Poseidon identifies new Lake Johnston mineralised zone

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THE DRILL SERGEANT: Poseidon Nickel (ASX: POS) has received assays for 29 underground diamond drill holes undertaken at the company’s Lake Johnston project, prior to its acquisition.

The company claims the latest results will increase the potential life of the mine and enhance the profitability of the intended restart.

The drilling was carried out before the mine closed in order to explore beyond the known extent of the current mineralised zones at Maggie Hays and was mostly in the southern and northern ends of the ore body.

The upshot has been the identification of mineralised extensions.

Drilling highlights include:

Western Zone:
4.29 metres at 3.51 per cent nickel;

2.96m at 2.09 per cent nickel;

2.55m at 1.92 per cent nickel; and

2.39m at 1.3 per cent nickel.

Suture Zone:
17.77m at 1.48 per cent nickel;

17.84m at 1.39 per cent nickel;

9m at 1.38 per cent nickel; and

5m at 3.23 per cent nickel.

North Shoot
4.05m at 2.38 per cent nickel;

9.86m at 1.55 per cent nickel, including 3.9m at 2.47 per cent nickel;

2.64m at 3.45 per cent nickel;

5.6m at 2.68 per cent nickel; and

2.9m at 2.24 per cent nickel.

“The drilling in the southern end of the deposit was particularly targeting newly identified mineralisation to the west of the known ore body,” Poseidon Nickel said in its ASX announcement.

“This mineralisation is now recognised as being remobilised nickel sulphide associated with a large scale basal fault which runs under the main Maggie Hays ore body and through the middle of North Shoot.

“Drilling at Maggie Hays also concentrated on defining extensions within the North Shoot and infilling data.

“The drilling consistently intersected potentially economic extensions to the mineralised zone.

“This is likely to lead to an initial mine life significantly beyond that previously expected by Poseidon.

“The drilling also indicates that further extensions to the ore body are likely when follow up drilling is undertaken.”

In a resource estimate released in December 2014, the North Shoot was all categorised as Inferred resource.

Poseidon intimated the amount of drilling carried out at the time warranted a much better result.

“It was identified that survey errors existed in the database resulting in misalignment of the model with the development, resulting in low geological confidence in the resource modelling,” the company said.

“These survey errors have now been corrected. In addition 100 drill holes were identified as missing from the database and the data for these have now been located.”

Poseidon is now in the middle of a resource re-estimation, which it anticipates should result in the majority of the North Shoot being upgraded to Indicated resource category or higher.

The company has also kicked off a detailed mine planning and scheduling program, which will examine maximising the ore extraction and redeveloping the mine infrastructure to better access the ore zones.

This work is expected to be complete in March 2015, some three months ahead of the original schedule.

Email: admin@poseidon-nickel.com.au

Website: www.poseidon-nickel.com.au