PERTH (miningweekly.com) – A prefeasibility study (PFS) into the Windarra gold tailings project, in Western Australia, has proven positive, prompting ASX-listed Poseidon Nickel to launch a definitive feasibility study (DFS) on the project.

The PFS estimated that the Windarra gold tailings could produce some 44 000 oz of gold based on the processing of the North and South tailings dams, using a low-cost hydraulic mining and a new conventional 1.5-million-tonne-a-year cyanidation-leach processing facility.

The project is estimated to require a capital investment of A$24.6-million, and would generate revenues of A$112.3-million at a C1 cash cost of A$1 209/oz recovered.

The PFS estimated that the tailings project would have a pre-tax net present value of A$22.8-million and an internal rate of return of 62.4%.

“We are looking at the opportunity to capitalise on the strong Australian dollar gold price environment and unlock the value of the in-situ gold tailings resource at Windarra,” said Poseidon Nickel MD Peter Harold.

“Given the proximity of the existing infrastructure at Windarra, we have evaluated the gold tailings project on the basis of using low-cost hydraulic mining, combined with a straightforward cyanidation-leaching processing flowsheet to produce gold dore on site.

“Collectively, these factors result in a low technical risk, low capital and operating cost framework that demonstrates attractive project economics.”

Harold said that the positive outcomes have allowed Poseidon Nickel to expedite the next step of completing a DFS, which will be finalised early in the fourth quarter of 2020.

“By monetizing the gold resource, we could unlock the value and provide a low risk platform that supports our broader corporate goal of returning Poseidon to nickel production,” Harold said.

“Given the generic nature of the processing equipment used for the gold tailings, we expect that the gold plant could be re-purposed for nickel tails leaching at Windarra or Black Swan after completion of the project.”