Poseidon Nickel Ltd (ASX:POS, OTC:PSDNF) has kicked off a soil and rock sampling program at the Lake Johnston Lithium Project after a four-month hiatus, following up rock chip samples collected from a broad, coherent lithium anomaly which has registered more than 100 parts per million (ppm) lithium oxide in previous sampling.
POS ceased exploration at the project while undergoing a potential sale process with Mineral Resources Limited, having developed a binding head of agreement (HoA) to divest the project, which was subsequently terminated and generated a $1 million non-refundable signing consideration for Poseidon.
Suite of low-cost exploration targets
“We are very excited about the suite of quality lithium and nickel greenfields targets generated from recently completed low-cost exploration programs at both the Lake Johnston and Windarra Projects,” Poseidon Nickel CEO Brendan Shalders said.
“Based on the success of these programs, progressing our greenfields exploration portfolio will continue as one of the key strategic pillars for the company moving forward.
“At Lake Johnston specifically, the company has recently defined multiple broad anomalous lithium values over a strike length of 3 kilometres, similar to levels reported by other exploration companies exploring for lithium bearing pegmatites in the region.
“With the recommencement of field activities, rock chip samples have been taken from numerous newly identified outcropping pegmatites in the southern Lake Johnston area.”
Exploration to continue on farm-in tenements
“In addition, during late 2023 the company entered into an earn-in agreement with Mantis Resources over tenements adjacent to the company’s which host outcropping lithium bearing pegmatites returning high grades from 2.80% up to 3.85% lithium oxide,” Shalders continued.
“For nickel, our October 2023 shallow reconnaissance drilling program at the Maggie Hays West prospect confirmed a highly promising strong, 1-kilometre-wide, coherent nickel-copper-platinum group element regolith anomaly – a strong indicator of weathered nickel sulphides directly below.
“As generative programs continue at Lake Johnston, we look forward to keeping the market informed as results come to hand.
“Any regional exploration success for lithium or nickel at/or near the Lake Johnston plant has the potential for this infrastructure to be a processing centre.”
In addition to exploration on the core Lake Johnston tenure, POS will also conduct surface sampling programs on farm-in tenements jointly owned with Mantin Resources, which the company considers to be highly prospective.
The company also intends to conduct reverse circulation (RC) drilling at the Maggie Hays West prospect, following up a 1-kilometre-wide nickel anomaly previously identified there, with the best drill interval to-date registering 2.37% nickel, 624 ppm copper and 353 parts per billion (ppb) platinum and palladium.
Lake Johnston HoA terminated
“During early 2024 the company received inbound interest from a number of parties in the Lake Johnston project,” Shalders explained.
“Following the consideration of various offers received, the company entered into a Binding Heads of Agreement for Mineral Resources Limited (MRL) to acquire the project.
“Following this approach from MRL the company deferred exploration activities at Lake Johnston to focus on progressing the sales process.
“It was disappointing that nearing completion of the sale and purchase agreement MRL requested a renegotiation of the Binding Heads of Agreement on terms unacceptable to the company and not in the best interest of Poseidon shareholders.
“MRL subsequently issued a notice of termination in respect of the Binding Heads of Agreement and the company has reserved all its rights against MRL.”
The POS board believes Lake Johnston has potential to provide future value accretion within the company’s tenure and surrounding tenements.