Poseidon Nickel has entered a non-binding memorandum of understanding (MOU) with Aphrodite Gold to process Aphrodite’s gold ore at its Black Swan operation in Western Australia.
Black Swan, located around 50km northeast of Kalgoorlie, has been in care and maintenance since 2009 following the global commodity downturn and Poseidon plans to use its existing plant and infrastructure to help transition the company into a major gold producer in the Goldfields region.
Poseidon chairman Chris Indermaur said both companies had been in discussions for six months before deciding on the MOU. Under it, Poseidon would farm in the Black Swan operations and Aphrodite would farm in their gold tenements to a special purpose vehicle (SPV) in a 50:50 joint ownership structure.
“Entering into an MOU with Aphrodite unlocks existing capital at Black Swan operations in what continues to be a very difficult nickel market,” Poseidon chairman Chris Indermaur said.
“It is however important to stress that when the nickel market does improve, nickel production at Black Swan can restart via a parallel and independent circuit.”
Indermaur added that Poseidon would retain all nickel ore at Black Swan and the Silver Swan underground mine.
Black Swan is a 2.2 million tonne per annum (Mtpa) processing facility that includes a conventional SAG mill, five ball mills, two flotation circuits, multiple thickeners, three ceramic filters and a large concentrate storage shed.
With the addition of a carbon in leach (CIL) circuit the processing plant is able to process nickel, oxide and refractory gold ores.
Aphrodite’s gold tenements are located around 65km trucking distance from the Black Swan process plant’s run of mine (ROM) stockpiled ore.
Gold concentrate produced at Black Swan will initially be sold to third party refiners, however the companies are planning to install a pressure oxygen (POX) circuit, which will establish a central and unique refractory gold processing facility in Goldfields region.
“As the discovery of oxide orebodies slows in and around the Goldfields area the importance of refractory orebodies will grow as a significant source of known gold resources remaining. Therefore establishing a refractory gold processing facility is an important strategic decision,” Poseidon Nickel said.
“Poseidon has over 10 years of operating “in-house” POX expertise for the processing of concentrates and would be pleased to join with Aphrodite to construct the first POX plant in the Kalgoorlie region.”