Black Swan

  • 2.2Mtpa processing plant
  • Silver Swan underground 16kt Ni* (grade - 9.5%)
  • Black Swan open pit & stockpiles 179kt Ni* (grade - 0.6%)
  • High-grade discovery at Golden Swan
  • Southern Terrace

OVERVIEW

The Black Swan Project is located approximately 600km east of Perth and 50km northeast of Kalgoorlie, Western Australia and 300kms South of Poseidon’s Windarra Nickel Project.

The Company continues to progress toward a commencement of mining and processing operations at Black Swan given the positive outlook for nickel. Operations at Black Swan over FY21 focused on supporting exploration on the Golden Swan discovery, preparation works for proposed restart and the normal care and maintenance activities.

The current process plant was built in 1996 and upgraded in 2007. It was put on care and maintenance in February 2009 following a period of low Ni prices.

Golden Swan Drill Drive

The Company made significant progress defining the Golden Swan discovery over the financial year.
Following the successful discovery of Golden Swan during the prior year, the construction of the 465 metre Golden Swan drill drive commenced in December 2020 to provide a platform for resource definition drilling to take place. The drive was completed safely and without incident in late April 2021.
The drill drive included the establishment of two dedicated drill positions to facilitate resource definition drilling of the Golden Swan exploration target. Resource drilling commenced in late April 2021 and was completed in late July 2021 ahead of schedule with a total of 60 holes and 15,968 metres drilled. The resource drilling indicates a well-developed, competent felsic footwall unit that allowed high advance rates. The dimensions of the drill drive will facilitate suitable access for future mine production in the event an ore reserve is defined, and a decision is made to mine.

Golden Swan Preliminary Metallurgical Testwork

The Company prepared a metallurgical sample using core from Golden Swan diamond drill-hole PBSD0030B, which intersected massive and disseminated nickel mineralisation from 691 metres down-hole. The assayed interval was 9 metres (4.5 metres true width) at 10.46% Ni. The metallurgical sample incorporated appropriate footwall and hanging wall intercepts to reflect dilution expected during mining. Conventional rougher/cleaner flotation with a single stage of cleaning produced a saleable concentrate grading 13.6% Ni with 95.1% recovery and an Fe:MgO ratio of 10.2. The positive results indicate the Golden Swan mineralised zone is highly amenable to conventional sulphide flotation techniques, yielding high nickel recoveries and saleable grade nickel concentrate with exceptional concentrate quality i.e. high Fe:MgO ratio, low impurities, and low levels of arsenic in concentrate.

Black Swan Scoping Study

During the fourth quarter of FY21, GR Engineering Services (GRES) was commissioned to provide a
Scoping Study to evaluate the capital and operating expenditure (+/-20% accuracy) for commencing
operations at the Black Swan plant. Two processing plant configurations were considered for refurbishment:

Option 1: 150ktpa Silver Swan concentrator to treat high-grade sulphide ore.

Option 2: Black Swan concentrator de-rated to 1.1Mtpa utilising the 4.8 MW SAG Mill in a Single Stage SAG Mill configuration to treat lower grade open pit disseminated ore, Silver Swan tailing, high grade ore and potentially ore from Windarra.

The key findings from the study were:

  • The 150ktpa Silver Swan concentrator can be refurbished for a capital cost of $13.4 to $15.9 million, subject to using contract crushing or utilising the existing Black Swan crushing capacity. The operating cost estimate was $79.09/tonne without contract crushing or $91.60/tonne utilising contract crushing.
  • The 1.1Mtpa Black Swan concentrator can be refurbished for a capital cost of $22.1 million, while the operating cost estimate came in at $29.39/tonne.
  • The study concluded that both concentrator refurbishment options would take approximately six months to complete.

Due to positive outcomes from the Scoping Study and the large (and growing) resource base at Black Swan, the Company has determined the most economically attractive production scenario is to refurbish the Black Swan concentrator (derated to 1.1Mtpa) and fill that plant to maximise nickel concentrate production. This position is further supported by the improved payabilities of nickel in concentrates globally and the positive outlook for the nickel price.

A Bankable Feasibility Study (BFS) is currently in progress to evaluate commencing mining and processing operations at the Black Swan. The BFS will incorporate studies into the blending of mining inventories from several sources. The main source will be the lower grade disseminated ore from the Black Swan open pit. High-grade massive sulphides from the Silver Swan and Golden Swan will be included in the production blend assessment. Ore sourced from Windarra, which is proposed to be hauled to Black Swan at a later point in the production schedule, will also be assessed.

The historical Silver Swan tailings located only 300 metres from the Black Swan concentrator are also likely to form a small proportion of the production blend (10-15%) given that this relatively high-grade nickel tailings resource has a high iron-sulphide content with a low level of MgO. This aspect of the Silver Swan tailings makes it attractive to include as a feedstock blend, to improve the final concentrate marketability. Noting the Fe:MgO ratio is an important criterion in a nickel concentrate specification, with penalties (and ultimately reject limits) applied if the specifications are not met.

In 2018, metallurgical testwork completed on representative samples collected from the Silver Swan tailings concluded that 48% of the nickel in the tailings could be recovered to a rougher flotation concentrate. Importantly with a Fe:MgO ratio of 10:1. Therefore, given the potential benefit to the concentrate marketability, the addition of the Silver Swan tailings will be assessed as part of the BFS.
Accordingly, a maiden JORC 2012 Mineral Resource for the Silver Swan tailings has been announced to allow this important product quality enhancement feedstock to be incorporated into the BFS.

The 675kt measured resource for the Silver Swan tailings, grading 0.92% Ni and 683 ppm Co, will support greater than six years of production blending at the anticipated blend rate, to ensure the final concentrate quality remains within the required specification with respect to the Fe:MgO ratio. The tailings are already at the target grind size, so the incremental cost to reclaim and process will be a small fraction of the overall operating cost. The proportion proposed to be added will not affect the 1.1Mtpa milling capacity proposed for the commencement of operations given the tailings are already ground to the target grind size and there is surplus flotation capacity within the Black Swan concentrator.

For the Fill the Mill Strategy, next steps include delivering a maiden Golden Swan resource,
converting this resource to a reserve, and increasing the Silver Swan Reserve. Assuming the Company can deliver on these then the Black Swan concentrator becomes an attractive option based on the Scoping Study results and assuming acceptable mining costs, metallurgical recoveries, concentrate payabilities and nickel price. The Company has commenced studies on mining the Black Swan disseminated orebody via the open pit and will review and update previous studies on mining and trucking Windarra ore to Black Swan.

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