Company Profiles, Nickel

Black Swan to benefit from future nickel demand

Black Swan Nickel

Poseidon Nickel is itching to capitalise on bumper nickel prices by fast-tracking its high-grade Golden Swan discovery at its Black Swan project into production.

“We are on our way to making a go-ahead decision by the end of this year, which means we could be producing by the middle of next year,’’ Poseidon managing director Peter Harold says.

The push towards development comes as nickel prices have surged 25 per cent from an average of $US6.26/pound in 2020 to $US7.90/pound (as of end-April 2021).

“We’re pretty much back to $US8/pound after having a bit of a pullback on plans in Indonesia to begin nickel matte for the battery materials sector from nickel pig iron,” Harold says.

“But the market has absorbed that and decided that the market is still going to need a lot more nickel for the electric vehicle revolution.

“Nickel matte from pig iron is going to meet some of the demand, but certainly not all of it. So I get the sense that the thematic driving the nickel price has not changed.”

Golden Swan was discovered in 2020. The drilling of an electromagnetic anomaly, adjacent to the neighbouring Silver Swan deposit at Black Swan, was a first drill hole success – 23.1 metres grading 4 per cent nickel and 0.4 per cent copper.

Getting it in to production next year will break a 10-year hiatus in production from the Black Swan project.

Ahead of a go-ahead decision, Poseidon is to undertaking a resource drill-out of the Golden Swan mineralisation to allow a maiden resource estimate.

“The drilling is going to take about three months, so come the end of July we will give the results to the mining engineers to come up with a mine plan,’’ Harold says.

The resource drilling follows the April completion of a 465-metre drill drive – it can double as a production decline next year – from the existing Silver Swan decline out to Golden Swan.

Harold says two rigs in the drive will drill 13,000 metres in the resource definition program.

The development of the drive, and the drilling program, represents a $10 million commitment, reflecting the company’s confidence that Golden Swan will underpin Black Swan’s return to sulphide nickel production.

Harold says the underground drilling platforms provided by the drive are ideal locations from which to explore the highly prospective Southern Terrace at Black Swan.

Summing up, Harold says Poseidon investors can expect a steady flow of news as 2021 unfolds, leading to a final investment decision by the board on Golden Swan’s development by the end of the year.

“Assuming all goes according to plan, it means we will be generating revenue by mid-2022,” he says.

In addition to what comes from maiden resource estimate at Golden Swan, Poseidon holds a combined nickel resource of 395,000 tonnes across Black Swan, the Lake Johnston project, and the historic Mt Windarra asset.

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