Poseidon Nickel (ASX: POS) has signed a binding Heads of Agreement (HoA) with Green Gold Projects Pte Ltd (GGP) for the processing of the Windarra Gold Tailings Project in Western Australia.
“This agreement is a significant milestone in the company’s strategy to monetise the Windarra Gold Tailings Project,” Managing Director and CEO, Peter Harold, said.
“Green Gold Projects is an experienced developer and operator and is currently active in 30 projects globally. The binding Heads of Agreement outlines the proposed partnership with Green Gold for the processing of the Windarra Gold Tailings Project, with a final agreement subject to Green Gold being satisfied with the outcome of metallurgical testwork and a bankable feasibility study being completed at their expense.
“Upon achieving these milestones, Green Gold will earn a farm-in interest in the Project. In return, Poseidon will receive consideration in the form of cash payments – upfront and upon project financing and a free carried profit interest of 8%.
“The funding, development and operation of the Project will be the responsibility of Green Gold. The proposed partnership with Green Gold is an ideal outcome for Poseidon given our focus on the development of our nickel projects.”
The Windarra Gold Tailings Project consists of the Windarra and Lancefield Tailings with a combined Mineral Resources of 5.96Mt at 0.84g/t gold and 2.10g/t silver, containing 180koz of gold.
A Definitive Feasibility Study (DFS) was completed by Poseidon and released in mid-2021. The DFS investigated using two different mining methods on the Windarra tailings, amphibious dredging or hydraulic mining, and the construction of a modular 1.5Mtpa processing plant to recover up to 55koz of gold over a 45-month period.
The economic analysis indicated a robust project with an NPV of circa $20 million and IRR of 45-50% depending on the mining method assuming a gold price of US$1,750/oz and an exchange rate of A$1.00 = US$0.75.
Mr Harold said while the outcome of the DFS was positive the company is focused on the restart of its Black Swan Project and decided that finding a partner to develop and operate the Windarra Gold Tailings Project was the best outcome for shareholders.
This process commenced earlier in the year and significant interest was received from various parties. Green Gold Projects was selected as the preferred partner given its experience as a developer and operator of similar projects. GGP’s patented technology has the potential to improve the economics of the Project.
For further information please visit: https://poseidon-nickel.com.au/
