The contracts will supply key financial and technical data for an integrated operation that includes up to 600,000 tonnes per annum of Windarra ore combined with 500,000 tonnes per annum of Black Swan ore to be processed through the existing plant.
Poseidon is intending to have this work completed by the end of July 2014.
Black Swan acquisition
At the start of the month Poseidon made a game changing pathway-to-production acquisition of the Black Swan processing plant from Norilsk Nickel that removes the $300 million Capex bogy from the equation.
The cost was $1.5 million.
As well as the ability to process large nickel inventory on site and the increase in throughput capacity.
The processing plant will be able to process Windarra ores in addition to the large remaining nickel inventory on site.
The acquisition includes the Black Swan processing plant and Black Swan open pit mine containing 185,800 tonnes nickel in ore.
SCOPE OF WORK
Golder Associates Pty Ltd has been awarded a scope of work to undertake additional analysis on the Black Swan resource base with the intention of reporting the Mineral Resource estimate to JORC 2012 guidelines.
Golder has previously undertaken extensive resource review work at the site for the previous owners.
The resource work includes reviewing in pit resources as well as ore currently stockpiled on the ROM pad but not presently included in the Projects resource
Golder will also seek to verify the condition of the current tailings dam. Poseidon
believes that the dam has several years of remaining capacity at the intended throughput rates before a wall lift is required but wishes to have this independently verified.
Golder will also complete a transport and logistics study.
GR Engineering Services Limited has a substantial history with the Black Swan concentrator expansion, completed in 2006, and with the continuing operations until the plant was closed in early 2009.
They have been commissioned, by Poseidon, to develop a detailed scope of work,
cost estimate and schedule for restarting the processing plant. The updated plant ran for less than 2 years until February 2009 and appears to have been adequately maintained since that time.
Operating Cost Budget
Simulus Engineers have been commissioned to produce an overall integrated operational mining study for the combined Black Swan and Windarra project.
The study will determine the likely operational and capital costs for the facility.
Poseidon is continuing to negotiate other ore tolling and offtake arrangements as previously advised and will determine the best option for the Company in progressing the Windarra Project in the coming weeks.
The acquisition of Black Swan however provides an alternate and high quality option.
Poseidon's acquisition of the Black Swan processing plant from Norilsk Nickel was a game changer - delivering a pathway to production.
The company is looking to move Black Swan forward quickly, and has contracts for pre-start engineering activities, which are expected to be completed by the end of the month.
Proactive Investors' short term price target for Poseidon Nickel has been achieved. Our price target is maintained of $0.225 within nine months.
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