The company, which estimates reserves of 150,000 ounces gold grading 0.84 grams per tonne gold and 375,000oz silver at 2.1gpt remain from prior operations at Windarra and Lancefield by Western Mining Corporation, estimates some 55,000oz gold dore can be recovered over four years using low-cost, low-risk tailings mining methods at all-in sustaining costs of $1393/oz.
It would require spending $24 million of the total $26-30 million development to construct a 1.5 million tonne per annum carbon-in-pulp plant. The plant would be modular, and relocatable.
The DFS shows net operating cashflow of $30.6 million, a net present value of $21.7 million, and internal rate of return of 50.6%, with slightly better numbers if using a residual value assessment.
Payback would be 2.5 years from the start of construction. Development would take about nine months.
Poseidon boss Peter Harold said thee DFS delivered robust and profitable project retreating the gold tailings at Windarra and Lancefield, which could generate profits to reinvest into the nickel business.
Given Silver Swan/Golden Swan is its main concern, he said the tailings development would be best pursued with a suitable partner, or via an asset for sale.
The project would use the existing South Windarra pit for final tailings disposal.
Poseidon has been working on the project for the past 12 months.
Shares in the company were up 17% in early trade to 12.7c, a 12-month peak. The stock was at 2.6c 12 months ago. The company was valued at $351 million.
