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Poseidon Nickel Drilling Points To Increases In Resources At Mt Windarra

Poseidon Nickel (ASX:POS) has drilled its first underground drill hole into the Windarra Deeps mineralisation, intersecting nickel sulphides 20 metres north of Western Mining Corporation's defined C Shoot mineralised body.

This indicates the potential for further increases in the resource base at Mt Windarra.

Poseidon is in the final stages of developing the Windarra Nickel Project, the only new sulphide nickel project in Western Australia in the last 10 years.

To date, five diamond drill tails have been completed into the Windarra Deeps mineralisation, with results now received from the initial holes.

Summary of results

- Drilling intersected C Shoot outside of its defined limits in an area of the deposit previously untested. This has the potential to increase the size of the Mt Windarra resource (WUG 0013).
- Drilling has also identified a 9.37m (true width) nickel intersection which is a thicker high grade section of C Shoot than was expected, further increasing confidence in a resource upgrade (WUG 0012)
- A high grade Hanging Wall lode below F Shoot has been intersected by WUG0021, ~30m below the previous deepest intersection into F Shoot. This has the potential to be a highly significant intersection as it infers the shoot may have reformed at depth.
- Further drill intersections through the targeted C, D and G Shoots are consistent with expectations in terms of grade and widths as modelled from previous drilling data.

Geological interpretation

The geological interpretation of the C Shoot intersection has the potential to increase the size of the Mt Windarra resource, as this area of the deposit, which lies within the hinge of a fold zone was previously untested by either Poseidon or Western Mining Corporation.

Further testing will occur as the drill program continues.

Previous drilling by WMC into similar fold hinges within the mine area yielded structurally concentrated higher grade deposits such as E Shoot, which produced 235,000 tonnes at 2.39% nickel for 5,608 tonnes of nickel metal when mined.

The second hole WUG0012 intersected D Shoot at 362m down hole depth and passed through to intersect C Shoot (which sits behind D Shoot) at a down hole depth of 461 metres.

The C Shoot intersection in particular produced a thicker, higher grade intersection which was better than the grade modelled from previous drilling in this area.

WUG0021 intersected a zone of interfingering disseminated and massive sulphides between 165.6-170.9m downhole.

Niton XRF results returned between 1% and upto 8% Ni within this zone and laboratory confirmation of results is pending.

Poseidon is currently drilling from the hanging wall (eastern) side which opens up opportunities for similar narrow high grade hanging wall positions to be discovered as the drilling progresses.

Drilling program

The drill programme commenced in November 2012 using a single rig and utilising a combination of Wassara pre-collar drilling with diamond core tails.

The plan was that approximately 70% of each drill hole could be drilled with the Wassara system at high advance rates to reduce overall drilling times.

A second, brand new, drill rig also capable of combined Wassara, diamond drilling has been installed underground and has reliably completed initial drilling holes with the intention of recovering the programme.

Project overview

The Windarra Nickel Project is owned 100% by Poseidon and is located in the North Eastern Goldfields, 260km north east of Kalgoorlie on sealed roads.

The project contains four economic parts:

- Recommissioning of the Mt Windarra underground mine
- Development of the new Cerberus underground mine
- Reprocessing of gold tailings on site
- Nickel oxide processing from pre-mined material and historic tailings from year 4.

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