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Poseidon Nickel's scoping study points to economical restart for Lake Johnston nickel facilities

Last updated: 22:13 26 Jan 2022 EST, First published: 22:09 26 Jan 2022 EST

Poseidon Nickel Ltd - Poseidon Nickel's scoping study points to economical restart for Lake Johnston facilities
Lake Johnston primary mill.

Poseidon Nickel Ltd (ASX:POS, OTC:PSDNF) has received promising results from a scoping study assessing the estimated capital and operation expenditure necessary for refurbishment and operation of the Lake Johnston processing plant and associated infrastructure.

The study by GR Engineering Services Limited concluded that the Lake Johnston processing circuit and associated infrastructure in Western Australia could be refurbished for an estimated cost of $31 million, a price Poseidon considers a bargain in comparison to the cost of building a new facility.

Next nickel sulphide operation

“The results from the scoping study demonstrate that the Lake Johnston plant could be refurbished for a very modest $31 million over a seven-month period,” Poseidon Nickel CEO and managing director Peter Harold said.

“Similar to the Black Swan Project, the estimated refurbishment costs and time are a fraction of what it would take to build a new processing plant and the associated infrastructure such as the 200-person village, tailings dam, airstrip, etc.

“We see Lake Johnston as our next nickel sulphide mining and processing operation which could come on stream sometime after we recommence operations at Black Swan.

“If we can get both Black Swan and Lake Johnston back into production, we could achieve one of our stated corporate objectives of producing at least 15,000 tonnes per annum of nickel in concentrate.”

The operation cost for the facility was estimated at about $36 per tonne, based on a throughput rate of 900,000 tonnes per annum.

Poseidon estimates the refurbishment would take about seven months to complete, but is focused predominately on restarting the Black Swan Project, after which Lake Johnston will be developed into a second processing hub.

Next steps

Poseidon will now review the previous studies on mining the remaining Maggie Hays resource and start an aggressive exploration program aimed at increasing the resource base at Lake Johnston.

With the aid of a newly appointed senior exploration geologist, Poseidon has lodged a program of work with with the Department of Mines, Industry Regulation and Safety (DMIRS), for the resumption of exploration activities at Lake Johnston.

The initial exploration program will consist of up to 250 holes on 43 lines, drilling up to 15,000 metres targeting the high priority Western Ultramafic unit.

About Poseidon Nickel

Poseidon Nickel) is a Western Australia-focused nickel sulphide exploration and development company with a resource base of around 400,000 tonnes of nickel and 180,000 ounces of gold.

The company's overarching aim is to explore and eventually established nickel operations where project risk capital and operating costs are low.

Poseidon is developing the Windarra, Black Swan and the Lake Johnston nickel projects, where exploration upside has been demonstrated within the Abi Rose deposit at Lake Johnston and the discovery of the Golden Swan mineralisation at Black Swan.

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