ASX-listed Poseidon Nickel has reported an initial mineral resource of 13 000 t of contained nickel for its Silver Swan deposit, in Western Australia.

The resource was based on 106 600t of ore, grading 12.20% nickel.

Poseidon said on Thursday that average grades at the Silver Swan deposit were believed to be twice as high as the next highest grade mine in the world, with the company saying that the ore body could be economic even at low commodity prices.

High-grade extensions to the current resource were expected when further exploration drilling was completed underground.

Poseidon was forced to consider alternative development options for the Silver Swan project after a sales agreement with Caeneus Minerals fell through in September this year.

The miner was now convinced that careful selection of the correct mining approach to minimize costs, could make mining economic even at current nickel prices.

The high-grade nature of the Silver Swan ore meant that it could be directly shipped without the need for processing through a concentrator, which Poseidon said would significantly reduce restart capital costs and the development time for the project.

• [Editor:Juan]