(MENAFN- ProactiveInvestors)
() has taken a major step towards becoming Australia's next nickel producer.
The Bankable Feasibility Study at Lake Johnston confirmed the restart of the mine and processing plant is feasible and economic at the current nickel price.
The study confirms that the operations can be brought back into operation in a few months at a low level of capital investment and that no regulatory or technical barriers exist.
Key BFS outcomes include production of 8000 tonnes of nickel per annum in a smeltable grade concentrate with all in sustaining cost of production of US$5.39/lb payable equivalent to a C1 cash cost of US$3.43/lb.
The prestart capital cost is US$10.6 million (A$14 million) including plant and mine refurbishment general restart costs plus working capital of circa A$14 million.
The initial mine life is 30 months with a number of promising resource extensions to be developed.
Lake Johnston was in full scale operations only 2 years ago so the purpose of the study was to confirm the necessary steps required to restart mining and processing and to confirm the required capital and operating costs.
Black Swan ore to be trucked to Lake Johnston
Ore previously mined and currently stockpiled at Black Swan can be trucked to Lake Johnston for processing for a period of up to four years.
The combined mill feed will average 1.13 million tonnes per annum compared to process plant capacity of 1.5 million tonnes per annum.
There will be a direct positive impact on employment with around 180 new jobs created at site including contractors.
Poseidon said the intention will be for workforce to be predominantly drive in drive out with onsite accommodation at the existing Windy Hill Camp.
Analysis
The Bankable Feasibility Study at Lake Johnston confirms the restart of the mine and processing plant is feasible and economic at the current nickel price.
Poseidon is therefore leveraged to any increase in the price of nickel.
Key metrics include:
- All in sustaining cost of production of US$5.39/lb payable equivalent to a C1 cash cost of US$3.43/lb; and
- Prestart capital cost is US$10.6 million (A$14 million) including plant and mine refurbishment general restart costs plus working capital of circa A$14 million.
The timeline to potential production is fast with the project implementation plan predicted that start-up will take 120 days.
This is from the point of initiation after financing with the long lead being the start-up of the main mill after full electrical generating power has been re-established.
Poseidon also owns the Black Swan Nickel Project which includes 1.7 million tonnes of mined but unprocessed ore Reserves which Poseidon is planning to progressively transport and process at Lake Johnston.
The 1.5 million tonne per annum processing plant capacity at Lake Johnston is able to process a combined feed from both sites with an average throughput planned of 1.13 million tonnes of ore per annum.
Upcoming catalysts
- Securing financing to move Lake Johnston into production.
- Offtake agreements. Discussions are already underway.
- Resource extensions. This is currently a priority for Poseidon.
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