Poseidon Nickel (ASX: POS) will kick-off a drilling campaign mid next month at its 100%-owned Medusa Lithium Project, near the company’s Lake Johnston operations in Western Australia.
The reverse circulation drilling contract was awarded to Core Drilling Service, which will carry out 4,000m of planned exploration drilling across the project, where previous rock chip sampling returned up to 3.85% lithium.
“The Lake Johnston Medusa lithium project lies in a highly prospective area with several ASX-listed companies exploring the belt for lithium,” Poseidon Nickel chief operating officer Michael Rodriguez said.
“This is a key milestone for the company following significant work completed to date, including the identification and mapping of outcropping pegmatite, initial rock chip sampling, surface geochemistry, definition of high value lithium exploration targets, aerial radiometric and secured regulatory approvals to prepare drill lines for the exploration drilling program,” Mr Rodriguez added.
Poseidon Nickel owns a portfolio of tenements in the region which have been deemed prospective for lithium pegmatites.
According to the company, several explorers in the region have made spodumene discoveries including Kidman Resources (ASX: KDR) which uncovered the Mt Holland project about 70km west of Lake Johnston.
Lake Johnston operations
Medusa is only 6km from Poseidon Nickel’s 100%-owned 1.5 million tonne per annum Lake Johnston plant which produced a 6% spodumene concentrate via processing trials of lithium pegmatites obtained from its tenements.
Additionally, Poseidon Nickel has also managed to develop a 99% pure lithium carbonate from the concentrate.
To further its investigations, Poseidon Nickel plans to move to a plant trial at Lake Johnson and is in preliminary discussions with potential offtake parties. The company is also carrying out ongoing test work on the ore to get a better understanding of its quality and composition.
As part of its investigations, Poseidon Nickel is researching co-processing of pegmatite and nickel ores at Lake Johnston and will progress its patent applications.
However, any future offtake contracts will depend on establishing a JORC-compliant resource at the project.
Poseidon Nickel claims the Lake Johnston plant and associated infrastructure afford it an advantage in “potential speed to market” and turning the place into a “central lithium processing hub”.
In addition to its lithium tenements, Poseidon Nickel has 400,000 tonnes in nickel resources across three prospective provinces in Western Australia.
The company’s flagship project is the Silver Swan nickel mine which at 9% nickel is one of the highest-grade nickel mines in the world.
Poseidon Nickel is targeting the booming electric vehicle, sustainable energy and consumer electronic markets which all require the lithium-ion battery as the power source.
Many of these batteries contain up to 80% in the cathode.
According to Mr Rodriguez, Poseidon Nickel is waiting for the nickel price to hit US$6 per pound and stay there before dusting off Silver Swan and recommissioning the mine.
The nickel price is currently sitting at about US$5/lb after climbing off its June 2017 low of just under US$4/lb.
Speaking with Small Caps back in October, Mr Rodriguez said he believed the price would reach the US$6/lb mark within the next 12 months.