Poseidon Nickel has finalised its agreement with Encore Minerals to develop the Windarra gold and nickel tailings project in Western Australia.
Originally announced on July 31, the agreement will see Encore use proprietary glycine leaching technology (GLT), specifically the GlyCat and GlyLeach, to process valuable minerals from Windarra tailings, including gold and nickel.
The agreement was subject to several conditions, with all conditions outlined in the agreement having now been satisfied or waived.
As per the agreement, Poseidon will receive a total of $1.25 million in cash payments. An initial non-refundable payment of $250,000 was received upon the agreement’s execution, with additional payments totalling $1 million to be received upon the commencement of development and production periods. Poseidon will also earn a three per cent net smelter return (NSR) royalty on production.
Encore Minerals will contribute $1.6 million towards the environmental bond held by Poseidon for the Windarra project and will be responsible for the entire lifecycle of the project, including funding, development, operation, closure, and rehabilitation under this agreement.
Since the release of the Windarra gold tailings definitive feasibility study in 2021, the gold price has increased from the study assumption of $2500 per ounce (oz) to over $4000/oz, which Poseidon believes “will significantly improve the project’s economics”.
“Encore Minerals is progressing with feasibility studies based on using GLT and other patented technology to process the gold tailings at Windarra and Lancefield,” Poseidon said. “Outcomes from these studies will support potential development of the project.”
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