Poseidon Nickel has collaborated with Encore Minerals to reprocess gold and nickel tailings at the Windarra Tailings Project in Western Australia.
The project will leverage Draslovka's GLT solution, aiming to revitalise the site with extraction methods.
Under the agreement, Encore Minerals is tasked with funding, developing, operating, and eventually closing and rehabilitating the Windarra project.
The arrangement is contingent on meeting specific conditions and milestones.
Poseidon Nickel will receive a non-refundable cash payment of A$250,000 ($163,641) upon the agreement's execution, with additional payments totalling A$1m due at the start of the development and production periods.
Once production commences, Poseidon will also earn a 3% net smelter return royalty on the project.
Encore Minerals has committed to paying Poseidon $1.6m to offset part of the $3.5m environmental bond Poseidon holds for the Windarra site.
This payment is part of the broader financial responsibilities Encore Minerals has assumed over the project's life cycle.
The Windarra Tailings Project was the subject of a DFS released by the company in July 2021.
This DFS proposed a stand-alone gold tailings reprocessing plant at Windarra, which would handle tailings from both Windarra and Lancefield.
The new agreement mandates Encore Minerals to update the DFS to encompass both gold and nickel tailings at Windarra.
Depending on the project's economic viability, this may also extend to include Lancefield's gold tailings.
Poseidon Nickel CEO Brendan Shalders said: “Once unconditional, this agreement will provide the basis for a mutually beneficial relationship for the company and Encore Minerals to develop and monetise the Windarra Tailings Project using Draslovka’s proprietary and revolutionary GLT and other technology, which has been developed to extract minerals such as gold, copper, cobalt and nickel by using amino acids such as glycine to leach tailings and ores.
“The agreement is conditional on Encore Minerals being satisfied during the initial due diligence period, FIRB [Foreign Investment Review Board] and other regulatory and third party approvals (if required).”
Last year, Poseidon Nickel obtained firm commitments to raise A$6m through a placement from institutional and sophisticated investors.
