Poseiden flags $56.7m restart at Black Swan

Poseidon Nickel has released a feasibility study confirming the viability of restarting its mothballed Black Swan project near Kalgoorlie, with an estimated capital expenditure of $56.7 million.

The study forecasts the mine can be brought back into operation within 12 months of the project being fully funded.

The project includes the Black Swan open pit mine, the Silver Swan underground mine and the Black Swan processing plant.

The study said a capital investment of $12.9 million was needed for Silver Swan, along with $18.5 million for the plant.

The project comprises a probable metal resources of 16,200 tonnes of nickel at a grade of 0.9 per cent for 1,790t.

The operation was placed into care and maintenance in February 2009 following a period of low nickel prices.

“The study confirms that the operations can be brought back into operation with first production within 12 months of fully funding the project, at a low level of capital investment and that no regulatory or technical barriers exist,” Poseidon said in a statement to the ASX.

“The engineering study highlighted the key prestart activities required to restart mining and processing activities and to confirm the required capital and operating costs.”

In May last year, the company released a definitive feasibility study and said it expected to spend up to $25 million to restart the Silver Swan mine.

Since then, the company has signed a memorandum of understanding with Northern Star Resources to explore the use of Black Swan to process gold ore and had similar discussions with Empire Resources.

Shares in Poseiden were up 13.51 per cent at 4.2 cents each at 1.15pm AEDT.