PERTH (miningweekly.com) – ASX-listed Kidman Resources has allowed its option agreement to lease the Lake Johnston plant for its Mt Holland lithium operation to lapse.
The original option agreement with Poseidon Resources to potentially adapt the Lake Johnston plant for the processing of Mt Holland ore, offered the company a potential fast-track route to producing a saleable spodumene concentrate, at a time when Kidman was still considering go-it-alone development options for the Western Australian project.
However, the company in July signed a $110-million joint venture agreement with lithium producer Sociedad Quimica y Minera de Chile SA (SQM) to develop and operate the Mt Holland lithium project.
“We are very pleased to have since attracted a globally significant operator in the battery chemical space in SQM, to partner with us on favourable terms for our shareholders in the construction of a large, openpit lithium mining and fit-for-purpose scaleable concentrating operation at Mt Holland.”
Poseidon chairperson Chris Indermaur on Thursday said that entering into the initial agreement with Kidman had been a strategic decision for Poseidon, made during a prolonged downturn in the nickel market, to secure future cash flow from the Lake Johnston operation.
“Poseidon plans to review its restart strategy of its nickel operations to take advantage of the recent improvements in the nickel market,” he added.
He also pointed out that during the Kidman option period, Poseidon had confirmed a saleable spodumene concentrate could be produced through the Lake Johnston operations, and had developed know-how and intellectual property on processing lithium through an existing nickel sulphide concentrator, resulting in the application of several co-processing patent applications lodged by Poseidon.
All of the information generated by Kidman and its contractors for the restart of Lake Johnston would be transferred to Poseidon.
The nickel miner told shareholders that it was planning to progress local exploration of known lithium-hosted pegmatite outcroppings on its own tenements and would consider agreements with third parties to establish Lake Johnston as an emerging, co-processing facility for lithium and nickel.
Following a successful exploration campaign, Poseidon would move to complete research and development and engineering to support trial mining and trial co-processing of ores at Lake Johnston.
The Lake Johnston project includes a 1.5-million-tonne-a-year processing plant that can process lithium-hosted pegmatite ores to produce a spodumene concentrate.