PERTH (miningweekly.com) – Junior Caeneus Minerals would use its newly acquired Silver Swan mine as the cornerstone in its plans to become a high-grade, low-cost nickel miner in Western Australia, the company reported on Thursday.

In May this year, nickel miner Poseidon Nickel sold the rights to mine the Silver Swan underground operation, on the Black Swan tenements, to Caeneus in a deal valued at A$1.5-million.

Caeneus would acquire a beneficial interest in the tenement holding the Silver Swan underground mine, and has been granted the right to mine, remove and sell nickel ore above a grade of 2%, as well as to undertake exploration for nickel from the existing underground decline to below a depth of 100 m.

Caeneus would also be granted a licence to enter the tenements and the right to use specific existing infrastructure to facilitate underground mining operations.

Ceaneus told shareholders on Thursday that the company would appoint Nick Poll as MD of the operation, once the acquisition has been completed.

Poll said that Caeneus would use airleg mining techniques, rather than the large-scale mechanised mining techniques used by previous owners. He said that the revised approach should be capable of delivering higher grades and better ground conditions.

“We think we can get an early start with initial mining activities, as there are five access drives down there ready to go. Mining operations were suspended just as one access drive had intersected mineralisation and two other access dives were within 4 m and 36 m of the mineralisation in the Tundra block,” Poll said.

He said that it would take between three to four months to finalise the pre-mining plant to satisfy the Department of Mines and Petroleum, allowing Caeneus to reopen the mine.

The Silver Swan mine is currently estimated to host an indicated resource of 48 800 t, grading 11.69% nickel for 5 700 t of contained nickel, and an inferred resource of 98 400 t, grading 11.47% nickel for 11 300 t of contained nickel.

Caeneus said that discussions with brokers and financiers were well advanced to secure the required funding to complete the acquisition and to provide preproduction and working capital to facilitate the restart of the underground mine.