The company expanded the electromagnetic (EM) footprint, discovered new EM plates and also returned strong results from preliminary metallurgical test work at Golden Swan, and also commenced the Golden Swan Drill Drive construction project over the quarter.
Poseidon managing director and CEO Peter Harold said: “The December quarter saw the company achieve a number of significant milestones including the commencement of the Golden Swan drill drive, which once completed, will allow resource drilling and a well-supported $10 million placement to fast-track exploration.”
“Extending the Golden Swan footprint”
Harold said: “The successful installation of the underground electromagnetic fixed loop provided high quality DHEM results on the existing Golden Swan EM conductors and further EM surveys identified new EM anomalies, extending the footprint of Golden Swan DHEM plates.
“In addition, two EM anomalies were identified in the footwall of the Southern Terrace, indicating potential for mineralisation to be hosted outside the existing Golden Swan zone.”
Notably, one drill hole intersected a strongly mineralised interval of massive/matrix nickel sulphides, returning 6.4 metres (3.7 metres true width) at 9.60% nickel on the Southern Terrace basal contact including 1.6 metres (0.9 metre true width) at 14.89% nickel.
Harold said: “A third intersection, 50 metres up plunge from the previous two intersections confirmed high-grade nickel sulphides in the newly identified upper extension of the Golden Swan mineralised zone.
“The three intersections to date demonstrate the significance of the Golden Swan discovery.”
High-grade nickel concentrate
Additionally, metallurgical test work from the Golden Swan drill core returned strong results including:
- Nickel recovery > 90%;
- Nickel grade >13% in concentrate:
- Negligible arsenic in concentrate; and
- Iron:Magnesium oxide ratio of >50:1.
Harold said: “Preliminary metallurgical test work indicates Golden Swan could produce a high-grade nickel concentrate with low impurities which would be very attractive to nickel smelters globally.”
Golden Swan drill drive
With the drill drive development progressing, the company is continuing to execute its strategy of building a high-grade nickel sulphide inventory at Black Swan.
Once the drill drive is completed, drilling will start with the aim of proving up a mineral resource for Golden Swan.
In addition, further exploration drilling of the Southern Terrace, which lies below the Golden Swan mineralisation, has recently commenced and will continue over the March 2021 quarter.
Summary of project advancements achieved over the December 2020 quarter
Lancefield Gold Tailings
During the quarter, the company declared a JORC 2012 Mineral Resource for the Lancefield Gold Tailings Project of 1.5 million tonnes at 1.25 g/t gold containing 62,000 ounces gold.
Poseidon purchased an option to acquire the right to treat the Lancefield Gold Tailings, and if the option is exercised, the company will enter a Royalty and Right to Treat Agreement with the licence holder.
This will grant the company the exclusive right to reprocess the Lancefield gold tailings at the Windarra Gold Tailings Project.
The Lancefield tailings will now be incorporated into the Definitive Feasibility Study currently being undertaken on the North and South Tailings Dams at Windarra - which contain an indicated mineral resource totalling 105,000 ounces gold.
The definitive feasibility study is due for completion late in Q1 2021.
Placement to fund exploration
On the back of the successful Golden Swan discovery, the strong nickel price and buoyant equity markets, the company raised $10 million via a placement through Morgans Corporate Limited.
This increased Poseidon’s cash position to $20 million at 31 December.
Harold said: “The placement has provided the company with the necessary funds to accelerate our exploration activities at Black Swan and aggressively explore the Southern Terrace, which hosts the high-grade Golden Swan discovery.
“Funds from the placement have been allocated to completing the Golden Swan drill drive, the Golden Swan resource drilling program, further exploratory drilling and EM surveys within the Southern Terrace and resource to reserve conversion drilling of the Silver Swan resource.”
Maiden resource expected in Q3
Harold said the activities are aimed at building a sufficient high-grade inventory at Black Swan to allow mining to recommence after a 10-year hiatus.
He said: “Our aim is to have a maiden resource reported for Golden Swan during Q3 2021 and then move straight into mining studies and processing options which include Direct Shipping Ore (DSO) or restarting the Black Swan Concentrator.
“We hope to have all these studies completed by the end of calendar year 2021.”