Poseidon Nickel‘s (ASX:POS) agreement with Perth-based technology company Encore Minerals to develop the gold and nickel tailings at the Windarra Tailings Project in Western Australia is now unconditional.
On 31 July 2024, both companies entered into an agreement to develop the gold and nickel tailings, which will be developed using Draslovka’s proprietary Glycine Leaching Technology and other patented technologies.
Under the agreement, Encore is responsible for funding, developing, operating, closing, and rehabilitating the Windarra Tailings Project. The agreement was subject to various conditions, including Encore conducting due diligence and other conditions which have now been satisfied or waived.
Poseidon Nickel, which has a market capitalisation of $21 million, says Encore is progressing Feasibility studies based on using Glycine Leaching Technology and other patented technology.
The outcomes from these studies will support potential development of the project.
As part of the agreement, Poseidon received an upfront non-refundable payment of $250,000 upon signing and starting the testing period. It is a staged framework agreement with final agreement to be entered into upon completion of testwork.
Poseidon will receive a total of $1.25 million, a net smelter return royalty of 3% on production and $1.6 million towards the existing rehabilitation bond.
The agreement also provides for Encore to update the project’s Definitive Feasibility Study (DFS), incorporating gold and nickel tailings at Windarra, and depending on project economics, may include the Lancefield gold tailings.
Previously conducted testwork on Draslovka’s Glycine Leaching Technology confirmed a potential improvement in the gold recoveries from the Lancefield tailings samples and the potential to also extract nickel from the Windarra tailings.
The Windarra Tailings Project is located 720km north-east of Perth in Western Australia. It is serviced by sealed roads from Kalgoorlie via Leonora to Laverton.
Poseidon Nickel is a nickel sulphide explorer and developer focused on its three projects that are located within a radius of 300km from Kalgoorlie in the Goldfields region of Western Australia. The company has a resource base that totals 420,000 tonnes of nickel and 180,000 ounces of gold.
Write to Aaliyah Rogan at Mining.com.au
Images: Poseidon Nickel
