Poseidon Nickel to begin drilling Abi Rose high-grade nickel discovery

Poseidon Nickel ASX POS Lake Johnston nickel plant Abi Rose drilling Maggy Hays Emily Ann
Poseidon Nickel's Abi Rose discovery is part of the Lake Johnston project which includes the 1.5Mtpa processing plant.

Poseidon Nickel (ASX: POS) is about to launch a drilling campaign at the Abi Rose high-grade nickel discovery in Western Australia where previous drilling unearthed up to 10.22% nickel.

The company announced today it had awarded the drilling contract to Mitchell Drilling Services, which will undertake three diamond holes for 1,500m. The program is scheduled to begin by the end of September once site works have been finished and requisite approvals secured.

If drilling is successful, a further three holes for 1,800m will be completed.

The planned drilling program will target geophysical anomalies that were previously identified. Poseidon hopes drilling will extend the known mineralised zone to firm up an economic nickel deposit.

High-grade nickel was discovered at Abi Rose in 2016 after drilling uncovered intersections of 10.48m grading 3.20% nickel, with two higher grade intervals of 5.72m at 5.72m at 4.66% nickel and 1.29m at 10.22% nickel.

Other intersections were 0.19m at 10.20%, and 1.13m at 3.35% nickel, including 0.26m at 8.67% nickel.

“The discovery of Abi Rose in 2016 was a significant break through for the company but was placed on hold due to the suppressed nickel pricing and funding constraints,” Poseidon chief executive officer Robert Dennis said.

“The market has improved and the company is now well-funded with the commencement of drilling at Abi Rose being one of Poseidon’s first priorities,” he added.

Lake Johnston project

Abi Rose is about 360m north of the previous Emily Ann nickel mine, which is part of the Lake Johnston project.

Emily Ann previously produced 46,000 tonnes of nickel and had a resource grade of 4.1% nickel.

Lake Johnston also hosts the Maggie Hays deposit, which has a resource of 3.5 million tonnes grading 1.49% nickel for 52,000t of contained nickel.

Maggie Hays is also prospective for cobalt and copper with the resource estimating 1,800t of contained cobalt and 3,400t of copper.

“The potential successful development of this deposit would be a major enhancement to the Lake Johnston project, due to its proximity to the existing Emily Ann mine infrastructure,” Mr Dennis said.

Poseidon also has the advantage of its 1.5Mtpa Lake Johnston plant for processing any eventual nearby nickel mines.

By late morning trade, Poseidon’s share price was up more than 4% to $0.051.

Lorna has more than 10 years' experience as a finance journalist and editor. She has written for numerous industry publications reporting on various sectors, including: resources, energy, construction, biotech, pharma, science and technology, agriculture, and chemicals. Specialising in resources, Lorna has also covered a myriad of small and large cap ASX and dual-listed stocks.