Lake Johnston

History

• Emily Ann - 1.5Mt @ 3.5% Ni mined and processed b/n 2001-2007 
• Maggie Hays - 10Mt @ 0.6%Ni mined and processed b/n 2008-2014

Recent exploration activities at Lake Johnston focussed on the collation of geological data and verification of geology models and targets previously generated. The work was completed by NewExco with final report, delivered during September 2021, indicating the tenements remain prospective for further nickel sulphide discoveries and prioritising targets requiring drill testing. Poseidon and NewExco have designed an exploration program to test the upper surface of the Western Ultramafic looking for Kambalda-style nickel deposits (see figure below).

The Lake Johnston project is considered highly prospective for further nickel discoveries. Future exploration works will focus on building resources to facilitate a recommencement of mining and processing operations, leveraging off the 1.5Mtpa processing plant and associated infrastructure located on site.

Future Operations & Processing Plant Refurbishment

While the Company is focused on restarting the Black Swan Project, Lake Johnston could be restarted once Black Swan is in operation. By developing a second processing hub the Company can expand its nickel production and achieve its strategic production target of at least 15k tonnes per annum nickel in concentrate.

Exploration activities are planned to grow Lake Johnston’s mineral resource and reserve, supporting a recommencement of operations. GR Engineering Services Limited (“GRES”) was engaged to provide Poseidon with capital and operating cost estimates for the refurbishment and operation of the ore treatment circuit and associated infrastructure at Lake Johnston (to a +/- 20% level of accuracy).

In January 2022 GRES estimated the capital expenditure to refurbish the plant and associated infrastructure to be approximately $31 million with an estimated refurbishment schedule of seven months, assuming power supply can be supplied and installed within this period.

GRES estimate of operating costs was $36.04 per tonne at a processing capacity of 0.9 million tonnes per annum. Ore will be treated through the existing crushing, grinding and flotation circuit of the Lake Johnston plant to produce a nickel concentrate.

Exploration

Studies on the Maggie Hays deposit and more recently on Emily Ann by Poseidon indicate both deposits were emplaced within a felsic volcanic sequence by a series of intrusive ultramafic magmas that collectively form the CUU. The CUU and felsic volcanic sequence are capped by a regionally persistent banded iron formation (BIF). The intrusive emplacement model for the deposits was recently enhanced by the discovery of significant nickel sulphide mineralisation within an interpreted narrow feeder zone to the Emily Ann deposit at Abi Rose (refer to Poseidon ASX announcements “More Nickel Sulphides Intersected at Abi Rose” dated 22 November 2018 and “Significant High Grade Nickel Intersection at Emily Ann North” dated 25 January 2016).

The Western Ultra Mafic Unit (WUU) overlies the regionally persistent BIF sequence and is interpreted to have been emplaced as a series of extruded ultramafic flows by the CUU magmas breaching through the BIF sequence.  Therefore, the basal contact of the WUU is considered a high priority target for potential economic nickel sulphide mineralisation by Poseidon that has been historically overlooked. 

The WUU structure has been identified along 17km of strike. An initial program of shallow air core (AC) and reverse circulation (RC) drilling to delineate 14km of the interpreted overturned basal contact of the WUU was completed in May 2023. A total of 157 AC holes for 5,081 metres were drilled on 32 x 400-metre spaced lines. Initial sampling was conducted based on 4-metre composites. A further 17 RC holes for 1,556 metres were drilled.

The aim of the drill program was to both map the interpreted WUU basal contact and the channelised embayed features that are prospective for the accumulations of nickel sulphide mineralisation at its base and against the basal contact position as observed in Kambalda-style nickel sulphide deposits. The deeper RC holes provide critical geochemical information about the host rock fertility beneath the weathering profile and about the mineralisation of the basal contact.

Assay results from the reconnaissance drilling along the WUU has returned coincident nickel sulphide pathfinder (Ni:Co:Cu) anomalous zones within the weathering profile at seven separate prospects, including Roundtop, Raggedy Ann, Johnny Turk, Maggie Hays North, Maggie Hays West, Windy Hill and Jaymee Ruth.

The pathfinder anomalism includes Ni > 0.4% (at times Ni > 1.0%), Cu >150ppm and Co >500ppm have also been confirmed over prospective cumulate phase ultramafic rocks at various locations along the belt.

Drillhole intercepts of >0.4% Ni from recent aircore drilling:

MAGGIE HAYS WEST

Verification of several positive attributes in the latest drilling phases have upgraded the prospectivity at the Maggie Hays West Prospect. These positive attributes include the confirmation of Ni:Cu regolith anomalism up dip from isolated historic nickel sulphide drill intersections. The drilling has also confirmed the thickening of the WUU to 300 metres on drill line 82700N (local grid) and the development of an embayed contact due to a possible channel feature.

Latest Maggie Hays West drill results include:

• PLJA075      28m @ 0.66% Ni, 187 ppm Cu from 20m
  • including 4m @ 1.32% Ni, 134ppm Cu from 40m
• PLJA076      20m @ 0.87% Ni, 157 ppm Cu from 32m
  • including 8m @ 1.18% Ni, 143 ppm Cu from 40m
• PLJA078      24m @ 0.88% Ni, 220 ppm Cu from 12m including 12m @ 1.16% Ni, 256ppm Cu from 20m
• PLJA080      4m @ 0.41% Ni, 245 ppm Cu from 28m and 4m @ 0.52% Ni, 744 ppm Cu from 36m
• PLJA081      7m @ 0.70% Ni, 588ppm Cu from 40m (EOH)
• PLJA085      12m @ 0.67% Ni, 187ppm Cu from 12m
• PLJA086      40m @ 0.65% Ni, 205ppm Cu from 24m (EOH)

Previously reported nickel sulphide intersections at Maggie Hays West include:

• LJD0003A    1.70m @ 1.59% Ni, 810ppm Cu from 329.30m*
• MHUD0551  2.55m @ 1.92% Ni, 1,344ppm Cu from 235.45m*

*Refer to ASX Poseidon announcement “New Mineralised zone identified at Lake Johnston” dated 18 February 2015 for previously reported nickel sulphide intersections. 

One RC drillhole (PLJA171) was drilled through the basal contact in the recent program at Maggie Hays West returning MgO values averaging 37% (max. 41% MgO) and Ni/Cr ratios averaging 4.3 which is indicative of fertile channel facies ultramafic cumulate rocks at the base of the thickened WUU .

Maggie Hays West - Section 83 000N (Local Grid), showing recent and historic drilling with >0.4% Ni intersections, Ni/Cu dispersion and high MgO basal flow

When all these positive attributes are collectively compiled onto a long section projection, a possible mineralised, open ended channel target can be inferred at the Maggie Hays West Prospect that is up to 400m wide and corresponds to a discrete magnetic feature. The interpretation presents a compelling high priority target that warrants further drilling.

Maggie Hays West Long Section with WUU Basal Contact intercepts plotted only. Note the inferred mineralised channel opportunity is largely untested.

Regional Targets

Drilling has also defined six other targets for follow up with anomalous nickel present near the basal WUU contact. This includes the newly identified Windy Hill and Jaymee Ruth prospects.  At Windy Hill elevated Ni:Cu trends have been intersected in close proximity to the BIF with limited drilling in the area. Significant Windy Hill intersections include:

• PLJA087      16m @ 0.55% Ni, 133ppm Cu from 28m
• PLJA091      16m @ 0.44% Ni, 152 ppm Cu from 4m and 20m @ 0.7% Ni, 112ppm Cu from 20m
• PLJA140      12m @ 0.46% Ni, 329 Cu from 8m and 4m @ 0.48% Ni, 812ppm Cu from 24m (EOH)

Similarly, the new prospect at Jaymee Ruth located in the south of the tenement holding has been identified with elevated Ni:Cu ratios at the basal contact along a 800m geochemical anomaly. Significant intersection include:

• PLJA116      8m @ 1.04% Ni, 126ppm Cu form 12mincluding 4m @ 1.23% Ni, 125ppm Cu from 12m
• PLJA124      4m @ 0.41% Ni, 199ppm Cu from 16m (EOH)

Roundtop, Raggedy Ann, Johnny Turk and Maggie Hays North prospects have all returned anomalous nickel and further assessment is required on all six prospects.

Next Steps

The results provide increased confidence in the geological setting and prospectivity of the WUU.  Further sampling of the anomalous zones to one metre re-splits have been taken to delineate the anomalous intervals and will include analysis for PGEs.  This will aid in the planning for infill and follow up drilling at the identified prospects, along with testing along the further southern 4km extension of the WUU.

Current resources & infrastructure

• Maggie Hay - 3.5Mt @ 1.5% Ni* for 52kt Ni
• 1.5Mtpa process plant (on C&M)