Silver Swan now hosts an indicated and inferred resource of 130,000 tonnes grading 9.6% nickel for 12,448t, down from 16,049t at 9.5%, but there is less risk compared to the more uncertain 2019 resource.

 

The high-grade indicated resources from both Golden Swan and Silver Swan now stand at 250,000t at 7.1% for 17,665t, with an increase of some 75% in high-grade ore over the past three years, an addition of 7620t despite the Silver Swan reduction.

 

Managing director Peter Harold said a focus on drilling since last October, using newly established drill cuddies, had resolved uncertainties associated with the 2019 resource estimate that was completed with holes drilled at very acute angles.

 

The recent drilling intercepted the ore bodies in optimal positions, with most holes focused on Tundra-Mute.

 

"The high-grade Golden Swan and Silver Swan resources will be important sources of feed for the Black Swan ‘fill the mill' strategy," he said.

 

That strategy, adopted in last September, examined options for a restart of the 150,000tpa Silver Swan high-grade circuit, but it decided on a A$22 million plan to refurbish the existing 2Mtpa Black Swan plant, originally developed for treating low-grade disseminated open pit, to be run at 1.1Mtpa.

 

Finalising a bankable feasibility study and securing offtake and finance interest are now key goals with a final investment decision targeted for the December quarter, with a bankable feasibility study now expected in September.

  

Further tonnes will  likely be added later this quarter, with an estimate pending for the disseminated resource at Black Swan.

 

The resource is pending on five assays from drilling below the open pit, which are due in the next few days.

 

Its metallurgical tests suggest Black Swan can deliver higher nickel grades in the final concentrate than indicated by earlier work.

 

GR Engineering is nearing completion of a study into restarting the process plant.

 

Poseidon's plan is to restart the mine, with supplemental feed from the Silver Swan tailings and existing stockpiles, and then gradually restart operations at Lake Johnson and Mt Windarra.

 

Poseidon had cash of $22 million in cash at the start of the year.

 

Poseidon, which counts Black Mountain Metals and Andrew Forrest's Wyloo Metals as a some of its largest shareholders, has traded between 5.9c-16c over the past year. 

 

The stock was steady this afternoon at 8.6c yesterday, valuing it at $263 million.