Poseidon Nickel : Silver Swan Resource Update

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ASX Announcement

UPDATED SILVER SWAN RESOURCE UNDERPINS SIGNIFICANT

INCREASE IN HIGH GRADE INDICATED RESOURCE BASE

27 April 2022

Key Points

•  Total Indicated and Inferred Resource at Silver Swan is now 130,000t @ 9.6% Ni for 12,400t Ni at a 4.5% Ni COG Silver Swan

•  The high-grade Indicated Mineral Resources from both Golden Swan and Silver Swan now stands at 250,000t @ 7.10% Ni for 17,665t Ni, a 75% increase of nickel metal from 2019

•  Indicated Resource category is at a confidence level that can be used in Reserve calculations

•  Black Swan Disseminated Resource update on track to be delivered later this quarter

Poseidon Nickel (ASX: POS) ("Poseidon", "the Company") is pleased to announce an updated Mineral Resource Estimate (MRE) for the Silver Swan deposit at Black Swan.

Managing Director and CEO, Peter Harold, commented, "the delivery of the updated high-grade resource at Silver Swan Resource and the Golden Swan Resource in October 2021 has taken a lot of effort and has achieved important deliverables for Poseidon.

Both resource updates have incorporated recent drilling from newly established drill cuddies in optimum positions. The latest drill program at Silver Swan in particular, has minimised the uncertainties associated with the 2019 resource estimate. The 2019 estimate had included numerous drillholes which intersected the mineralised surface at very acute angles. The high-grade Golden Swan and Silver Swan Resources will be important sources of feed for the Black Swan Fill the Mill strategy. We look forward to finalising the updated Black Swan Disseminated Resource and then finalising the open pit and underground mining plans which will form the basis on the Black Swan Bankable Feasibility Study, due for completion in September this year."

Silver Swan Resource Tables

The Silver Swan Mineral Resource Estimate (MRE) was prepared for Poseidon by independent resource consultants Snowden Optiro Pty Ltd following the completion of the 38 hole, 8,179m exploration and resource drilling programme. The 2022 Mineral Resource Update has focussed on the four mineralised lenses:

•  Goose

•  Fledgling-Canard

•  Tundra-Mute

•  Peking Duck

The MRE was classified in accordance with the 2012 JORC Code, has been reported above a 1.0% nickel cut-off, and is included as Table 1 with the JORC 2012 Compliance Tables (Sections 1, 2 and 3) included as Appendix 3.

TABLE 1: SILVER SWAN MINERAL RESOURCE APRIL 2022 AT A 1% NI COG

Tundra-Mute Peking Duck Fledgling- Canard

Goose

99 26 12 2

8.7 2,990 1,720

9.6 2,830 1,770

9.5 2,290 1,250

10.2 3,990 3,160

8,625 2,520 1,120 185

6 5.9 1,500

770

370

105

8.6

2,900 1,660

8,995

2 6.7 1,500 1,070

120

28 12 2

9.5

2,740 1,720

9.5

2,290 1,250

2,640 1,125

10.2 3,990 3,160

185

Total resource

138

9

2,9101,70012,4508

6

1,500

840

490

1469.53,0601,65012,940

Mineral Resource Summary

Poseidon engaged Snowden Optiro Pty Ltd to undertake the Silver Swan MRE update with the aim to quantify the resource and create a Block Model suitable for mine planning purposes. A summary of the methodology is contained in this release.

Geology and Geological Interpretation

The Silver Swan Massive (SSM) deposit comprises four narrow, high grade nickel sulphide mineralised shoots, located along the basal ultramafic contact of the Black Swan Komatiite (BSK). The BSK is a large extrusive ultramafic flow that can be traced over a 3,500m strike length and extends at least 1,600m below surface. The width of the BSK varies from 150 to 600m in the central area of the flow, which narrows significantly along strike north and south of the central portions of the flow.

The four shoots that were assessed for this MRE are Goose, Peking Duck, Fledgling-Canard and Tundra-Mute (Figure 1). There is remnant mineralisation located within the Goose shoot, and the top 15m of the Fledgling-Canard shoot has also been mined. The Peking Duck and Tundra-Mute shoots are unmined, other than some limited development in the upper portions of Tundra-Mute.

Within the Black Swan stratigraphy there are several late felsic to intermediate intrusive unites, typically described as porphyritic dykes which have stoped out the mineralisation. These have been depleted from the mineralisation by resetting the density to 0.00. As with the previous estimates, these have been modelled to ensure that any mineralisation is suitably accounted for.

The BSK hosts both disseminated nickel sulphide (Black Swan Disseminated - BSD), and massive sulphide nickel mineralisation (Silver Swan - SSM, White Swan - WSM, Cygnet - CM, Gosling - GM and Golden Swan - GSM). The SSM mineralisation is the most significant massive sulphide accumulation within the BSK, extending from 195m to 1,550m below surface and consisting of a series of narrow, variably sized vertical shoots.

As a function of the depth of the SSM and the location of the available drilling locations, the majority of the 2019 and earlier drilling was drilled at very acute intersection angles to the mineralisation. The 2020 and 2021 drilling aimed at improving the drillhole intersections and providing infill data for the 2019 MRE (Silver Swan Resource Upgrade and Black Swan Underground RC Drilling - ASX Announcement 5 August 2019).

The 2020 and 2021 drilling programmes predominantly tested the Tundra-Mute shoot, with only a very limited number of drillholes testing the Fledgling-Canard and Peking-Duck shoots, and no additional drilling into the Goose shoot.

Following completion of the exploration drilling in the last quarter of 2021, the interpretations were updated. The 2022 updated interpretations were prepared by Snowden Optiro, primarily using the logged lithology codes identifying the predominantly massive sulphide lithologies, combined with rock geochemistry.

FIGURE 1: LONG SECTION LOOKING WEST SHOWING SIMPLIFIED LAYOUT OF THE SILVER SWAN DEPOSITS

Drilling Techniques

The pre-2020 drillhole downhole surveys were completed using a range of surveying methods ranging from acid etch for the very early (1960 and 1970s) drilling, through to north seeking gyro/REFLEX tools. As a consequence of the previous mining at Silver Swan, there is confidence in the downhole survey data. This confidence is further supported by the observation by the Poseidon team that the 2020 and 2021 drilling program intersected the mineralisation extremely close to the target depths predicted from the 2019 estimate.

The Silver Swan MRE update is based on the 38 holes of the exploration and resource drilling program undertaken by Poseidon in 2021. Drilling was conducted by Webdrill using a Diamec Smart 6 Mobile Carrier rig. The holes were drilled in NQ2 and the core was orientated using the Trucore Orientation Tool and surveyed using the DHS DeviGyro OX tool.

The collar table for the 2021 program is included as Table 3 in Appendix 1.

Figures 2 and 3 show the 2021 and historical drilling that was used as the basis for this MRE.

FIGURE 2: LONG SECTION SHOWING HISTORIC AND RECENT DRILLING AROUND SILVER SWAN DEPOSITS. THE 2021

PROGRAMME IS SHOWN AS THICKER DRILL TRACES

FIGURE 3: CROSS SECTION LOOKING NORTH SHOWING 2019 AND 2021 PROGRAM COLLAR LOCATIONS AND IMPROVED

DRILLING ANGLES FOR 2021 TUNDRA-MUTE PROGRAM

Sampling and Sub-Sampling Techniques

The Silver Swan mineralisation was identified visually using the presence, texture and proportion of nickeliferous sulphide material, and lithology. Samples were divided into logged domains, with no individual sample being greater than 1.2m or less than 0.2m. Core samples are sawn and were sampled as half core, unless duplicates were taken, which required samples to be quarter core. All sampling was as diamond core. Certified Reference Material (CRM) standards and blank samples were submitted at nominal rate of 1 in 20 (achieved rate was 1 in 14 for the CRMs).