PERTH (miningweekly.com) – Nickel developer Poseidon Nickel has struck a binding heads of agreement (HoA) with services provider Green Gold Projects over the Windarra gold tailings project.

Green Gold Projects specialises in funding, developing and operating tailings projects, and has in-house technology with the potential to further enhance the economics of the tailings project.

The binding HoA 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, Poseidon MD and CEO Peter Harold said.

“This agreement is a significant milestone in the company’s strategy to monetise the Windarra gold tailings project. Green Gold Projects is an experienced developer and operator and is currently active in 30 projects globally,” he said.

“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,” said Harold.

Poseidon will receive a total of A$1.25-million and an 8% free-carried profit interest, should Green Gold proceed with the development of the project.

The Windarra gold tailings project consists of the Windarra and Lancefield tailings, with a combined mineral resources of 5.96-million tonnes at 0.84 g/t gold and 2.10 g/t silver, containing 180 000 oz of gold.

A definitive feasibility study (DFS) was completed by Poseidon in 2021, investigating the use of two different mining methods and the construction of a modular 1.5-million-tonne-a-year processing plant to recover up to 55 000 oz of gold over a 45-month period. The economic analysis indicated a robust project with a net present value of A$20-million and an internal rate of return of 45% to 50%, depending on the mining method and assuming a gold price of $1 750/oz.