Poseidon Nickel commences lithium drilling at Lake Johnston

Poseidon Nickel ASX POS lithium drilling Medusa project
Drill rig operating at Poseidon Nickel's Medusa Lithium Project.

Twiggy Forrest backed Poseidon Nickel (ASX: POS) has expanded its foray into lithium with reverse circulation drilling starting at the company’s Medusa lithium project, part of the Lake Johnston operations in Western Australia.

A specialised rubber track-mounted RC rig is being used for the 4,000m drilling program. According to Poseidon, the rubber track rig minimises the environmental footprint and more easily navigates the project’s hilly and rocky terrain.

“The Lake Johnston Medusa lithium project lies in a highly prospective area with several ASX-listed companies already exploring for and developing lithium mines in the region,” Poseidon chief operating officer Michael Rodriguez said.

Medusa Lithium Project location map Poseidon Nickel
Location map of Poseidon Nickel’s Medusa Lithium Project.

Previous rock chip sampling along the project returned up to 3.85% lithium as well as tantalum.

Poseidon has carried out extensive work to define the drill targets for the current program.

The company will be testing mineralisation similar to Kidman Resources’ Mt Holland spodumene deposit which was found in mid-2016 and only 70km from Medusa.

Lake Johnston

Unlike other explorers in the region, Poseidon has the advantage of owning the 1.5 million tonne per annum Lake Johnston plant, which has produced a 6% spodumene concentrate during processing trials.

Poseidon has also developed a 99% high purity lithium carbonate from the spodumene concentrate.

The company is currently exploring the potential of co-processing pegmatite and nickel ores at Lake Johnston and is already in preliminary discussions with potential offtake parties.

“With the Lake Johnston concentrator and mill located only 6km from Medusa, Poseidon will be able to fast-track production should an economic lithium deposit be defined,” Mr Rodriguez said.

Poseidon has also previously claimed that should Medusa give up an economic deposit, Lake Johnston could be turned into a “central lithium processing hub”. This could still be the case by offering lithium explorers in the area the opportunity to toll treat their ore at Lake Johnston.

Nickel strategy

Despite its foray into lithium, Poseidon remains focused on its nickel assets with the company possessing 400,000 tonnes in nickel resources in WA.

The company has advised the market its board is reviewing its exploration budget to resume diamond core drilling at the Abi Rose project where high grade nickel was intersected in 2016 with an intersection returning 10.48m grading 3.2% nickel, with a 2.32m interval containing 7.62% nickel.

With Abi Rose in proximity to Lake Johnston, should a resource be developed, Abi Rose could be a commercially viable project with nearby Emily Ann mine infrastructure and the Lake Johnston plant for nickel concentration.

Lorna has more than 10 years' experience as a finance journalist and editor. She has written for numerous industry publications reporting on various sectors, including: resources, energy, construction, biotech, pharma, science and technology, agriculture, and chemicals. Specialising in resources, Lorna has also covered a myriad of small and large cap ASX and dual-listed stocks.