THE BOURSE WHISPERER: Lithium Australia (ASX: LIT) announced, what the company described as, “a strategic move” with Poseidon Nickel (ASX: POS).
Lithium Australia said the two companies will jointly evaluate the known lithium potential of the Lake Johnston region in southern WA as a source for feedstock supplying into a locally-sited lithium concentrate plant.
Under a Memorandum of Understanding (MoU), LIT and POS will undertake due diligence and negotiate key commercial terms to underpin a proposed final agreement to jointly explore for lithium hosted pegmatites on tenements held by both entities at Lake Johnston and Ravensthorpe.
The parties will also assess the viability of utilising Poseidon’s 1.5 million tonnes per annum Lake Johnston concentrator to process lithium ores and produce a saleable lithium concentrate and downstream lithium chemical production.
The Lake Johnston operations were placed onto care and maintenance by Norilsk Nickel in 2013.
Lithium Australia said the tenements, plant and equipment remain in good standing.
“Longer term, this strategy may result in both parties capitalising on the value-add that can be achieved by processing third party ore through to lithium chemicals and cathode materials by applying SiLeach and VSPC technologies,” Lithium Australia managing director Adrian Griffin said in the company’s announcement to the Australian Securities Exchange.
“LIT has great confidence in the resource potential of the Lake Johnston area, and indeed WA’s broader Dundas region.
“We are striving towards reduced exploration risk, access to ore concentration facilities and access to third-party ore sources to feed a lithium chemical plant based on our 100 per cent-owned SiLeach process and downstream into a VSPC-based cathode manufacturing facility.
“Together with Poseidon Nickel, we hope to take a very cost effective first step into the lithium ion battery manufacturing chain.”