Poseidon owns the Black Swan Operations located 55 Kilometres from Kalgoorlie, Western Australia. The facility includes the Silver Swan mine, Black Swan open pit nickel mine and a 2.2Mtpa concentrator.
SulphideX is a private exploration company moving towards listing an IPO on the ASX and owns the exploration tenements EL 38/3111 and EL 38/3150) located at Mt Venn, Western Australia (the Mt Venn Project).
The Mt Venn Project is located within trucking distance from the Black Swan Operations. SulphideX plan to develop the Mt Venn Project. Estrella owns the historical Carr Boyd nickel project (the Carr Boyd Project) located 38 kilometres north of Poseidon’s Black Swan operations.
Poseidon will work with both Sulphide X and Estrella to evaluate toll treating nickel ore mined from both the Mt Venn Project and the Carr Boyd Project at Poseidon’s Black Swan Operations under Ore Tolling and Concentrate Purchasing Agreements (OTCPA), providing a pathway to market for SulphideX and Estrella and a lower processing cost option than construction of their own concentrator facilities. Similar OTCPAs currently exist with the Kambalda nickel miners for processing at BHP Billiton’s Nickel West Kambalda Concentrator.
Under the OTCPAs, SulphideX and Estrella will mine the nickel ore and Poseidon will toll treat the ore producing a nickel concentrate which would be purchased as concentrate from SulphideX and Estrella at agreed pricing arrangements with the sales and marketing of the concentrate to be managed exclusively by Poseidon.
Poseidon is now fully funded to restart the Black Swan open pit, Silver Swan underground mine and the Black Swan concentrator in accordance with the Feasibility Study showing the economics of this project which was released to the market on 18 July 2018. Underground refurbishment works have commenced.
That Feasibility Study showed that based on the existing JORC Resource and Reserves for both the Silver Swan underground and Black Swan open pit the project has an attractive return although the concentrator would be only half utilised, with surplus capacity to process a further million tonne per year of ore. Poseidon is actively engaging with existing and potential near development nickel miners to develop and source third party feed for the Black Swan concentrator.
Poseidon sees the recent closure of the BHP Billiton Nickel West Kambalda concentrator as an opportunity to provide an alternative processing facility for stranded nickel miners as well as improving the available utilisation of the Black Swan concentrator.
Poseidon will strive to fully utilise the concentrator with ore from its own mines and offer a tolling arrangement to local nickel miners under OTPCAs. Nickel West offered this arrangement for many years for the use of its Kambalda Concentrator which is now closed.
Poseidon notes that neither SulphideX nor Estrella have JORC compliant Resources and Reserves at their projects and both companies need to complete additional drilling, modelling and evaluation to meet the terms of the MOU.
Source: Company Press Release
