Posiedon Nickel enters MOU with Lithium Australia

Lake Johnston operations

Poseidon Nickel has entered a memorandum of understanding (MOU) with Lithium Australia (LIT) to evaluate joint exploration and lithium processing at Lake Johnston in Western Australia.

Poseidon holds a portfolio of tenements in the Lake Johnston region which are prospective for lithium hosted pegmatites. The tenements are adjacent to a substantial package held by LIT for lithium exploration.

Under the agreement, the companies will consider entering a commercial agreement to explore tenements at Lake Johnston and use the Lake Johnston operations to process lithium ores and produce a saleable lithium concentrate.

The Lake Johnston operation was placed into care and maintenance by Norilsk Nickel in 2013. It is a 1.5million tonne per annum processing facility that includes three ball mills, two floatation circuits, multiple thickeners, two Labrox filters and a large concentrate storage shed.

Poseidon will retain ownership of nickel, copper and cobalt rights at Lake Johnston. It will also retain the flexibility of processing nickel via the secondary milling circuit at Lake Johnston.

If the nickel market continues to improve, Poseidon also plans to restart its Silver Swan mine as a priority.

LIT has developed intellectual property, including the SiLeach process, and has applied for patents relating to the hydrometallurgical recovery of lithium from silicates. It has progressed the design of the large scale pilot plant using Sileach at a scale of around 2000 tonnes per annum of lithium carbonate equivalent product. Lake Johnston could initially be set up to progress a 60,000 tonne plant trial to produce the volume of lithium carbonate feedstock required for the LSPP feed.

Poseidon chief operating officer Michael Rodriguez said entering an MOU with LIT represents an opportunity to combine resources, reduce costs and improve the potential for discovering commercial lithium deposits.

“This is consistent with the company’s stated strategy of establishing Lake Johnston, with all of its existing plant and infrastructure, as a central lithium processing hub,” he said.

“A lithium discovery on the combined tenement package at Lake Johnston may support a restart of the Lake Johnston operations to produce a lithium concentrate and the commercialisation of Sileach technology developed by Lithium Australia, unlocking downstream processing of lithium minerals.”

Earlier this year Poseidon signed MOUs with Empire Resources, Aphrodite Gold and Northern Star Resources to process gold ore at its Black Swan operations after announcing plans to establish the operations as a central gold processing facility.