Poseidon Nickel has inked a memorandum of understanding (MOU) with Aphrodite Gold to process the latter’s gold ores at Black Swan in Goldfields, Western Australia.
As per the terms, the nickel sulphide exploration company will farm in the Black Swan Operations and Aphrodite will farm in their gold tenements into a special purpose vehicle (SPV) which will be jointly owned 50:50 by the partners.
The gold tenements of Aphrodite are about 65kms from the Black Swan processing facility.
Poseidon intends to use the currently available plant and infrastructure at Black Swan to facilitate its transition into a major gold producer in the highly potential Goldfields area.
According to Poseidon chairman Chris Indermaur, the MOU with Aphrodite would help to untap the existing capital at Black Swan Operations in the prevailing difficult market conditions for nickel.
Indermaur added: “Black Swan offers a low capital cost entry into the gold market and could exploit the concentrator’s unique ability to process both oxide and refractory gold ores.
“Furthermore at 2Mtpa rates and 3 g/t the SPV can produce over 150,000oz per year in gold concentrate an outstanding outcome for both parties.”
Since 2009, Black Swan has been on care and maintenance owing to the global downturn for nickel.
Having a processing facility of 2.2Mtpa, the Black Swan Operations features a conventional SAG mill, two flotation circuits, five ball mills multiple thickeners, a large concentrate storage shed and three ceramic filters.
According to the partners, the gold concentrate extracted from Black Swan would be initially sold to third party refiners through an offtake agreement. However, the partners intend to install a pressure oxygen (POX) circuit on the facility later on once they get funding from cash flows.
Image: An aerial view of the Black Swan Operations. Photo: courtesy of Poseidon Nickel Limited.