Poseidon Nickel has signed memorandums of understanding (MoUs) with SulphideX and Estrella Resources for ore tolling at the Black Swan Concentrator north of Kalgoorlie in Western Australia.
Under the terms of the MOUs, Poseidon will process ore from SulphideX’s Mt Venn project and Estrella’s Carr Boyd nickel project.
The 2.2Mtpa concentrator is located with the Poseidon-owned Black Swan Operations, which is situated 55km from Kalgoorlie.
Alongside the processing plant, the operations include the Silver Swan mine and Black Swan open pit nickel mine.
Both Mt Venn and Carr Boyd projects are located in proximity to the Black Swan operations.
Poseidon will work with both companies to evaluate toll treating nickel ore mined from both Mt Venn and Carr Boyd under ore tolling and concentrate purchasing agreements (OTCPA).
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As part of the agreements, Poseidon will toll treat the ore to produce a nickel concentrate that would be purchased at rates agreed with SulphideX and Estrella.
Additionally, Poseidon will exclusively manage the sales and marketing of the concentrate.
The company intends to enhance production of the concentrator with ore from its own mines and through OTPCAs with local nickel miners.
It is looking to capitalise on the recent closure of the BHP Billiton Nickel West Kambalda concentrator and emerge as a strong alternative for nickel miners in the region.
Furthermore, Poseidon noted that it has garnered enough funds to restart the Black Swan project, which was placed on care and maintenance in February 2009 due to low nickel prices.