Encore Minerals, a subsidiary of Draslovka, has entered into an agreement with Poseidon Nickel to retreat and monetize gold and nickel tailings at its Windarra project in Western Australia. The project will use Draslovka’s glycine leaching technology, including the GlyCat process for precious metals and the GlyLeach process for base metals, to recover gold and nickel from legacy tailings at its Windarra property and potentially another resource at Lancefield.
Encore is a Perth-based company that provides resource development strategies. It is a wholly owned subsidiary of Mining and Process Solutions Pty Ltd, another Perth based company that owns several patented processing technologies including glycine leaching technology, which 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.
The agreement outlines the proposed staged framework agreement with Encore Minerals for the processing of the Windarra Tailings, with a final agreement to be entered into upon the completion of their test work. Pursuant to the Agreement, Poseidon will receive a total of $1.25 million in cash, a net smelter return royalty of 3% on production and $1.6 million towards the existing rehabilitation bond. The funding, development, operation, closure and rehabilitation of the project will be the responsibility of Encore Minerals. The agreement is conditional on Encore Minerals being satisfied during the initial due diligence period, FIRB and other regulatory and third party approvals (if required).
“Once unconditional, this agreement will provide the basis for a mutually beneficial relationship for the Poseidon and Encore to develop and monetize the Windarra tailings,” said Brendan Shalders, CEO, Poseidon.
Previous metallurgical test work for the Windarra tailings project had shown potential improvement in recoveries and costs for the site’s gold resources. The test work also established the potential for a technical, economically viable and low-intensity process for recovery of nickel from nickel tailings. A previous feasibility study for the gold resource using conventional cyanidation showed net operating cashflow of A$30.6 million ($20.8 million), Net Present Value (NPV8) of A$21.7 million ($14.7 million) and an Internal Rate of Return (IRR) of 50.6%, assuming a gold price of A$2,500/oz ($1,695.50/oz).
“We are excited to play an integral role in enabling the retreatment of tailings at the Windarra project,” said Ivor Bryan, chief technology officer for Draslovka Mining Process Solutions. “Glycine leaching is revolutionary for the mining industry. It has the potential to save mining companies billions of dollars by significantly reducing processing costs, enhancing a mine’s sustainability profile, extending mine life by lowering the cut-off grade and unlocking value hidden in a mine’s tailings.”
The agreement provides for Encore Minerals to update the DFS to include both gold and nickel tailings at Windarra, and depending on project economics, may include the Lancefield gold tailings. The next step is to undertake a technical program to optimize the project with both the gold and nickel resources, which will lead to an updated feasibility study and a final investment decision. If successful, the project will lead to the construction of the first GLT processing plant for tailings.
Bryan said he believes the results at Windarra will be a powerful example of how glycine leaching is a simple, yet very effective means to retreat and monetize tailings.
