Poseidon Nickel has outlined in a definitive feasibility study that its Windarra tailings project in Western Australia could produce up to 55,200 ounces of gold in under four years.
The Windarra project is comprised of the Windarra gold tailings mineral resource and the Lancefield gold tailings mineral resource.
According to the definitive feasibility study (DFS), Windarra could produce 55,200 ounces of gold over a 45-month period using low-cost, low-risk tailings mining methods and a 1.5-million-tonne-per-annum processing facility.
Windarra’s ore reserves are 5.54 to 5.73 million tonnes, with a grading of 0.84 grams per tonne of gold and 2.1 grams per tonne of silver for approximately 150,000 ounces of contained gold and 375,000 ounces of contained silver.
Poseidon managing director and chief executive officer Peter Harold said the company will be looking for another entity to put Windarra into production.
“The results from the DFS demonstrate a robust and profitable project retreating the gold tailings at Windarra and Lancefield,” he said.
“The gold tailings present a project which can generate positive cash flows to be invested into our nickel business, which is our primary focus.
“The tailings project would be ideal for a partnership-style arrangement or an outright sale. We will be actively looking for a high-quality partner to work with to bring this project into production or a party to acquire the project so we can monetise the asset for Poseidon shareholders.”
According to Poseidon, the development capital cost will be between $25.8 to $25.9 million subject to mining method.
Poseidon expects to pay back the costs within 27-28 months from the start of production.
Using dredging mining, Poseidon has determined a net operating cashflow of $30.6 million at Windarra and a net present value of $21.7 million.
The project’s all-in sustaining cost (AISC) is $1393 per ounce.
The DFS has incorporated the Lancefield mineral resource within its production profile and applied gold-leaching technology, investigating two mining options to reclaim Windarra’s gold tailings.
Poseidon has received ministerial approval to renew the Lancefield license to treat tenure.
Environmental approval for the Windarra project has also been received and is conditional upon the submission of an approved mining proposal within six months.
The company has also completed a scoping study on the capital and operating expenditure for the Black Swan nickel project in Western Australia.
GR Engineering Services completed the scoping study and found the 150,000 tonne-per-annum high-grade circuit is estimated to cost $13.4 million or $15.9 million to refurbish.
Black Swan’s 1.1-million-tonne-per-annum lower-grade circuit gold be refurbished for around $22.1 million.
The company anticipates both plants would take around six months to complete the refurbishment.
Harold said the Black Swan project’s processing plants would allow the company to produce its own concentrate.
“The results from the scoping study demonstrate that both processing plants can be refurbished at a relatively low cost and in a relatively short period of time,” he said.
“This creates wonderful optionality for our shareholders as it allows us to consider producing concentrate from our high-grade resources like Silver Swan, and potentially Golden Swan, assuming the current resource drilling results in a maiden resource which can be converted to a reserve.”