- Poseidon Nickel (POS) has completed a bankable feasibility study (BFS) for a 1.1-million-tonne-per-annum (Mtpa) operation at its Black Swan project in Western Australia
- The company is looking to restart the project, which has been shut down since 2009 and comprises two open pit mines and a concentrator
- The BFS highlights free cash flows of $333 million, a pre-tax net present value of $248 million, an internal rate of return of 103 per cent, and a low pre-production CapEx of $50 million
- Poseidon hopes to reach a final investment decision for the project in the first half of next year and is in the advanced stages of completing a second BFS for a 2.2 Mtpa mill feed option
- Company shares have ended the day 2.33 per cent in the green to close at 4.4 cents
Poseidon Nickel (POS) has completed a bankable feasibility study (BFS) for a 1.1-million-tonne-per-annum (Mtpa) operation at its Black Swan project in Western Australia.
The company is looking at restarting the project, which has been shut down for over a decade and comprises the Silver Swan and Black Swan open pit mines, as well as the Black Swan concentrator.
Today’s BFS shows that 1.1 Mtpa of feed from Black Swan could deliver free cash flows of $333 million with a pre-tax net present value (NPV) of $248 million and an internal rate of return of 103 per cent at current nickel prices.
The study also assumes milling five million tonnes of feed over four years would produce 200,000 tonnes of concentrate, containing roughly 30,000 tonnes of high-grade nickel.
“Black Swan is highly leveraged to the improving nickel price outlook, with the NPV increasing to $470 million based on an input assumption of US$15 per pound nickel price and foreign exchange AUD:USD $0.65,” Poseidon Managing Director and CEO Peter Harold said.
“These positive economic outcomes are set against an environment where capital and operating costs have increased significantly since the 2018 feasibility study was completed.”
In addition, the company said the project’s existing infrastructure meant a low pre-production capital expenditure of roughly $50 million, and this includes $38 million for the refurbishment of the Black Swan concentrator.
The materials stock is also completing another Black Swan BFS to potentially increase the throughput of the concentrator from 1.1 Mtpa to 2.2 Mtpa. The 2.2 Mtpa BFS is expected to be completed in the first half of next year.
Poseidon Nickel is now advancing discussions with potential offtake and financing partners to reach a final investment decision (FID).
The company said that if it reached an FID in the first half of 2023, concentrate production could begin in early 2024.
POS shares ended the day 2.33 per cent in the green to close at 4.4 cents.