to be completed in the coming weeks. These interpretations will assist with further target definition and aid planning for the next phase of exploration at the prospect. Important resampling of selected historic DD holes at Maggie Hays West to add more litho-geochemical information has also been undertaken and have been sent to the lab with results expected in early December 2023. The relationship between surface mapping and sampling will be utilised to create a three-dimensional interpretation of the Maggie Hays West prospect.
Gold Tailings Project
The Company is currently assessing the potential of Draslovka's Glycine Leaching Technology which may improve gold recoveries for the tailings retreatment project. Draslovka is a global leader in cyanide-based chemical specialties and their Glycine Leaching Technology is considered one of the most environmentally sustainable and cost-effective ways to produce precious metals and critical minerals. If testing indicates a material uplift in gold recoveries, this technology could improve project economics. Since the Windarra Gold Tailings Definitive Feasibility Study (DFS) (refer to ASX announcement 'Windarra Gold Tailings DFS Highlights Robust Project' released 23 July 2021) was released, the Australian dollar gold price has improved significantly, lifting approximately 30% from A$2,333/oz in the DFS to circa A$3,100/oz today. The improvement in gold price combined with any uplift in gold recoveries could further improve project economics. The Company is also continuing to pursue development opportunities with interested partners for the project
Contact:
Tel: + 61 (0)8 6167 6600.
About Poseidon Nickel Limited
Poseidon Nickel Limited (ASX Code: POS) is a nickel sulphide exploration and development company with three projects located within a radius of 300km from Kalgoorlie in the Goldfields region of Western Australia and a resource base of over 420,000 tonnes of nickel and 180,000 ounces of gold. Poseidon's strategy is focused on the exploration and eventual restart of its established nickel operations in Western Australia with the aim of being a profitable and sustainable nickel producer. A critical element of this strategy has been to acquire projects and operations with significant existing infrastructure, large nickel resources and geological prospectivity likely to lead to resource growth through the application of modern exploration techniques. Poseidon owns the, Black Swan Lake Johnston and Windarra Nickel Projects. In addition to the mines and infrastructure including concentrators at Black Swan and Lake Johnston, these projects have significant exploration opportunities demonstrated by the discovery of the Golden Swan Resource at Black Swan, the Abi Rose and more recently the Maggies Hays West mineralisation at Lake Johnston. The Company completed a Bankable Feasibility Study on Black Swan in November 2022 which is planned to be the first project to restart, subject to appropriate project financing structures being achieved, the outlook for the nickel price remaining positive and all necessary approvals being obtained. A Definitive Feasibility Study on retreating the gold tailings at Windarra and Lancefield was completed in mid-2022.. A potential partner is currently conducting due diligence on the Lancefield gold tailings and accessing the water in the South Windarra pit.
COMPETENT PERSON STATEMENTS
The information in this report that relates to Exploration Targeting and Results is based on, and fairly represents, information compiled and reviewed by Ms Karyn Parker, who is an employee of Poseidon Nickel, and is a Member of The Australian Institute of Geoscientists. Ms Parker, has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (the JORC Code 2012). Ms Parker consents to the inclusion in the report of the matters based on their information in the form and context in which it appears. Additional information contained within this announcement is extracted from the reports titled: 'Exciting Greenfields Nickel Intersections at Lake Johnston' dated 3 July 2023 'Updated Resource provides more Nickel at Black Swan' dated 7 June 2023 'Black Swan Restart Project Update' dated 5 April 2022 which are available to view on www.poseidon-nickel.com.au. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original announcement and, in the case of Minerals Resources or Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person's findings are presented have not materially modified from the original market announcement.
FORWARD LOOKING STATEMENTS
This release contains certain forward looking statements including nickel production targets matters that may involve risks or uncertainties and may involve significant items of subjective judgement and assumptions of future events that may or may not eventuate (Forward 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, strategiesand objectives of management, anticipated production and expected costs. Indications of, and guidance on future earnings, cash flows, costs, financial position and performance are also forward-looking statements. No independent third party has reviewed the reasonableness of any such statements or assumptions. None of the Company, their related bodies corporate and their respective officers, directors, employees, or advisers represent or warrant that such Forward Statements will be achieved or will prove to be correct or gives any warranty, express or implied, as to the accuracy, completeness, likelihood of achievement or reasonableness of any Forward Statement contained in this release. Except as required by law or regulation, the Company assumes no obligation to release updates or revisions to Forward Statements to reflect any changes. Recipients should form their own views as to these matters and any assumptions on which any of the Forward Statements are based and not place reliance on such statements
POSEIDON NICKEL LIMITED 
