Poseidon Nickel : 106% Upgrade of Nickel Reserve at Silver Swan

Poseidon Nickel (ASX: POS, 'the Company') is pleased to announce the following updates.

A 106% increase in the Silver Swan Ore Reserve Estimate following on from the increase in Mineral Resources.

A large electromagnetic (EM) anomaly consistent with a massive sulphide EM response has been detected towards the base of the Black Swan mineralised sequence at depth below the open pit. An underground drill program to test the anomaly will commence immediately.

Assay results from the scout drilling at Crazy Diamond (Windarra Project) have confirmed both nickel and gold mineralisation.

Commenting Mr David Riekie, Interim CEO said; 'This healthy Silver Swan Reserve upgrade is an important and significant benefit from the ongoing derisking and restart studies on and around Black Swan operations north of Kalgoorlie.

The EM anomaly identified below the Black Swan open pit and previously mined Gosling deposit, offers some very exciting potential and is a focal point for a priority drilling program.

Collectively, these outcomes are important additions that are building on the certainties created from previous successful drilling, to allow Reserve status and upgrade, as well as highlighting potential within previously untested zones. The proximity and location of the anomaly is an exciting prospect. The additional and ongoing successful exploration also extends to our Windarra tenements.'

Silver Swan Ore Reserve Estimate

The Silver Swan Ore Reserve has been updated based on Mineral Resource that was announced to market on 5th August 2019 (refer to Attachment C). The Ore Reserve estimate, prepared by Mining Consultants, Entech Pty Ltd is based on the mining methods, designs, schedules, cost estimates and modifying factors, which have been determined from a revision of the previous Silver Swan and Black Swan 2018 Feasibility Study (refer to Attachment D). The outcomes have been achieved as part of the ongoing derisking and restart studies being undertaken for Black Swan.

The Ore Reserve economics are based on a processing recovery of 92.5% for nickel, commercial offtake terms and a nickel price of A$22,335/t. Copper and cobalt grades in concentrate do not reach assumed payable levels.

The existing Indicated Resources have been converted to Probable Ore Reserves subject to mining modifying factors. Any Inferred material contained within the mine plan has been treated as waste. All material has been assumed to be processed at the Black Swan processing plant located at the site, in conjunction with material mined from the Black Swan open pit and surface stockpiles.

Ore Reserve Estimate Statement

The Ore Reserve estimate for the Silver Swan ('SS') underground nickel mine as at February 2020 is 130,000 tonnes of ore grading 5.2% Ni for a total of 6,800 tonnes of contained Ni metal.

The Ore Reserve represents an update to the previous Ore Reserve announced to market on 26th May 2017. There has been no mining or depletion of the 2017 Reserves since their estimation.

The Mineral Resource used as the basis for the Ore Reserve estimate was announced to market on 5th August 2019. Indicated Resources have been converted to Probable Ore Reserves subject to mine design physicals and an economic evaluation. No Measured material was contained in the Resource. Any Inferred material contained within the mine plan has been treated as host rock waste. The Ore Reserves have been defined at delivery to Black Swan processing plant, on the assumption that Silver Swan material will be processed alongside Black Swan open pit and surface stockpile material as detailed in the 2018 Feasibility Study.

Black Swan Exploration - Large Electromagnetic Anomaly Detected

A Downhole Electromagnetic (DHEM) survey has been conducted on PBSD002, a diamond hole drilled in 2019 sub-horizontally into the Black Swan deposit 900m below the Open Pit. The hole intersected disseminated to blebby nickel sulphides and provided the Company with an ideal DHEM platform to identify possible repeats similar to that of the Gosling Massive Sulphide Deposit.

The DHEM survey managed and interpreted by Newexco, has resulted in a large, off-hole EM anomaly with a response consistent with massive sulphides. The anomaly is located 550m below and in the same stratigraphic location as the Gosling Massive Sulphide orebody. Gosling was mined in 2008 and produced 121,417 t @ 4.4 %Ni. The DHEM anomaly is considered to be a high-priority drill target due to its basal contact location (stratigraphically favourable position to be nickeliferous) and the clean, late-time EM response which is consistent with massive sulphides at Black Swan and Silver Swan.

DHEM and Anomaly Details

PBSD002 intersected disseminated to blebby sulphides. The DHEM survey utilized the DigiAtlantis probe on 5m to 10m stations and a 1km square surface loop with a base frequency of 0.5Hz. The off-hole EM anomaly is located 450m down hole and 35m off to the west of PBSD002. The mineralisation intersected by the drilling is not in itself able to generate the highly conductive anomaly observed due to its disseminated sulphide nature.

A comparison of the Gosling EM response and the new anomaly by Newexco suggests that the source is larger and more conductive than historical EM surveys that found the Gosling deposit. Although this is at an early stage of interpretation this anomaly is interpreted to be caused by a highly conductive source that may be greater than the areal extent of Gosling.

Next Steps

A staged approach to the drilling will be adopted to assess the EM anomaly. Plans are currently being finalised as a priority to drill-test the modelled conductor plate to ascertain if the conductor composition is nickel sulphide. Should the source of the anomaly contain nickel sulphides, a second hole will be drilled to ascertain the dip and width of mineralization.

This program is anticipated to enable the majority of the zone of potential for massive sulphides between Gosling deposit and PBSD002 to be assessed.

Contact:

Peter Harold

Tel: + 61 (0)8 6167 6600

Email: [e-mail]

About Poseidon Nickel Limited

Poseidon Nickel Limited (ASX: POS, 'Poseidon'), is a West Australian focussed nickel company that owns three previously operating Nickel Sulphide mines: Windarra, Black Swan/Silver Swan and Lake Johnston. These 100% owned assets collectively had an operating capacity of 3.6mtpa (Lake Johnston 1.5mtpa; Black Swan 2.1mta). The processing facilities at Lake Johnston and Black Swan have been maintained through company managed, care and maintenance programs. Poseidon released an upgrade to the resource at the Silver Swan deposit on 5th August 2019.

Poseidon is currently undertaking a number of de-risking and restart safety works and similar initiatives at and around Black Swan. Poseidon has continued to explore at Lake Johnston, with recent diamond drilling at the Abi Rose prospect. These exploration results were released to ASX on 22 October 2018 and 21 November 2018.

Windarra has a number of near mine exploration projects including the extension of the original Windarra deposit, Cerberus, South Windarra and Woodline Well. The current Resource Statement below shows a combined Nickel resource of 395,530 tonnes of Nickel.

(C) 2020 Electronic News Publishing, source ENP Newswire