Poseidon Nickel : Significant High Grade Nickel Intersection at Emily Ann North

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25th January 2016‌

Significant High Grade Nickel Intersection at Emily Ann North

Highlights

• Significant nickel sulphide mineralisation has been intersected in the second drill hole of the Emily Ann Extension drill programme at Lake Johnston

  
  

• Drill hole PLJD0002 intersected a 10.48m wide zone of nickel mineralisation grading 3.20% Ni, containing 5.72m at 4.66% Ni and 1.29m @ 10.22% Ni

  
  

• This intersection is located 360m from the existing flooded decline in the Emily Ann underground mine

  
  

• Lake Johnston was host to the Emily Ann deposit which averaged a resource grade of 4.1% nickel and produced 46,000 tonnes nickel

  
  

• The 1,500m diamond drilling programme was 50% co-funded by the West Australian Government's Department of Mines and Petroleum (DMP) via its Exploration Incentive Scheme (EIS) grants

Poseidon Nickel Limited (ASX:POS or the Company) is delighted to announce that significant nickel sulphide mineralisation has been intersected during the recent diamond drilling program, targeting an area 360m north of the Emily Ann mine within the recently purchased Lake Johnston Project.

The discovery of this new lens has the potential to develop into an economically viable project as it is located close to the existing Emily Ann Mine infrastructure and the Lake Johnston nickel concentrator. This opens up further opportunities for mineralisation to be discovered in other structurally favourable positions along the belt.

Poseidon acknowledges the West Australian Department of Mines and Petroleum for sponsoring the drilling via the Exploration Incentive Scheme co-funding grant. The EIS grant will contribute up to $150,000 towards drilling costs representing about 50% of the total investment.

POSEI DON NI C KEL LI M I TED  Unit 8  Churchill Court  331-335 Hay Street  Subiaco  WA 6008

PO Box 190  West Perth WA 6872  T [phone]  F [phone]  www.poseidon-nickel.com.au  ABN 60 060 525 206

The first drill hole of the programme, PLJD0001, intersected a 19cm high grade zone of remobilised nickel sulphide grading 10.20% Ni. A downhole electro-magnetic survey (DHEM) was completed and generated a strong off-hole anomaly close to the hole. Poseidon's geologists in conjunction with Newexco Services Pty Ltd (consulting geoscientists) completed detailed structural, geological and geophysical modelling of the data to target the source of the remobilised sulphides.

The second drill hole, PLJD0002, targeted a geologically & structurally favourable area 45m below PLJD0001 and intersected a new lens comprising 10.48m of massive, stringer and disseminated nickel sulphides grading 3.20% Ni in an intrusive pyroxenite ultramafic between 432.00m to 442.48m downhole depths. This intersection includes a lower massive sulphide unit comprising 2.32m at 7.62% Ni from 439.09m and includes 1.29m

@ 10.22% Ni from 440.12m.

A complete nickel sulphide intersection summary is tabulated below.

Table 1: Nickel Sulphide Intersection Summary

Hole ID	From_m	To_m	Width	Ni Grade	Details
PLJD0001	435.39	435.58	0.19	10.2%	Remobilised massive sulphide in felsics
PLJD0002	432.00	442.48	10.48	3.20%	Felsic, ultramafic and remobilised sulphide in hw & fw
incl	435.69	441.41	5.72	4.66%	Mineralised Ultramafic Interval
incl	439.09	441.41	2.32	7.62%	Lower Massive Zone
incl	440.12	441.41	1.29	10.22%	High Grade base

Table 2: Drill Hole Details

Hole ID	East_MGA	North_MGA	RL	Dip	Azimuth	EOH Depth
PLJD0001	262766.6	6434776.7	1357	-65.0	247.6	513.80m
PLJD0002	262767.5	6434777.0	1357	-70.6	250.3	478.54m
PLJD0003	262766.5	6434778.0	1357	-70.5	260.0	495.10m

The figures below (Figures 1-3) show the nickel sulphide intersections from PLJD0001 & PLJD0002 within the core trays prior to sampling. The third and final hole in the drilling programme PLJD0003, has just been completed and geological as well as geophysical logging of the hole is in progress.

Mr Neil Hutchison, General Manager of Geology said, "I have not seen nickel sulphide intersections of this quality, grade and thickness since my time at Cosmos drilling the Alec Mairs, Propsero & Tapinos Deposits. This is an impressive intersection and is the culmination of considerable high quality scientific work between our Geology team and Newexco. It opens up many opportunities around the historical Emily Ann Mine and will hopefully lead to the discovery of an economic deposit."

Figure 1: Narrow stringer of remobilised nickel sulphide grading 10.2% Ni in PLJD0001

Figure 2: High grade massive nickel sulphide (pentlandite) intersected in PLJD0002 (439.6- 440.8m depth) 350m north of Emily Ann mine

The sulphide comprises nickel bearing pentlandite within a pyrrhotite sulphide matrix. The sulphides are hosted within an intrusive pyroxenite ultramafic sill which demonstrates pyroxene cumulates within its core and sulphide settling at its base. The upper and lower margins exhibit chill zones and alteration halos where it has come into contact with the earlier in-situ felsic rhyolitic and rhyodacitic volcanic tuffs which host the ultramafic intrusion (Figure 3). The felsic volcanic rocks have been overturned during earlier regional deformation, however the ultramafic sill is right-way up and cross-cuts stratigraphy, contradicting the historical recumbent folding model previously used to explain the Emily Ann ore body.

Figure 3: Complete intersection of massive, stringer and disseminated nickel sulphides within pyroxenite ultramafic in PLJD0002 (432.0m-443.0m)

The timing of Emily Ann is different to that of Maggie Hays (4km southwards). The mineralisation and host rocks at Maggie Hays are now overturned, as are the felsic country rocks at Emily Ann. However, the ultramafic and sulphides intersected in PLJD0002 are not overturned.

Maggie Hays was formed shortly after the deposition of an overlying sulphidic chert horizon from which the ultramafic intrusion sourced its sulphur to form nickel mineralisation during komatiitic volcanism. Emily Ann was formed after the volcanic sequences were overturned and after the emplacement of the large scale mineralised Maggie Hays intrusion.

The pyroxenite in PLJD0002 does not have the chemistry to support sulphur saturation, therefore it must have been derived from a late stage, lower-fractionated magma chamber (Voisey's Bay Model). Previous studies have indicated the source of the sulphides is "komatiitic" (sourced from sulphides on the sea floor).