Maritana Minerals has turned a historical gold-rich waste dump into a future revenue stream, locking in a deal with development partner Encore Minerals to deliver immediate cash and a long-term production royalty from its Windarra Tailings project in Western Australia’s northeastern goldfields.
The company says Encore has made a positive final investment decision (FID) to proceed with the project's development, triggering a non-refundable $400,000 cash payment to Maritana.
The agreement will see Encore fully fund and operate the reprocessing of gold tailings from Maritana's historical Windarra and nearby Lancefield sites, 18 kilometres northwest of Laverton. In return for the green light, Maritana will receive a three per cent net smelter return royalty on gold produced from the Windarra tailings and a 1.5 per cent royalty from the Lancefield material, all at no capital cost to the company.
The agreement also includes a $1.6 million contribution from Encore towards the existing rehabilitation bond for the Windarra site. All up, Maritana is set to receive total cash payments of $1.25 million under the arrangement, including $250,000 received on execution of the agreement in July 2024, $100,000 received upon exercise of the extended testing period in July 2025 and the $400,000 secondary development period consideration.
Encore, part of the Draslovka group of companies, plans to use its proprietary and environmentally friendly Glycine Leaching Technology (GLT) to extract gold from the old tailings. The method employs glycine, a non-toxic and biodegradable amino acid, as a leaching agent. The solvent can slash cyanide consumption by up to 80 per cent, dramatically reducing processing costs and with it, the deleterious chemical footprint that comes with cyanide use.
A definitive feasibility study (DFS) was completed by Poseidon Nickel in 2021 - before its transformational merger with Horizon Minerals, now rebranded as Maritana Minerals - which outlined an estimated ore reserve at the project of 5.5 million tonnes containing about 150,000 ounces of gold.
With the Australian-dollar gold price sitting at A$6112 today, the timing of the Windarra tailings re-treatment deal looks astute. On July 23, 2021, the date of the DFS, the Aussie gold price sat around A$2400, a stark contrast to today's price and one which should bolster the project’s economics for Encore and enhance the value of Maritana’s ongoing royalty.
Poseidon's original 2021 DFS study assumed a base case gold price of A$2500, with economic analysis indicating a robust project with an NPV of an estimated A$20 million and IRR of 45-50 per cent, depending on one of two mining methods examined - amphibious dredging or hydraulic mining. The analysis assumed a gold price of US$1750 per ounce and an exchange rate of 75 cents, which equated to an Aussie gold price of $2333 per ounce.
Maritana Minerals managing director and chief executive officer Grant Haywood said: “The positive Final Investment Decision by Encore is a strong endorsement of the value remaining in the Windarra tailings and an important milestone in our strategy of unlocking value from every part of our asset portfolio.”.. "Importantly, Windarra remains a highly prospective gold district. We will continue to develop the gold prospectivity of the broader Windarra tenure and to evaluate all options for the Windarra assets to deliver further value for shareholders.”
Encore's updated internal DFS has further confirmed the project's viability. The total tailings resource now comprises the combined Windarra and Lancefield footprint, which holds a gold resource of 186,000 ounces. The new study has also converted almost the entire resource into an ore reserve, locking in a baseline of 5.54 to 5.73 million tonnes of material for re-treatment.
The move to monetise the tailings is a key part of Maritana’s strategy to streamline its portfolio and fully focus on its core ambition of becoming a 100,000-plus ounce-a-year gold producer by refurbishing the company's Black Swan gold processing hub, 40 kilometres northeast of Kalgoorlie. First gold from the new hub is slated for the second half of 2026.
Interestingly, the Windarra site itself is steeped in WA mining lore, having been at the epicentre of the infamous Poseidon nickel boom back in 1969. In a case of back to the future, the agreement with Encore also keeps the nickel door ajar, providing a pathway to process tailings from Windarra’s central dam should an improving nickel market make the economics stack up.
While Maritana hasn't fully retained the independent right to shop the nickel tailings elsewhere, it has protected itself by ensuring that any future nickel processing will require new mutually commercial terms once economic indicators bounce back.
With some market analysts now forecasting a potential nickel supply deficit in 2026 after recent global supply disruptions, that option could prove valuable in time. For now though, gold remains firmly first cab off the rank, with current market conditions making the precious metal tailings the clear priority.
By turning the legacy of past operations into a future-facing cash and royalty stream, Maritana has executed a tidy piece of business and housekeeping. It has cleaned up a non-core asset and shored up its balance sheet, allowing management to zero in on the grand prize of firing up its own major gold processing operation at Black Swan, with a nice free-carried tailwind to help push it along.
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By Doug Bright
