Poseidon Nickel Ltd (ASX:POS, OTC:PSDNF) welcomes finalisation of an agreement with Encore Minerals to develop the gold and nickel tailings at the Windarra Tailings Project in Western Australia using Draslovka’s a.s.’s proprietary Glycine Leaching Technology (GLT) and other patented technology.
The agreement announced on July 31, 2024, was subject to various conditions precedent, including due diligence by Encore.
Both parties have agreed that all conditions precedent set out in this agreement have been satisfied or waived and Encore has confirmed that it is satisfied with its due diligence enquiries.
Consideration
Poseidon will receive a total of $1.25 million, an NSR royalty of 3% on production and $1.6 million towards the existing rehabilitation bond with funding, development, operation, closure and rehabilitation of the project to be the responsibility of Encore.
The agreement includes an up-front non-refundable payment of $250,000 upon signing of the agreement and the commencement of a testing period, which was received in August 2024.
It is a staged framework agreement with a final agreement to be entered into upon the completion of the test work.
Improved economics
Since the release of the Windarra gold tailings DFS in July 2021, the gold price has increased from the study assumption of A$2,500/ounce to above A$4,000, which should significantly improve project economics.
Encore Minerals is now progressing with feasibility studies based on using GLT and other patented technology to process the gold tailings at Windarra and Lancefield. Outcomes from these studies will support potential development of the project.
About Encore Minerals
Encore Minerals is a Perth-based company that provides resource development strategies and includes innovative technologies and plant design with a multi-disciplined understanding of success factors in resources projects.
Encore is a wholly owned subsidiary of Mining and Process Solutions Pty Ltd, a Perth-based company that owns several patented processing technologies including the GLT, which Poseidon understands is an environmentally friendly hydrometallurgical process that leaches base and precious metal oxide, mixed oxide and sulphide ores.
In 2022, Draslovka acquired Mining and Process Solutions Pty Ltd and their patented technologies, and both companies are now part of the Draslovka group.
Originally founded in 1906, Draslovka has become a global chemicals business with agricultural, mining and speciality chemicals divisions.