Poseidon Nickel has received a $180,000 WA state government grant towards exploration for more nickel at Lake Johnston and has received approaches from third parties very interested in the lithium potential at Lake Johnston.

Poseidon Nickel (ASX:POS) advised today that it was successful in its application for a highly sought after Western Australian government Exploration Incentive Scheme (EIS) grant for a proposed nickel drilling program at Lake Johnston, 190km southwest of Kalgoorlie.

Poseidon is planning to drill 15,000m early next year to test the highly prospective and underexplored Western Ultramafic Unit for new nickel sulphides.

The basal contact of the Western Ultramafic is considered a high priority target for potential economic nickel sulphide mineralisation.

Although sparsely drilled with a distinct lack of effective drilling in the near-surface environment, historical nickel sulphide intersections drilled by previous explorers throughout the belt prove the fertility of the unit and have had little follow-up, Poseidon noted.

“Historically, the nickel exploration mindset at Lake Johnson was heavily focused on the Central Ultramafic Unit as it hosts both the Maggie Hays and Emily Ann nickel mines,” managing director Peter Harold said.

The Emily Ann and Maggie Hays operations mined 11.5 million tonnes of ore to produce over 100,000 tonnes of nickel between 2001 and 2013.

The Maggie Hays mine has a current resource of 3.5 million tonnes at 1.5% nickel for 52,000 tonnes of contained nickel. There is also an existing 1.5 million tonne per annum process plant on care and maintenance at the site.

“The Western Ultramafic unit prospectivity is underpinned with promising reconnaissance nickel drill intersections along its approximately 18km of strike and remains underexplored,” Harold said.

“Planning for the initial program is well advanced and we anticipate commencing the program in early 2023.”

The EIS grant will co-fund 50% of drilling and mobilisation costs up to a maximum of $180,000.

Poseidon is moving closer to the restart of its flagship Black Swan project, also in Western Australia, with a bankable feasibility study in the advanced stages of completion.

The company recently reported a breakthrough improvement in concentrate quality and saleability by utilising the existing Silver Swan ball mill to add a rougher concentrate regrind step in the processing circuit.

Poseidon also revealed that it was reviewing the lithium opportunities at Lake Johnston after “approaches by third parties”.

It’s probably not surprising given that lithium demand is surging as the world goes electric, and there aren’t enough mines in the pipeline to keep up with this rapid growth.

Wood Mackenzie sees a five-fold increase in lithium-ion battery capacity by 2030.

“The electric vehicle (EV) market accounts for almost 80% of lithium-ion battery demand,” consultant Jiayue Zheng said.

“High oil prices are supporting more markets to roll out zero-emission transportation policies, causing demand for lithium-ion battery to skyrocket and exceed 3,000 GWh by 2030.”

Poseidon previously confirmed the presence of lithium, with rock sampling of pegmatites identifying mineralisation towards the northeast of the Lake Johnston tenement package.

“We are also assessing the lithium potential on our tenements following a number of approaches by third parties and a review of the previous lithium exploration activities carried out by Poseidon,” Harold said.

The company said the previous work provided a good foundation into the understanding of the fractionation of pegmatites in an area previously identified, which supported ongoing targeting activities.

 

 

 

This article was developed in collaboration with Poseidon Nickel, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.