Encore Minerals has approved development of the Windarra Tailings Project, triggering a $400,000 payment to Maritana Minerals and preserving the company’s exposure to future gold production through royalties. Encore will carry the project’s development and operating costs, although key execution milestones remain ahead.
- Encore approves Windarra Tailings Project and enters Development Period
- Maritana receives $400,000 non-refundable payment
- 3% Windarra and 1.5% Lancefield net smelter royalties retained
- Encore assumes funding, development, operating and rehabilitation responsibilities
- Nickel tailings processing deferred until market conditions improve
Encore approves Windarra tailings development
Maritana Minerals Limited (ASX:MRT) has secured a potentially valuable outcome from a non-core asset without taking on the bill for its development. Encore Minerals has made a positive Final Investment Decision on the Windarra Tailings Project and exercised its option to enter the Development Period, covering the proposed retreatment of gold tailings from Windarra and Lancefield in Western Australia.
The decision triggers a $400,000 non-refundable payment to Maritana’s wholly owned subsidiary Poseidon Nickel. That payment was made on or before 30 July 2026, according to the announcement, while the company’s total staged cash entitlement under the agreement is $1.25 million, including payments received since the agreement was signed in 2024.
Royalty exposure comes without project capital
Encore is responsible for funding, developing, operating, closing and rehabilitating the project. In return, Maritana retains a 3% net smelter return royalty on production from the Windarra tailings and a 1.5% royalty on material sourced from Lancefield, located about 17 kilometres away. The structure gives Maritana ongoing exposure to any production while limiting its direct capital requirement, although royalty income remains dependent on the project being built and operated successfully.
The project is expected to use Draslovka’s proprietary Glycine Leaching Technology. Encore has provided an Updated Definitive Feasibility Study, which Maritana says confirms the technical and economic viability of the gold project. The company has not presented the updated study’s detailed production, cost or capital figures in this announcement.
Gold moves ahead while nickel waits
The earlier 2021 feasibility study outlined an ore reserve of about 5.5 million tonnes containing approximately 150,000 ounces of gold, with potential production of 53,500 to 55,200 ounces over an initial 45-month period. Those figures are historical study estimates rather than new guidance in this announcement. Maritana says the Australian dollar gold price is now materially above the assumptions used in that study, which it expects to improve the project’s economics for Encore and the royalty holder.
Nickel tailings from the central dam are not part of the immediate development decision. The parties have agreed to consider that material if nickel market conditions improve, with terms still to be negotiated in the full-form agreement. The timing of the $1.6 million rehabilitation bond contribution has also changed: it is now due when that agreement is executed rather than at the start of the Development Period.
Development milestones now carry the story
For Maritana, Windarra becomes a potential stream of staged payments and royalty income while management concentrates on its broader gold portfolio and the Black Swan Processing Hub. The immediate questions are less about the headline FID than about execution: completion of the full-form agreement, payment of the rehabilitation bond contribution, permits, construction timing and whether the updated study changes the historical production assumptions.
Bottom Line?
The FID improves Maritana’s exposure to Windarra at limited direct capital cost, but the value of the royalty remains tied to Encore converting approval into construction and production.
Questions in the middle?
- When will the full-form agreement be executed and the $1.6 million rehabilitation bond contribution paid?
- What production, capital and operating assumptions are contained in Encore’s Updated Definitive Feasibility Study?
- Can Encore progress gold processing on schedule, and could improved nickel prices later bring the central-dam tailings into the project?