Poseidon Nickel will look to ‘fill the mill’ at its Black Swan project in Western Australia as the company aims to capitalise on a strengthening nickel price outlook.
Poseidon will refurbish its 1.1-million-tonnes-per-annum (Mtpa) Black Swan processing plant in Western Australia, before it then feeds the site with a combination of open-pit and underground ore to maximise the nickel output.
The company will also call on its Silver Swan processing circuit to provide tailings to improve its concentrate quality.
It comes after Poseidon recruited GR Engineering Services (GRES) to complete a scoping study on the project.
GRES charted capital and operating cost estimates within 20 per cent accuracy for the refurbishment and operation of the separate 150,000-tonnes-per-annum and 1.1Mtpa ore treatment circuits at Black Swan.
Given Black Swan’s 200,000-tonne resource base, the recent improvements in nickel’s global profitability, due to a tightening market, the strong nickel price outlook and the forecasted longevity of the Black Swan project, the company said the opportunity was too good to pass up.
“The results from the GRES scoping study demonstrated that while both processing plants can be refurbished at a relatively low cost and in a relatively short time frame (i.e. six months) the large resource base at Black Swan together with the positive outlook for the nickel price and improved payabilities of nickel in concentrates makes the 1.1Mtpa plant, fed by a combination of ore sources, including the underground high-grade, the most attractive project for Poseidon,” Poseidon managing director and chief executive officer Peter Harold said.
In August, Poseidon confirmed it had received commitments to raise $22 million via a share placement to accelerate Black Swan’s restart.
The company also launched a share purchase plan to raise a further $3 million for the project.
Poseidon aims to produce first nickel concentrate at Black Swan in December 2022.