Poseidon Nickel Limited (ASX: POS, 'the Company') is pleased to provide a project and exploration update. Managing Director and CEO, Peter Harold, commented: 'Although global inflation is returning to anticipated levels, commodities markets remain volatile and somewhat depressed, as a result the final investment decision remains on hold. In the meantime, the company is continuing to progress various work streams while at the same time looking at areas where we can reduce our business costs.
The first phase of the confirmatory metallurgical testwork has shown that the interim non-sulphide nickel assay results from existing diamond drill core are consistent with the Black Swan November 2022 Bankable Feasibility Study. The second phase of metallurgical testwork is well underway using diamond core from drilling completed during August 2023. The drill program was designed to obtain samples representative of all the material to be mined from the proposed open pit. Samples are currently being assayed after which composite samples will undergo locked cycle flotation tests to confirm the sulphide nickel recoveries and concentrate quality achievable across all three zones within the Black Swan resource - hangingwall, main and footwall. The full testwork program is expected to be completed in the first quarter 2024. The defined Target 5 EM plate was drill tested in early September 2023 and unfortunately did not return any significant mineralisation or DHEM conductors.
These results do not eliminate the possibility of mineralisation in areas north of Silver Swan as surveys only cover 50 metres around the previous drill holes. We will continue to assess the exploration potential at Black Swan and will consider future exploration programs aimed at growing the higher grade resources. The recent reconnaissance drilling program at Lake Johnston has been highly successful in identifying anomalous and coincident nickel copper and PGE trends at several areas along the WUU. These metal associations and other positive attributes are considered strong vectors to nickel sulphides.
The company is planning a high priority follow up program along the WUU, which includes drilling at Maggie Hays West where a potential new channel has been identified. The next phase of drilling is mainly comprised of further infill fences of drilling that will provide geological certainty for future deeper drill testing. Given the temporary deferral of the FID we are reviewing all of the costs across the business, both at the asset and corporate levels, with the aim of taking costs out of the business. We plan to implement these cost saving initiatives shortly and will provide additional details of the changes and estimated savings in the coming weeks.'
Metallurgical Testwork
The Black Swan Disseminated Mineral Resource was updated by Golders in early June 2023 on the return of assays from a 112-hole RC program drilled from the base of the pit (refer to ASX Announcement 'Updated Resource provides more Nickel at Black Swan' dated 7 June 2023). The updated Mineral Resource identified a significant increase in the Non-Sulphide Nickel (NSNi) content within the modelled mineralised zones and a significantly lower sulphur to nickel ratio (S:Ni ratio) in the Hangingwall zone. Follow-up work was conducted in June 2023 and July 2023 to verify the NSNi analyses from prior drilling campaigns however suitable clarification could not be sort given the lack of NSNi assay data in historical drilling programs and the differing NSNi assay methods used between laboratories. To improve the metallurgical certainty further test work was recommended utilising additional samples from diamond drill core to validate the recoveries across the orebody and confirm the concentrate quality with respect to the Fe:MgO ratio.
The follow up first phase metallurgical testwork program commenced immediately following the July 2023 capital raise: Existing diamond drill core intervals from previous holes (PBSD038, PBSD052, PBSD054, PBSD057 and PBSD061, refer to ASX Announcement 'Black Swan Restart Project Update' dated 5 April 2022) drilled from the Gosling drive into the base of the Black Swan Deposit have been selected and sent to Strategic Metallurgy laboratory to validate metallurgical recoveries. These samples represent the Main, Hangingwall and Footwall zones and provide spatial representation of the latter years of the mine plan. The results from this testwork will provide information on the NSNi content and the nickel recovery for each ore zone with results expected by late October 2023. While the nickel grade for these samples is relatively high compared to the overall Black Swan serpentinite resource, the underlying Non-Sulphide Nickel (NSNi) content is in line with the metallurgical samples utilised for the November 2022 Feasibility Study (BFS) which is considered a positive outcome
The significantly lower sulphur to nickel (S:Ni) ratio for the Hangingwall zone is clearly evident in the metallurgical samples collected. The implication is that when processing high proportions of the Hangingwall material more Silver Swan Tailings (SST) may need to be added to maintain an acceptable Fe:MgO ratio in the final concentrate. There is sufficient SST resource available to allow for higher proportions to be added when required.
To undertake the second phase of the metallurgical testwork 10-hole in pit diamond drill program was completed in August 2023. This has provided representative metallurgical samples of the early production phase of the Project. The drilling covered the three mineralised zones across the strike length of the deposit, located in both the serpentinite and talc carbonate rock types. The drilling also collected additional samples to progress the metallurgical testwork for the Expansion Project.
The samples are now at the laboratory to analyse for both base metals and non-sulphide nickel (NSNi). In addition, all the core has been scanned for talc using Hylogger with a selection of samples to be sent for confirmatory QXRD talc estimation. Talc estimates (via Hylogger and QXRD technique), are critical to accurately delineate (and remove from the sample selection process) the talc carbonate ore type. Locked cycle flotation tests (LCTs) will then be completed on the serpentinite only mineralised intercepts. LCTs will be completed separately on each ore zone and will include ore blend LCTs using the Silver Swan underground ore and appropriate proportions of the SST. The ore blend LCTs are required to confirm that acceptable concentrate quality specifications, in particular the Fe:MgO that can be achieved for each ore zone. Given the broad scope of the testwork program the metallurgical testwork program is expected to be completed during the first quarter of 2024. 2.2Mtpa Expansion Project The Expansion Project prefeasibility study is on track for completion in late 2023 with the following workstreams progressing: The GRES engineering and processing study, which will provide plant refurbishment capital expenditure and processing operating costs, is on track to be completed this month. The study will also include an assessment of the metallurgical testwork completed to date for the Expansion Project, which has utilised a 50:50 blend of the serpentinite and talc carbonate ore types to produce a lower grade rougher concentrate; Mine plan optimisation work commenced in the September quarter and Entech are currently reviewing mining costs for the larger open pit design; Engagement with potential customers for the rougher concentrate remains ongoing with concentrate samples supplied to interested parties to confirm suitability as a feed source for their hydrometallurgical processes and Work has recently commenced on a pressure oxidation testwork program using the same concentrate samples to assist with prefeasibility study assumptions.
Black Swan Exploration
Work undertaken by geological consultants, Newexco Exploration (Newexco) and our geological team identified several exploration targets. Target 5 was identified as a high priority target which consists of a series of unexplained historic electromagnetic anomalies located to the north of the high-grade Silver Swan channel, approximately 1,000m below surface.
To test Target 5, a 400m hole was drilled from the Silver Swan decline. In addition, a nearby historic hole was reopened and surveyed. The EM surveys utilising the underground EM loop did not replicate the historic anomalies that were identified using the surface loop. However, the new hole has provided additional information on the location of the basal contact and the presence of an embayment feature towards the northern channel. Further geological assessment of this area is ongoing.
Western Ultramafic Unit Exploration
During May 2023 the Company completed an initial program of shallow air core (AC) and reverse circulation (RC) drilling to delineate 14km of the interpreted overturned basal contact of the Western Ultramafic Unit (WUU) (Refer ASX Announcement 'Exciting Greenfields Nickel Intersections at Lake Johnston' dated 3 July 2023). The May 2023 drill program enhanced the prospectivity of the WUU, by identifying numerous prospects for follow-up. This included Maggie Hays West, where Ni:Cu regolith anomalism up dip from isolated historic nickel sulphide drill intersections was identified. The drilling also confirmed the thickening of the WUU at Maggie Hays West to 400 metres and the development of an embayed contact due to a possible channel feature. One of the RC drillholes (PLJA171) was drilled through the basal contact at Maggie Hays West returning MgO values averaging 37% (max. 41 % MgO) and Ni:Cr ratios averaging 4.3 which is indicative of fertile channel facies ultramafic cumulate rocks at the base of the thickened WUU (Refer ASX Announcement 'Exciting Greenfields Nickel Intersections at Lake Johnston' dated 3 July 2023)
Following release of these results, the 4.0m composite samples returning >0.4% Ni results within the WUU were resampled on 1.0m intervals and submitted for the base metal suite analysis along with platinum (Pt) and palladium (Pd). These assays were received mid-August 2023 and confirm the nickel anomalism and indicate coincident combined Pt +Pd in various prospects along the belt. Individual values of up to 254ppb combined Pt + Pd were returned and are commonly greater than 50ppb.T
Gold Tailings Project
Following the termination of the Binding Heads of Agreement with Green Gold Projects Pte Ltd in July 2023 the Company received an expression of interest from a resources company with facilities close to Windarra to process the Lancefield gold tailings and potentially the Windarra gold tailings along with accessing the water resource in the South Windarra pit.
Contact:
Tel: + 61 (0)8 6167 6600.
About Poseidon Nickel Limited
Poseidon Nickel Limited (ASX Code: POS) is a nickel sulphide exploration and development company with three projects located within a radius of 300km from Kalgoorlie in the Goldfields region of Western Australia and a resource base of around 420,000 tonnes of nickel and 180,000 ounces of gold. Poseidon's strategy is focused on the exploration and eventual restart of its established nickel operations in Western Australia with the aim of being a +15,000tpa nickel producer. A critical element of this strategy has been to acquire projects and operations with significant existing infrastructure, large nickel resources and geological prospectivity likely to lead to resource growth through the application of modern exploration techniques. Poseidon owns the Windarra, Black Swan and the Lake Johnston Nickel Projects. In addition to the mines and infrastructure including concentrators at Black Swan and Lake Johnston, these projects have significant exploration opportunities demonstrated by the discovery of the Golden Swan Resource at Black Swan, the Abi Rose and more recently the Maggie Hays West mineralisation at Lake Johnston. The Company completed a Bankable Feasibility Study on Black Swan in November 2022 which will be the first project to restart. This could be followed by Lake Johnston and then Windarra, subject to favourable Feasibility Studies, appropriate project financing structures being achieved, the outlook for the nickel price remaining positive and all necessary approvals being obtained. A Definitive Feasibility Study on retreating the gold tailings at Windarra and Lancefield was completed in mid-2022. A potential partner for this project is currently conducting due diligence on the Lancefield gold tailings and accessing the water in the South Windarra pit
COMPETENT PERSON STATEMENTS
The information in this report that relates to Exploration Targeting and Results is based on, and fairly represents, information compiled and reviewed by Ms Karyn Parker, who is an employee of Poseidon Nickel, and is a Member of The Australian Institute of Geoscientists. Ms Parker, has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (the JORC Code 2012). Ms Parker consents to the inclusion in the report of the matters based on his information in the form and context in which it appears
FORWARD LOOKING STATEMENTS:
This release contains certain forward looking statements including nickel production targets matters that may involve risks or uncertainties and may involve significant items of subjective judgement and assumptions of future events that may or may not eventuate (Forward Statements). Often, but not always, forward looking statements can generally be identified by the use of forward-looking words such as 'may', 'will', 'except', 'intend', 'plan', 'estimate', 'anticipate',' continue', and 'guidance', or other similar words and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production and expected costs. Indications of, and guidance on future earnings, cash flows, costs, financial position and performance are also forward-looking statements. No independent third party has reviewed the reasonableness of any such statements or assumptions. None of the Company, their related bodies corporate and their respective officers, directors, employees, or advisers represent or warrant that such Forward Statements will be achieved or will prove to be correct or gives any warranty, express or implied, as to the accuracy, completeness, likelihood of achievement or reasonableness of any Forward Statement contained in this release. Except as required by law or regulation, the Company assumes no obligation to release updates or revisions to Forward Statements to reflect any changes. Recipients should form their own views as to these matters and any assumptions on which any of the Forward Statements are based and not place reliance on such statemen
POSEIDON NICKEL LIMITED 
