Poseidon Nickel is on track to become Australia’s next nickel sulphide concentrate producer following positive feasibility study outcomes.
The results show that mining and processing of 1.1 million tonnes per annum of feed from the Black Swan mine in Western Australia could deliver free cash flows of $333 million with a pre-tax net present value (8 per cent) of $248m and internal rate of return of 103 per cent at the current Australian dollar nickel price.
Black Swan can produce a high-grade nickel concentrate with about 15 per cent nickel and an iron: magnesium oxide ratio of 5:1, highly desirable for conventional nickel smelters.
Existing infrastructure means a low pre-production capex of about $50m compared to a greenfields operation, which includes $38m for refurbishment of the Black Swan concentrator.
The company is now progressing discussions with potential offtake and financing partners to achieve a final investment decision.
Managing director Peter Harold said Poseidon had achieved a significant milestone for its “Fill the Mill” strategy by completing the bankable feasibility study.
“These positive economic outcomes are set against an environment where capital and operating costs have increased significantly since the 2018 feasibility study was completed,” he said.
“The team at Poseidon together with our contractors and consultants have put in a huge effort throughout the study period undertaking resource drilling, resource model updates, mine studies, metallurgical testing, process plant refurbishment and operating cost estimates, marketing and logistics studies and economic analysis to ensure the study numbers are robust.
“Resource drilling, mineral resource estimate updates and mining studies have increased the combined project ore reserves to 3.5mt, averaging 1 per cent nickel for 35kt nickel contained, which combined with the Silver Swan tailings and existing stockpiles, has extended the project life to over four years of processing.”