Poseidon Nickel confirms increase to Silver Swan nickel reserves, detects large EM anomaly at Black Swan pit

Poseidon Nickel ASX POS Silver Swan underground mine upgrade reserve
Poseidon Nickel achieves a 106% increase in contained nickel at the historic Silver Swan underground mine.

Poseidon Nickel (ASX: POS) has confirmed a 106% increase to the ore reserve estimate at its Silver Swan underground nickel mine near Kalgoorlie in Western Australia.

The upgrade was achieved as part of ongoing de-risk and re-start work being conducted for the historic Silver Swan and Black Swan tenements, and takes Silver Swan’s reserve to 130,000 tonnes at 5.2% nickel for 6,800t of contained nickel.

This is a 106% rise in contained nickel on the 2017 Silver Swan reserve of 57,000t at 5.79% nickel for 3,300t of contained metal.

Underpinning today’s reserve was the global Silver Swan mineral resource reported in August last year of 16,030t of contained nickel.

According to Poseidon, the updated ore reserve is also based on proposed mining methods, designs, schedules, cost estimates and modifying factors determined from a revision of a 2018 re-start study.

The 2018 restart evaluation built on a 2017 definitive feasibility study for Silver Swan.

In today’s reserve update, Silver Swan’s economics are based on a processing recovery of 92.5% for nickel, commercial offtake terms and a nickel price of $22,335 per tonne.

Black Swan acquisition

Nearby to Silver Swan is the Black Swan processing plant and mine, which were acquired in 2014 from Norilsk Nickel.

Poseidon purchased Black Swan in order to access Silver Swan, the high-grade Black Swan open pit mine, a 2.2 million tonne per annum processing plant and supporting infrastructure.

The plant was upgraded in 2006 and put on care and maintenance in February 2009 during the financial crisis.

EM anomaly

In addition to releasing an updated reserve for Silver Swan, Poseidon has identified a large electromagnetic (EM) anomaly consistent with a massive sulphide EM response towards the base of the Black Swan mineralised sequence at depth below the open pit.

The anomaly is located 550m below the Gosling massive sulphide orebody which was mined in 2008 and produced 121,417 tonnes at 4.4% nickel.

Poseidon is preparing a staged underground drill program to assess the anomaly.

If the source is found to contain nickel sulphides, the company said it would drill a second hole to ascertain the dip and width of mineralisation.

Windarra drilling

Meanwhile, at the Windarra project, 25km west of Laverton, assays from a recent reverse circulation drilling program at the Crazy Diamond prospect have identified gold and nickel mineralisation.

Crazy Diamond is the next komatiite channel to the north of Poseidon’s Cerberus discovery of 69,000t of nickel metal.

While intersecting nickel mineralisation was a secondary aim of the program, the drilling hit a nickel enrichment zone of 5m, approximately 10m below surface.

“Inspection of the drill chips revealed the nickel enrichment is closely associated with gossanous oxide blebs which are interpreted to be weathered sulphides near the basal contact of a large komatiite flow,” the company said.

A small group of samples were also re-submitted for gold, with results including 1m at 0.51 grams per tonne from 30m and 2m at 0.45g/t gold from 33m.

Additional intersections of more than 0.1g/t gold also occurred and have been considered highly anomalous.