Poseidon Nickel (ASX: POS), after work delays caused by COVID-19, has come up with another massive sulphide intersection at its new Golden Swan target in Western Australia’s goldfields.
In March, the company announced a new massive sulphide lode at what it named the Golden Swan deposit, located within its Black Swan mineralised channel.
The March hole returned 19.5m of highly mineralised ore including massive nickel sulphides from 739.5m downhole.
This was only the second time significant massive sulphides had been intersected within Black Swan.
Today’s announced result was from an intersection of 9m at the newly discovered Golden Swan. Mineralisation was hit 691.94m downhole.
The intersection is 50m up dip from the March intersection and has assayed at 7.6m at 8.8% nickel, including a 2.1m section at 15.9% nickel.
Black Swan Project is located about 50km northeast of Kalgoorlie and south of Poseidon’s Windarra nickel project.
Drilling result “worth waiting for”
Poseidon managing director Peter Harold said this latest intersection confirms the nickel sulphide nature detected by electromagnetic responses.
“This latest intersection has been worth waiting for after operational delays caused by COVID-19,” he added.
There were also delays resulting from the completion of the downhole electromagnetic platform.
Now, with the completion of the underground loop nearing completion, Mr Harold said the company hopes to highlight further potential around the current Golden Swan intersections as the geological understanding of the area improves.
Poseidon acquired the Black Swan project from Norilsk Nickel Australia in 2014. The project comprises the Silver Swan underground mine, the Black Swan open pit and the Black Swan 2.2 million-tonne-per annum concentrator.
The Black Swan deposit was mined via the open pit method but did not reach completion before being put on care and maintenance in 2009. It has a remaining resource of 179,000 tonnes of nickel metal grading 0.6%.
Gold tailings review underway at Windarra
Given the current high Australian dollar gold price, Poseidon also confirmed it continues to review the economics of re-treating gold tailings at its Windarra nickel project, which lies within the Mt Margaret goldfield near Laverton, WA.
A feasibility study in June showed the tailings could produce 44,000 ounces of gold to return net operating cash flows of $30 million, based on a A$2,500 per ounce gold price. The Australian gold price is currently around $2,830/oz.
The capital cost would be $25 million with payback within 15 months.
At the time, Mr Harold said that by monetising the gold resource, Poseidon could unlock value and provide a low-risk platform that supports its goal of returning the company to nickel production.