Name of the Project
Windarra gold tailings project.

Location
Eastern Goldfields of Western Australia.

Project Owner/s
Poseidon Nickel.

Project Description
Windarra comprises the Windarra gold tailings mineral resource contained within the North and South tailings dams and the Lancefield gold tailings mineral resource contained on license to treat tenement 700-3709.

The mineral resource comprises 4.75-million tonnes at the Windarra North and South dams grading 0.73 g/t gold, and 1.21-million tonnes at Lancefield grading 1.27 g/t gold, all classified as indicated resources.

Poseidon is considering the development and construction of the project to allow for the retreatment of historical gold tailings and the establishment of the South Windarra pit as the location for the disposal of the reprocessed final tailings.

The South Windarra pit is also the location of the source of water supply for mining and processing. The proposed development will comprise:

• a reclamation of gold tailings from the North and South dam of the decommissioned Windarra tailings storage facility (TSF) using hydraulic mining methods for processing, including the introduction of the Lancefield gold tailings through mechanical mining and haulage (by road train) from Lancefield to Windarra.
• construction and operation of a 1.5-million-tonne-a-year gold processing plant for recovery of gold and silver, and the production of doré on site.
• development of a TSF within the disused South Windarra pit, located about 13.5 km south of the Windarra site.
• construction of a 17 km tailings pipeline and water return pipeline from the process plant for the transfer of processed tailings to the western side of the South Windarra pit, and the return of process water from the eastern side of the South Windarra pit to the process plant.

Windarra gold tailings could produce from 53 500 oz to 55 200 oz of gold, subject to the mining method used over a 45-month period.

Production is expected to begin at Lancefield, which will be conventionally mined using a front-end loader, over a nine-month period. The tailings will be hauled using triple (or quad) road trains to Windarra for processing.

Subject to the mining method selected, the Lancefield tailings will either be side-tipped into a raised landform excavated trench (hydraulic mining option) or side-cast atop of the northern perimeter wall of the Windarra North dam (amphibious dredging option). The tailings will then be pumped to a conventional 1.5-million-tonne-a-year carbon-in-pulp (CIP) gold processing plant to recover the gold and silver. Once mining of the Lancefield tailings is complete, the Windarra North and South dams will be reclaimed over a 36-month period and pumped to the CIP gold processing plant.

The reprocessed tailings will be pumped through a 17-km-long pipeline and deposited into the disused South Windarra pit, which contains more than 23-million cubic metres of saline water that will be used as the main water supply for the project.

Final tailings storage is proposed to be within the disused South Windarra pit. Detailed solute transport and geochemical modelling completed over the 45-month operating phase (and 100-year post-closure) concluded that the water level of the South Windarra Pit Lake is unlikely to exceed the ambient groundwater level and it will remain a ‘groundwater sink’.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The feasibility study base case, using dredging mining returns, results in a net present value (NPV), at an 8% discount rate, of $21.7-million and an internal rate of return (IRR) of 50.6%.

Application of the residual value assessment improves the NPV, at an 8% discount rate, of $25.7-million and an IRR of 53.9%.

Capital Expenditure
The project will have a modest development cost of between A$25.8-million and A$29.5-million, subject to the mining method selected, and a payback period of between 27 and 28 months.

Planned Start/End Date
Not stated.

Latest Developments
Environmental approval for the project has been received, conditional upon the receipt of an approved mining proposal within six months.

Key Contracts, Suppliers and Consultants
Como Engineers (process plant and infrastructure capital cost estimate).

Contact Details for Project Information
Poseidon Nickel, tel +61 8 6167 6600 or email admin@poseidon-nickel.com.au