Black Swan

History

The Black Swan Project is located approximately 600km east of Perth and 50km northeast of Kalgoorlie, Western Australia.

The project commenced operations in 1997 and operated continuously until 2008. The following production was achieved:

• Black Swan Open Pit - 5.9Mt @ 0.7% Ni for 41kt Ni
• Silver Swan Underground - 2.7Mt @ 5.1% Ni for 138kt Ni
• Total production 179kt Ni concentrate

The Company continues to progress toward a commencement of mining and processing operations at Black Swan given the positive outlook for nickel with the completion of the 1.1Mtpa mill feed Bankable Feasibility Study and the work continuing on the Bankable Feasibility Study for the 2.2Mtpa throughput option.

2022 Black Swan Bankable Feasibility Study (BFS)

In November 2022 the Company released its Bankable Feasibility Study for the 1.1Mtpa mill feed option. The key points resulting from the completion of the BFS as follows:

• Poseidon is on track to become Australia’s next nickel sulphide concentrate producer following positive Feasibility Study outcomes
• Mining and processing 1.1Mtpa of feed from Black Swan could deliver free cash flows of $333 million with a pre-tax NPV8 of $248 million and IRR 103% at the current Australian dollar nickel price
• Combined Black Swan Ore Reserves1 are 3.5Mt averaging 1.0% Ni for ~35kt Ni contained nickel
• The Study assumes milling 5.0Mt feed over four years to produce 200kt concentrate containing ~30kt nickel
• Black Swan can produce a high-grade nickel concentrate with ~15% Ni, < 6% MgO and a Fe:MgO ratio of 5:1 which is highly desirable for conventional nickel smelters
• Estimated C1 unit cost of ~US$4.50/lb and All in Sustaining Costs of ~US$4.90/lb (Ni in concentrate before smelter deductions)
• Existing infrastructure means a low pre-production capex of ~$50 million compared to a greenfields operation, which includes $38 million for refurbishment of the Black Swan concentrator
• Significant carried forward tax losses of up to $187 million could be utilised
• ESG focus embedded into the Feasibility Study process, carbon emissions reduced compared to 2018 Feasibility Study by using grid power
• The Company is progressing discussions with potential offtake and financing partners to achieve Final Investment Decision (FID)
• Prefeasibility Study on the 2.2Mtpa ore feed option to produce rougher concentrate (the Expansion Project) is being updated.

EXPLORATION

Work recently undertaken by our exploration team in conjunction with geological consultants Newexco Exploration Pty Ltd (Newexco) identified several exploration targets that warrant follow up (priority targets are displayed in diagram below).