Poseidon Nickel will refurbish a 1.1-million-tonne-per-annum concentrator as part of its restart of the Black Swan nickel project in Western Australia.
The decision to restart the concentrator follows a scoping study that was recently completed at Black Swan by GR Engineering.
Poseidon’s scoping study revealed the circuit refurbishment will have a capital cost of $22.1 million.
According to Poseidon, processing circuit refurbishment is the most economically viable production strategy.
Other estimates from the scoping study included a 150,000-tonne-per-annum Silver Swan circuit with contract crushing for $13.4 million, and a 150,000-tonne-per-annum Silver Swan circuit with secondary and tertiary crushing for $15.9 million.
However, the operating costs of the Silver Swan circuits were significantly higher than the $29.30 per tonne estimate at Black Swan.
Poseidon managing director and chief executive officer Peter Harold said both the Silver Swan and Black Swan plants can be refurbished in around six months.
“The results from the GRES (GR Engineering) scoping study demonstrating that while both processing plants can be refurbished at a relatively low cost, and in a relatively short time frame the large resource base at Black Swan together with the positive outlook for the nickel price and improved payabilities of nickel in concentrates makes the 1.1 million-tonne-per-annum plant, fed by a combination of ore sources, including the underground high-grade, the most attractive project for Poseidon,” he said.
The Black Swan project has a resource base of close to 200,000 tonnes of nickel, which it anticipates will capitalise on stronger nickel prices.
Poseidon received commitments to raise $22 million to advance Black Swan’s restart and has also initiated a share purchase plan to raise another $3 million for the project.
The company expects to produce first nickel concentrate at Black Swan in December 2022.
Poseidon’s share price is $0.12 on the ASX at the time of writing.