Name of the Project
Black Swan nickel operations restart project.

Location
Kalgoorlie, in Western Australia.

Client
Poseidon Nickel.

Project Description
The mine has 16 200 nickel tonnes derived from measured and indicated material and other modifying factors, such as dilution, which represents 70% of the mine plan, or 82% sulphide ore tonnes.

The mine plan also includes additional inferred material, which is outside of probable reserves. This amounts to 30% of the nickel tonnes of the mine plan, or 18% of the processed sulphide ore tonnes.

A feasibility study has confirmed that the Black Swan operations – the Black Swan openpit mine, the Silver Swan high-grade underground mine, the Black Swan sulphide concentrator and supporting infrastructure – can be brought back into operation at a low level of capital investment without any regulatory or technical barriers.

The study envisages production of about 8 000 t/y of nickel in a smeltable grade concentrate from the Black Swan process plant and direct shipping ore from the Silver Swan underground mine. Ore previously mined and currently stockpiled at Black Swan will be processed at Black Swan. Combined mill feed will average 1.1-million tonnes a year, compared with process plant capacity of 2.2-million tonnes a year, which will be able to process third-party feed on a toll treatment basis or buy at the gate under contract terms.

Several mines within the Kalgoorlie region will come out of contract and the opportunity exists to competitively bid for the ore. The project has a mine life of 3.1 years, with several promising extensions to be considered.

Potential Job Creation
An estimated 180 jobs will be created on site.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at a 10% discount rate, of $43.6-million and an internal rate of return of 92%.

Value
Total project capital requirements are estimated at $56.66-million, including plant and mines refurbishment and development.

Duration
The feasibility study has confirmed that the operations can be brought back into operation, with first production within 12 months of fully funding the project.

Latest Developments
Poseidon Nickel has found two potential sources of third-party feed for its Black Swan concentrator.

Private exploration company SulphideX and listed junior Estrella Resources have signed memorandums of understanding with Poseidon to process ore from their respective projects under ore tolling and concentrate purchasing agreements (OTCPA).

SulphideX owns exploration tenements near Mt Venn, in Western Australia, and is within trucking distance from the Black Swan operations, located 50 km from Kalgoorlie.

Estrella owns the historical Carr Boyd nickel project, about 38 km north of the Black Swan operations.

Under the OTCPAs, SulphideX and Estrella will mine the nickel ore and Black Swan will toll-treat the ore producing concentrate, which will be bought as concentrate from the third parties. The company will manage the sale and marketing of the concentrate.

Poseidon has been actively searching for third-party supplies for the Black Swan concentrator, as ionly about 50% its capacity will be used when its own Black Swan openpit and Silver Swan underground mines reopen.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Poseidon Nickel, tel +618 6167 6600, fax +618 6167 6649 or email admin@poseidon-nickel.com.au.