Poseidon attracts another user for Black Swan

Poseidon Nickel is in discussions with Empire Resources for the processing of gold ore at its mothballed Black Swan processing facility near Kalgoorlie, while Empire has secured two loan deals to help pay for essential mining costs.

Empire said in a statement today that it had entered into a memorandum of understanding with Poseidon to evaluate the option of processing gold ore from its Penny’s Find mine, which lies about 50 kilometres by road to the south-east of the processing facility.

Empire is currently trucking ore to mills in Kalgoorlie and Coolgardie, which are 63km and 105km away from the mine, respectively.

Empire also said today it had entered into two loan agreements, one with Stocksonline and the other with one of its directors, for a combined $435,000 to pay for essential costs associated with mining work at Penny’s Find, on the back of delays in production flowing from the late receival of income from gold sales.

The $250,000 loan with Stocksonline bears a 12 per cent annual interest rate, plus a further 5 per cent management fee.

Empire managing director David Sargeant said the opportunity to access a toll treatment facility considerably closer than those the company currently used would result in a considerable saving on haulage costs for Penny’s Find.

“We welcome the opportunity to conduct due diligence on the Black Swan operations’ facility, which would provide us with a nearby treatment option in addition to the Kalgoorlie and Coolgardie mills,” he said.

Poseidon chief operating officer Michael Rodriguez said the company welcomed the opportunity to engage with third parties to ensure Black Swan operated at optimum throughput.

“Since announcing the company’s plans to establish the Black Swan operations as a central gold processing facility a number of third-party gold explorers and miners have expressed an interest in securing capacity at the facility,” he said.

In late August, Poseidon announced it was in discussions with Northern Star Resources to explore the use of Black Swan on a free-milling basis.

The facility, which has been on care and maintenance since 2009, has a throughput capacity of 2.2 million tonnes per annum, and includes a conventional SAG mill, five ball mills, two flotation circuits, multiple thickeners, three ceramic filters and a concentrate storage shed.

Empire shares were 4 per cent lower to 2.4 cents each at 11:45am.

Poseidon shares were 6.8 per cent higher to 3.1 cents each.