PERTH (miningweekly.com) – Nickel miner Poseidon on Wednesday revealed that it could save about A$240-million at its Mt Windarra operation by processing ore from the mine, in Western Australia, at the recently acquired Black Swan plant.

Poseidon acquired the Black Swan operation, also in Western Australia, from Russian Major Norilsk Nickel in July for an undisclosed amount. The plant was purchased in order to avoid building new facilities at Mt Windarra.

The ASX-listed miner has now completed an engineering study into the Black Swan facility, with ore to be trucked from Mt Windarra to the Black Swan plant.

The operating plan was based on a total initial concentrator throughput of 1.1-million tonnes of nickel ore, comprising 600 000 t from Mt Windarra and a further 500 000 t from the Black Swan openpit mine.

“The outcomes of this engineering activity has clearly demonstrated what a transformational acquisition the Black Swan project has been for Poseidon,” said MD and CEO David Singleton.

“The independent analysis has demonstrated that we have reduced the capital cost of the Mt Windarra nickel project by A$240-million, as well as doubling the ore resources of the company and shaving a year off the development time.

“The key outcome is that the project operating cash flows have been increased markedly by using the Black Swan plant.”

The combined Black Swan and Mt Windarra capital cost requirements have now been estimated at only A$28.4-million, with the total funding requirement being only around A$50-million, including all transaction fees, holding costs of Black Swan, contingencies and working capital.

The initial throughput level was also expected to halve the upfront operating costs, as the concentrator had a design capacity of 2.15-million tonnes of ore a year. Plant throughput and nickel production could be increased by adding ore from the Cerberus nickel deposit, located at the Mt Windarra site, and by increasing mining rates at the Black Swan openpit to meet the full concentrator plant capacity.

Singleton pointed out that Poseidon was also continuing to progress discussions regarding potential ore tolling and a concentrate contract with a “major party”.

“The acquisition has now given us two clear strategic alternatives to either process Mt Windarra ore through Black Swan or to deliver Windarra into an ore tolling agreement and operate Black Swan in its own right.”