MINING STORY

✦ This particular Brilliant Investment is packed with triple the insights as we listen to three thought leaders from Poseidon Nickel Limited (ASX: POS) share their knowledge and experience. The Poseidon Trilogy begins with Peter Harold, Managing Director and CEO. Exciting news awaits as their path to production gathers pace.

Poseidon Nickel Limited (ASX:POS)

The Poseidon story began back in the 1960s and the legendary nickel boom that spiked the stock from a few cents up to over $280 before plummeting back to earth again by early 1970.

It hasn't always been smooth sailing for Poseidon - it has experienced quite a few storms on the journey to production, and it is gearing up towards a restart at a time of strong nickel price outlook due to EV revolution.

Poseidon's Mission

Poseidon is committed to becoming a sustainable nickel producer, delivering value through performance and growth. The commencement of mining and processing at Black Swan is viewed as a first step in the Company's "Fill the Mill" strategy with the stated goal of growing the business to a 15ktpa plus nickel producer over the next 5-10 years.

Poseidon’s strategic pillars are:

• developing a pathway to production

• targeted exploration across its nickel asset portfolio

• considering proximal business development opportunities.

Poseidon's Projects

Black Swan Nickel Project

c• Open pit and underground mineral resources

Windarra Nickle/Gold Projects

• Significant nickel mineral resource

• Potential to mine nickel ore and process at Black Swan

• Gold tailings resource with BFS, partner found, due diligence underway

What is Black Swan Features

• 2.2Mtpa processing plant

• Silver Swan underground 12.9kt Ni (grade - 9.5%)

This is all set to change dramatically as the company reaches a key inflection point - making a Final Investment Decision and signing Project Funding and Offtake Agreements.

Poseidon Nickel Limited (ASX Code: POS) is a nickel sulphide exploration and development company with three projects located within a radius of 300km from Kalgoorlie in the Goldfields region of Western Australia and a resource base of around 400,000 tonnes of nickel and 180,000 ounces of gold.

Poseidon owns the Windarra, Black Swan and the Lake Johnston Nickel Projects. In addition to the mines and infrastructure including concentrators at Black Swan and Lake Johnston, these projects have significant exploration opportunities demonstrated by the discovery of the Abi Rose deposit at Lake Johnston and the Golden Swan high-grade resource discovered at Black Swan in 2020.

Poseidon owns three significant nickel assets with a combined resource of over 400kt of nickel and processing capacity of up to 3.7Mtpa of ore to produce nickel concentrate. The Company’s business strategy remains focused on leveraging its existing asset base to grow Poseidon into a significant nickel producer over a period of expected significant growth in nickel demand, largely driven by growth in the electric vehicle market.

• Significant established mining and processing infrastructure

• Bankable Feasibility Study completed in November 2022

• Planning to make FID mid 2023 and production by mid 2024

Lake Johnston Nickel Project

• Strong exploration potential, exploration drilling about to commence

• Significant established mining and processing infrastructure

• Previous mining studies being reviewed

• Golden Swan underground 6.3kt Ni (grade - 3.9%)

• Silver Swan Tailings - 6.2kt Ni (grade - 0.92%)

• Black Swan Disseminated 181kt Ni (grade - 0.63%)

• Southern Terrace remains prospective for additional high grade discoveries

Project

History

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 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 in concentrate

• Silver Swan Underground - 2.7Mt @ 5.1% Ni for 138kt Ni in concentrate

• Total production 179kt Ni concentrate

Poseidon's Business Strategy

The Company’s pathway to production got a boost in FY22 with two metallurgical breakthroughs which has greatly improve the economics of the Black Swan project.

1. The first involves incorporating a rougher concentrate regrind into its process flowsheet to significantly improve the quality of the smelter grade concentrate, which has resulted in improved nickel payability.

2. The second was testwork on a combined serpentinite and talc carbonate ore blend to produce a rougher concentrate which is amenable to both pressure oxidation and high-pressure acid leach to produce a mixed hydroxide precipitate.

This culminated with the delivery of the Feasibility Study on the 1.1Mtpa project to produce high grade nickel concentrate suitable for conventional nickel smelters. Refer to ASX Release dated 21 November 2022 "Positive Black Swan Feasibility Study". The Company is now working with a short list of potential offtakers and project financiers with the aim of reaching a Financial Investment Decision during the second quarter of 2023.

With the assistance of Poseidon’s geological consultants, Newexco, the Company completed an exploration targeting report with three high priority targets identified. Newexco is now preparing a drilling program and budget to test these targets.

Other Projects

There is significant infrastructure at Lake Johnston, including a 1.5Mtpa concentrator and the Maggie Hays orebody which contains 52,000 tonnes of nickel.

A comprehensive geological review of the Lake Johnston tenements has confirmed there are numerous targets that could generate more komatiite style orebodies and there is even the possibility of finding an intrusive orebody like Nova-Bollinger. A 15,000 metre RC drilling is due to commence in April to test the Western Ultramatic unit.

At Windarra, 25 kilometres west of Laverton, there is a significant resource base of approximately 150,000 tonnes of nickel. The economics of mining ore from Mt Windarra and trucking it to Black Swan for processing is being studied. In addition, Windarra is highly rated in terms of exploration potential and it is intended to do more exploration there in the future. Newexco are preparing an exploration target report for the company.

Poseidon’s ultimate goal is to be mining ore from Black Swan, Lake Johnston and Windarra and processing these ores through mills at Black Swan and Lake Johnston to produce nickel in concentrate. The Black Swan BFS confirmed the economic viability of achieving that goal -:

The highlights from the BFS include -:

• NPV of $248M, free cashflow of $333M and an IRR of 103% at spot Ni and FX.

• Low pre-production capital – inc ~ $38M for the refurbishment (46 weeks construction).

• High grade nickel concentrate (15%) – good Fe Mg ratio – highly desirable smelter feed.

Poseidon's 3 Year Share Price

Transitioning from explorer, to having resources defined, to developer is not an easy path, especially for the share price. This graph charts that course but it looks like better times are ahead for shareholders and all associated with this attractive nickel development company.

Samso’s Conclusions

We believe POS is about to embark on that final, exciting phase of a mining company’s journey –commencing production. The long term outlook for nickel is excellent and Poseidon is virtually unique, globally, amongst all those prospective and near term producers. It has multiple existing nickel assets from average to high to super high grade ores and strong drilling exploration targets - and it has infrastructure valued conservatively at over $600 million replacement value.

The share price on the other hand, has waxed and waned at a relatively low level for more than a decade of trading, suffering from historical nickel price setbacks and this has induced a level of scepticism that, frankly, is unwarranted. Mr. Market values their shares at a paltry 3.6 cents, with a market cap of circa $120 million.

The experienced management team in place led by Peter Harold has been diligently working through all the necessary precursors to production and during that process they have unlocked enormous economic potential. It is our firm belief that Poseidon will be substantially re-rated this year and, therefore, there is a great opportunity to get in early ahead of key announcements regarding the FID and Project Funding and Offtake Agreements.