Poseidon Nickel Managing Director/CEO Peter Harold commented 'This is a very significant discovery in the context of Black Swan given it is only the second time significant massive sulphides have been intersected within the Black Swan disseminated channel since the discovery of the Gosling Lode in 1996.

This major achievement is a testament to the efforts of our geological team and particularly our Chief Geologist, Steve Warriner, Neil Hutchison (Geological Consultant) and our geophysics consultants, Newexco. We are very much looking forward to seeing how this new discovery unfolds.'

Poseidon Nickel (ASX: POS, 'the Company') is pleased to announce it has discovered high-tenor massive nickel sulphides in the first hole of a drill program designed to test a recently identified electromagnetic (EM) anomaly. The new lode has been named 'Golden Swan'.

Poseidon previously announced on 11 February 2020 ('106% Upgrade of Nickel Reserve at Silver Swan') the Newexco-led identification of a large EM anomaly consistent with a massive sulphide EM response at the base of the Black Swan komatiite channel. The anomaly was located in a similar stratigraphic location as the Gosling Massive Sulphide orebody. The high-grade Gosling Operation produced 121,417t @ 4.4 %Ni.

Diamond drill hole PBSD0029A intersected 19.5m (11.5m true width) of visual confirmation of nickelbearing, highly mineralised komatiite including 2m of high-tenor massive sulphides between 739.5m and 759m downhole. The intersection is located near the very top of the Golden Swan anomaly which continues for around 150m below the current intersection. The core has been logged and sampled and is en route to the lab for priority analysis.

The above assessment of the estimate and proportions of mineral species present, has been deduced from visual confirmation from the drill core. Note that visual estimates potentially provide no information regarding potential impurities or deleterious physical properties. Samples from the core are presently being taken for additional review and substantive assays. Result are currently expected within 10 days for separate disclosure.

Geological Explanation

Study of the drill core from the current intersection has revealed that the Golden Swan massive sulphides are occurring on the base of the Black Swan channel. This differs from the 1996 Gosling discovery in a significant way.

Gosling has been interpreted to have formed on a detached felsic raft within a large, dominantly disseminated sulphide orebody. The raft was dislocated from the channel base and gave the disseminated sulphides a 'sheltered' surface on which to accumulate as massive sulphide, rather than continue being swept down the channel and remain suspended in the flowing lava.

The Golden Swan intersection reveals massive sulphides accumulating directly on the Black Swan channel floor which is underlain by an in-tact felsic footwall on its southern edge. The interpretation of this is that the Black Swan lava flow was widening and slowing down, allowing sulphides to naturally drop to the channel floor without requiring another intervention such as a felsic raft to induce settling. The slowing down would most likely be related to a widening of the channel for which there is good evidence. The footwall felsic remains attached to the channel wall and forms the natural floor below the Black Swan komatiite flow.

The implications of this is that the extent of the massive sulphides at Golden Swan are not limited by the size of the transported felsic raft as they were at Gosling, but now by the size and topography of the larger, main channel floor. The footwall topography offers natural massive sulphide trap-sites as is observed 400m to the north at the high-grade Silver Swan deposit.

The successful 2019 drilling campaign intersected very wide, blebby sulphide mineralisation in PBSD001A, 223m @ 1.02%Ni and PBSD0002, 289m @ 0.62% Ni. Due to available drill positions the holes were angled along the width of the Black Swan channel, which provided the Company with key details on how wide the channel was at this point when it was formed. The current Golden Swan lode intersection lies 45m to the west of PBSD002, revealing more information as to the height of the Black Swan channel mineralisation. 'Height' and 'width' here refer to the original horizontal and vertical dimensions of the mineralised section of the lava channel during formation. The channel now runs vertically into the earth due to deformation. Comparing this to the dimensions of the orebody in the open pit suggests that significant widening of the channel has taken place 900m 'downstream', which is congruent with flow slowing and the subsequent formation of massive sulphides from gravitational settling as seen in the core.

Future Drilling and EM Programs

Background: The 2019 DHEM survey of PBSD0002 managed and interpreted by Newexco, identified 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 produced 121,417 t @ 4.4 %Ni.

Confirmation: The current (Stage 1) staged drilling and EM survey approach has been designed to enable a level of flexibility and multi-purpose outcomes; the now completed Stage 1 tested the DHEM anomaly and has confirmed its width, location and that it contains nickel.

Next Steps: Stage 2 will involve a second wedge hole to test the lower portion of the conductor and to provide information on continuity and dip for use in further geophysical modelling.

Comment in relation to COVID-19

Poseidon's management team has introduced a variety of protocols and measures in response to COVID19. The self-imposed restrictions may change on a regular basis and in response to changing government guidelines in respect to safe operating practices. As such planned operations and exploration programs and other on-site activities may be subject to change or unforeseen delays outside the Company's control.

Contact:

Tel: + 61 (0)8 6167 6600

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 (which should be read with the Competent Person statements below).

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