Poseidon Nickel Ltd. has reported the results of a definitive feasibility study for its Windarra nickel sulphide project near Laverton, Western Australia. The project includes redevelopment of the previously mined Mount Windarra underground mine and development of a new underground mine based on the Cerberus deposit 10.5 km to the south.

Poseidon NL discovered nickel at Mount Windarra in 1969 and began developing the project, initiating the 1970s nickel boom in Western Australia. Western Mining purchased the project from Poseidon NL, completed development, and produced about 80,000 mt of nickel in concentrate from Mount Windarra between 1974 and 1990, when the mine was shut down due to low nickel prices.

Niagara Mining acquired the Mount Windarra property in 2006 and renamed itself as Poseidon Nickel Ltd., the current company, to honor the original discoverers.

The current Windarra project benefits from existing Mount Windarra infrastructure, including a vertical hoisting shaft approximately 460 m deep and the associated surface head frame, winder and ore haulage bins. Existing underground facilities include a crusher chamber and associated infrastructure. Poseidon has rehabilitated the mine’s access decline with the objective of accessing underground drilling positions to a depth of approximately 425 m below surface.

The feasibility study proposes parallel mining of the Mount Windarra and Cerberus orebodies in an approximate life-of-mine ratio of 3:2 to supply feed to a new flotation concentrator at the Mount Windarra site. The plant will have approximately 30% more nameplate capacity than required for the proposed mine throughput of about 700,000 mt/y to allow for increased mining rates that might be possible based on ongoing near-mine and regional exploration.

Production is expected to average 9,600 mt/y of nickel contained in concentrate over a mine life of 10 years. An adjacent gold-processing facility will produce more than 45,000 oz of gold during the first three years of operation.

Operating costs will average $3.35/lb of nickel, net of gold credits. The total pre-start capital cost for the project is estimated at A$197 million.

The Windarra project has combined indicated and inferred resources totaling 9.27 million mt, grading 1.56% nickel and containing 144,400 mt of nickel metal.

The gold processing plant will retreat gold tailings that were deposited at the site from local mines during the 1980s and 1990s. The tailings will be recovered by hydraulic mining. The slurry will be pumped to a thickener and then to a bank of conventional carbon-in-leach tanks to recover the gold onto activated carbon. This carbon will be removed from the slurry, washed, bagged and trucked to a custom carbon treatment plant in Kalgoorlie.

The overall construction time for Phase 1 of the Windarra project is estimated at 56 weeks for the nickel sulphide concentrator plant and 48 weeks for the gold plant, with commissioning commencing immediately after construction. Existing site infrastructure, including village accommodation, kitchen, dry mess, office areas, process and potable water, electrical power, and access roads, will ensure that the project construction can begin immediately after closing of the financing for the project.

The Windarra nickel sulphide concentrator is expected to produce a high-quality, smeltable concentrate suitable for the major nickel markets around the world. The definitive feasibility study is based on shipment of containerized concentrate through Fremantle Port to export markets; however, more efficient bulk options are being assessed. Poseidon has received several offers for concentrate off-take from smelters and commodity traders that meet or exceed the payable pricing terms used in the definitive feasibility study and that remains under negotiation.