The drill bit is in motion at Poseidon Nickel’s (ASX: POS) wholly-owned Lake Johnston project in Western Australia, with hopes of proving up a nickel resource close to existing mine infrastructure.
The company today reported the restart of diamond core drilling at its high-grade Abi Rose nickel deposit, which was discovered in early 2016 in a drilling campaign revealing mineralisation grading up to 10.22% nickel.
The deposit lies about 400m north of the historical Emily Ann nickel mine, which had produced 46,000 tonnes of nickel during its mine life at an average grade of 4.1% nickel.
This latest drilling campaign is being undertaken by Mitchell Drilling Services and will comprise three diamond drill holes for 1500m.
In the event of success with the first holes, an additional three holes for 1800m are planned to immediately follow.
Poseidon today announced it has also awarded a contract to mining consulting group Newexco Services to assist with overlapping rig management, logging and geological and geophysical support.
Previous work with Newexco had led to the discovery of Abi Rose.
Poseidon is hoping Newexco’s continued support will advance the Abi Rose project “with the aim of discovering enough nickel mineralisation to potentially define a resource within close proximity to the existing Emily Ann mine infrastructure”.
Lake Johnston project
Both the Abi Rose nickel deposit and Emily Ann nickel mine are located within Poseidon’s 100%-owned Lake Johnston project.
The project also hosts the Maggie Hay deposit, which has estimated to hold a resource of 3.5 million tonnes grading at 1.49% nickel for 52,000t of contained nickel.
Poseidon Nickel chief executive Robert Dennis said while the 2016 discovery of Abi Rose was a “significant breakthrough” for the company at the time, suppressed nickel pricing and funding constraints meant any further work had to be placed on hold.
Now that the nickel market has improved, the recommencement of drilling at Abi Rose was regarded as one of the company’s top priorities.
“The potential successful development of this deposit would be a major enhancement to the Lake Johnston project due to its close proximity to the existing Emily Ann mine infrastructure,” Dennis said.
Black Mountain Metals cuts a bigger slice
Last week, Poseidon reported Black Mountain Metals had increased its stake in the company to 19.82%.
The battery metals company had made an informal takeover bid for Poseidon in August, although the offer was withdrawn as Poseidon shareholders felt it undervalued the company at $0.06 per share.