The Black Swan Nickel Project commenced operations in 1997 and operated continuously until 2008, producing 179kt of nickel in concentrate. The project includes the high-grade underground Silver Swan and Golden Swan nickel resources, the Black Swan open pit disseminated nickel resource and a 2.2Mtpa nickel concentrate plant and associated infrastructure.
The combined Black Swan nickel resource totals 26.3Mt at a nickel grade of 0.72% for 189kt Ni, which includes the high-grade underground resources at Silver Swan, 146kt at a grade of 8.8% nickel for 12.9kt Ni, and Golden Swan, 160kt at a grade of 3.9% nickel for 6.2kt Ni.
The project is located approximately 600km east of Perth and 50km northeast of Kalgoorlie, Western Australia.
BLACK SWAN BANKABLE FEASIBILITY STUDY (BFS)
In November 2022 the Company released its Bankable Feasibility Study (BFS) for the 1.1Mtpa mill feed option nickel project. The key outcomes resulting from the completion of the BFS were as follows:
- Mining and processing 1.1Mtpa of feed from Black Swan could deliver free cashflows of $333M with a pre-tax NPV8 of $248M and an IRR of 103% at the Australian dollar nickel spot used at the time of release.
- Combined Black Swan Ore Reserves are 3.5Mt averaging a grade of 1.0% Ni for ~35kt contained nickel.
- The Study assumed milling of 5.0Mt of feed over four years to produce ~200kt concentrate containing ~30kt nickel.
- Black Swan can produce a high-grade nickel concentrate with ~15% Ni, < 6% MgO and a Fe:MgO ratio of 5:1 which is highly desirable for conventional nickel smelters.
- Estimated C1 unit cost of ~US$4.50/lb and an All in Sustaining Costs of ~US$4.90/lb on a 100% payable basis (Ni in concentrate before smelter deductions).
- Existing infrastructure means a low pre-production capex of ~$50M compared to a greenfields operation, which includes $38M for refurbishment of the Black Swan concentrator.
- An ESG focus was embedded into the Feasibility Study process with carbon emissions being reduced compared to the 2018 Feasibility Study by accessing grid power.
Following the softening of the nickel prices over first half of 2023, together with various project related items, the company indefinitely deferred the Black Swan nickel project restart in July 2023. From this date Poseidon shifted its strategic focus to other commodities, including gold, which lead to the merger with Horizon Minerals.
NICKEL EXPLORATION
Following deferral of the Black Swan Nickel Project the company focused on near surface targets which presented low cost exploration activities that were highly leveraged to the existing nickel resources and processing infrastructure. Although deeper exploration targets have been identified at Black Swan, including the down plunge extension of the Silver Swan resource, given the current nickel price outlook near surface targets remain the focus.
In late 2023 Poseidon engaged Muller Geological Services Consultancy (MGSC) to complete a data integrity audit against the geological interpretations at Black Swan. Work streams included lithogeochemical correlation and verification of all logged geological units within the geological felsic footwall 3D model which was then updated – a key setting for massive sulphide development. A comparison was made to a prior review completed by NewExco, with both consultants independently validating two highly prospective high-grade targets close to surface at Cygnet South and Upper Southern Terrace, with a third potential target at Upper Northern Terrace.
Upper Cygnet South
The Upper Cygnet South target is located between Cygnet and the Black Swan pit. Cygnet previously produced 11kt of nickel contained at an average nickel grade of 2.2%. The target area is approximately 250m by 150m, with further potential open at depth. This area has had very limited drilling and includes a number of historic drill intersections the best being 1:
– BSD011 – 0.10m @ 3.57% Ni
– BSD054A – 0.13m @ 3.78% Ni
Upper Southern Terrace
The Southern Terrace was first identified and announced to the market in August 2020 following the discovery of Golden Swan. The Southern Terrace target area is approximately 1,200m by 300m and hosts the Gosling resource, which produced 5.3kt of nickel contained at an average nickel grade of 4.4% and the Golden Swan resource which contains 160kt at 3.9% nickel for 6.2kt nickel tonnes.
The primary near surface target is located south of Gosling and remains under-explored with limited drilling. Spanning approximately 350m by 150m in size, the area has three Down Hole Electro Magnetic (DHEM) anomalies along with a number of historic mineralised intersections1:
– BSD165 – 5.55m @ 2.70% Ni
– BSD116 – 1.90m @ 3.02% Ni
– GUD264 – 5.77m @ 3.91% Ni
– GUD220 – 4.00m @ 7.48% Ni
Upper Northern Terrace
With a total area of approximately 600m by 200m, the Northern Terrace is divided into two surfaces, Upper and Lower. The Upper Northern Terrace area is 400m by 200m with limited historical drilling, that includes the following intersections which underpins its prospectivity1:
– SUD2951 – 2.27m @ 7.13% Ni
– SUD2952 – 3.82m @ 2.70% Ni
Further assessment of this area is required to fully define the exploration targets along each surface.
1 Refer to Poseidon Nickel Limited (ASX:POS) ASX Announcement “Low Cost, Near Surface Exploration Targets Identified at Black Swan” dated 30 May 2024
GOLD EXPLORATION
Low cost exploration activities at Black Swan identified a number of gold in soil anomalies at Black Swan, with the most prospective being Wilson’s Prospect. Further information on the Wilson’s Prospect can be found on our greenfields exploration page [HYPERLINK].